MIRA INFORM REPORT

Report Date :

08.11.2012

IDENTIFICATION DETAILS

Name :	PROTECTIVE INDUSTRIAL PRODUCTS, INC.

Registered Office :	26 Computer Drive East, Albany, NY 12205

Country :	United States

Date of Incorporation :	24.09.1984

Legal Form :	Corporation – Profit

Line of Business :	manufactures and supplies work gloves and personal protective equipment

No. of Employees :	110 employees

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory

Payment Behaviour :	No Complaints

Litigation :	Clear

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – June 30^th, 2012

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

United States

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

United States - ECONOMIC OVERVIEW

The US has the largest and most technologically powerful economy in the world, with a per capita GDP of $48,100. In this market-oriented economy, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace. US business firms enjoy greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, to lay off surplus workers, and to develop new products. At the same time, they face higher barriers to enter their rivals' home markets than foreign firms face entering US markets. US firms are at or near the forefront in technological advances, especially in computers and in medical, aerospace, and military equipment; their advantage has narrowed since the end of World War II. The onrush of technology largely explains the gradual development of a "two-tier labor market" in which those at the bottom lack the education and the professional/technical skills of those at the top and, more and more, fail to get comparable pay raises, health insurance coverage, and other benefits. Since 1975, practically all the gains in household income have gone to the top 20% of households. Since 1996, dividends and capital gains have grown faster than wages or any other category of after-tax income. Imported oil accounts for nearly 55% of US consumption. Oil prices doubled between 2001 and 2006, the year home prices peaked; higher gasoline prices ate into consumers' budgets and many individuals fell behind in their mortgage payments. Oil prices increased another 50% between 2006 and 2008. In 2008, soaring oil prices threatened inflation and caused a deterioration in the US merchandise trade deficit, which peaked at $840 billion. In 2009, with the global recession deepening, oil prices dropped 40% and the US trade deficit shrank, as US domestic demand declined, but in 2011 the trade deficit ramped back up to $803 billion, as oil prices climbed once more. The global economic downturn, the sub-prime mortgage crisis, investment bank failures, falling home prices, and tight credit pushed the United States into a recession by mid-2008. GDP contracted until the third quarter of 2009, making this the deepest and longest downturn since the Great Depression. To help stabilize financial markets, in October 2008 the US Congress established a $700 billion Troubled Asset Relief Program (TARP). The government used some of these funds to purchase equity in US banks and industrial corporations, much of which had been returned to the government by early 2011. In January 2009 the US Congress passed and President Barack OBAMA signed a bill providing an additional $787 billion fiscal stimulus to be used over 10 years - two-thirds on additional spending and one-third on tax cuts - to create jobs and to help the economy recover. In 2010 and 2011, the federal budget deficit reached nearly 9% of GDP; total government revenues from taxes and other sources are lower, as a percentage of GDP, than that of most other developed countries. The wars in Iraq and Afghanistan required major shifts in national resources from civilian to military purposes and contributed to the growth of the US budget deficit and public debt - through 2011, the direct costs of the wars totaled nearly $900 billion, according to US government figures. In March 2010, President OBAMA signed into law the Patient Protection and Affordable Care Act, a health insurance reform bill that will extend coverage to an additional 32 million American citizens by 2016, through private health insurance for the general population and Medicaid for the impoverished. Total spending on health care - public plus private - rose from 9.0% of GDP in 1980 to 17.9% in 2010. In July 2010, the president signed the DODD-FRANK Wall Street Reform and Consumer Protection Act, a law designed to promote financial stability by protecting consumers from financial abuses, ending taxpayer bailouts of financial firms, dealing with troubled banks that are "too big to fail," and improving accountability and transparency in the financial system - in particular, by requiring certain financial derivatives to be traded in markets that are subject to government regulation and oversight. Long-term problems include inadequate investment in deteriorating infrastructure, rapidly rising medical and pension costs of an aging population, sizable current account and budget deficits - including significant budget shortages for state governments - energy shortages, and stagnation of wages for lower-income families.

Source : CIA

Company name & address

Company name: PROTECTIVE INDUSTRIAL PRODUCTS, INC.

Address: 26 Computer Drive East, Albany, NY 12205 - USA

Telephone: +1 518-861-0042

Fax: +1 518-861-0144

Website: www.pipusa.com

Company summary

Corporate ID#: 945555

State: New York State

Judicial form: Corporation – Profit

Date incorporated: 09-24-1984

Stock: 200 shares common

Value: No par value

Name of manager: Joseph A. MILOT

ACTIVITIES & OPERATIONS

IST

Business:

Protective Industrial Products, Inc. manufactures and supplies work gloves and personal protective equipment.

The company’s products include hand and eye protection, critical environment, protective clothing, electrical safety, hand sanitizer, respiratory safety, head and hearing protection, warning beacons, ergonomics, knitted and cut-and-sewn sleeves, and apparel.

The company offers products in the areas of industrial safety, food service, fire and rescue, construction, consumer, and uniform and salon. It offers its products through industrial distributors in the United States and internationally; provides sales support through a network of independent agencies; and has operations in the United States, Mexico, Australia, China, and Panama.

The company was founded in 1984 and is headquartered in Albany, New York.

It has sales and distribution centers in Guilderland Center, New York; Memphis, Tennessee; and Rancho Cucamonga, California.

The company also has locations in Hong Kong, Hong Kong; Monterrey, Mexico; Panama, Republica de Panama; Padova, Italy; Valencia, Spain; Kallithea, Greece; Chaska, Minnesota; and Bluffton, Indiana.

Suppliers include:

JOHN WARD CEYLON (PVT) LTD.
Spur Road 7, Phase 2, ipz, Katunayake, Sri Lanka

EIN: 14-1659264

Staff: 110

Operations & branches:

At the headquarters, we find a factory, warehouse and office, owned.

SHAREHOLDERS & MANAGERS

Shareholders:

This is MILOT family owned and managed company.

Management:

Joseph A. MILOT is the President and CEO.

Mr. Milot served as Executive Vice President of Century Glove Inc

(a Subsidiary of Amadac Industries, Albany, NY) from 1982 to 1985.

He started subject in 1984. He worked for Amadac Industries, Albany, NY.

and lastly served as its Treasurer from 1977 to July 1982.

He worked at Liberty Mutual Insurance Co, Boston from 1976 to 1977.

He graduated from Franklin and Marshall College, Lancaster, PA from 1975

to 1976.

Robin Roberts, Senior Vice President of Sales & Marketing

Bridget Milot, Vice President of Finance & Administration

Joseph Milot III, Director of Manufacturing Operations

As far as we know, they are not involved in other local corporations.

FINANCIALS

In United States, privately held corporations are not required to publish any financials.

On a direct call, a financial assistant controlled the present report.

Sales declared for year 2011 is in the range of USD 22,800,000= with a net profit of USD 1,000,000=

Banks: M & T Bank

...

LEGAL FILINGS

Legal filings & complaints:

State: New York

Case number: 1:12-cv-01623-TJM-RFT

Plaintiff: Marigold Industrial USA, Inc. et al

Defendant: Protective Industrial Products, Inc.
Thomas J. McAvoy, presiding
Randolph F. Treece, referral
Date filed: 10/31/2012
Date of last filing: 10/31/2012

Cause: Breach of contract

Secured debts summary (UCC):

Debtor Names:

PROTECTIVE INDUSTRIAL PRODUCTS, INC.

NORTHEASTERN INDUSTRIAL PARK-BUILDING 4, GUILDERLAND CENTER, NY 12085, USA

Secured Party Names:

MANUFACTURERS AND TRADERS TRUST COMPANY

ONE FOUNTAIN PLAZA, 3RD FLOOR, BUFFALO, NY 14203, USA

File no.	File Date	Lapse Date	Filing Type
200711080872999	11/08/2007	11/08/2012	Financing Statement
201205160279009	05/16/2012	11/08/2017	Continuation

2.	Debtor Names:	PROTECTIVE INDUSTRIAL PRODUCTS, INC.	NORTHEAST INDUSTRIAL PARK BLDG 4, BAY 2, GUILDERLAND CENTER, NY 12085, USA
	Secured Party Names:	TCF EQUIPMENT FINANCE, INC.	11100 WAYZATA BLVD SUITE 801, MINNETONKA, MN 55305, USA
		JULES AND ASSOCIATES, INC.	515 S. FIGUEROA ST, SUITE 1950, LOS ANGELES, CA 90071, USA

File no.	File Date	Lapse Date	Filing Type
200903060131916	03/06/2009	03/06/2014	Financing Statement

3.	Debtor Names:	PROTECTIVE INDUSTRIAL PRODUCTS, INC.	NORTHEAST INDUSTRIAL PARK BLDG 4, BAY 2, GUILDERLAND CENTER, NY 12085, USA
	Secured Party Names:	WELLS FARGO EQUIPMENT FINANCE, INC.	733 MARQUETTE AVENUE, SUITE 700, MINNEAPOLIS, MN 55402, USA
		JULES AND ASSOCIATES, INC.	515 S. FIGUEROA ST, SUITE 1950, LOS ANGELES, CA 90071, USA

File no.	File Date	Lapse Date	Filing Type
200907030389177	07/03/2009	07/03/2014	Financing Statement

4.	Debtor Names:	PROTECTIVE INDUSTRIAL PRODUCTS, INC.	26 COMPUTER DRIVE EAST, ALBANY, NY 12205, USA
	Secured Party Names:	M2 LEASE FUNDS, LLC	175 N. PATRICK BOULEVARD, BROOKFIELD, WI 53045, USA
		AEL FINANCIAL, LLC	600 N. BUFFALO GROVE ROAD, BUFFALO GROVE, IL 60089, USA

File no.	File Date	Lapse Date	Filing Type
200910130584636	10/13/2009	10/13/2014	Financing Statement
201001255075251	01/25/2010	10/13/2014	Assignment

5.	Debtor Names:	PROTECTIVE INDUSTRIAL PRODUCTS, INC.	26 COMPUTER DRIVE EAST, ALBANY, NY 12205, USA
	Secured Party Names:	AEL FINANCIAL, LLC	600 N. BUFFALO GROVE ROAD, BUFFALO GROVE, IL 60089, USA
		M2 LEASE FUNDS, LLC	175 N. PATRICK BOULEVARD, BROOKFIELD, WI 53045, USA

File no.	File Date	Lapse Date	Filing Type
200911060638296	11/06/2009	11/06/2014	Financing Statement
201005035407311	05/03/2010	11/06/2014	Assignment

6.	Debtor Names:	PROTECTIVE INDUSTRIAL PRODUCTS, INC.	26 COMPUTER DRIVE EAST, ALBANY, NY 12205, USA
	Secured Party Names:	WELLS FARGO EQUIMENT FINANCE, INC.	733 MARQUETTE AVENUE, SUITE 700, MINNEAPOLIS, MN 55402, USA
		JULES AND ASSOCIATES, INC.	515 S. FIGUEROA ST, SUITE 1950, LOS ANGELES, CA 90071, USA

File no.	File Date	Lapse Date	Filing Type
201009130498950	09/13/2010	09/13/2015	Financing Statement

7.	Debtor Names:	PROTECTIVE INDUSTRIAL PRODUCTS, INC.	26 COMPUTER DRIVE EAST, ALBANY, NY 12205, USA
		MCHENRY MANUFACTURING, INC.	26 COMPUTER DRIVE EAST, ALBANY, NY 12205, USA
	Secured Party Names:	WELLS FARGO EQUIPMENT FINANCE, INC.	733 MARQUETTE AVENUE, SUITE #700, MINNEAPOLIS, MN 55402, USA
		JULES AND ASSOCIATES, INC.	515 S. FIGUEROA ST, SUITE 1950, LOS ANGELES, CA 90071, USA

File no.	File Date	Lapse Date	Filing Type
201107150381450	07/15/2011	07/15/2016	Financing Statement

8.	Debtor Names:	PROTECTIVE INDUSTRIAL PRODUCTS, INC.	26 COMPUTER DRIVE EAST, ALBANY, NY 12205, USA
	Secured Party Names:	FIRST NIAGARA LEASING, INC.	726 EXCHANGE STREET SUITE 900, BUFFALO, NY 14210, USA

File no.	File Date	Lapse Date	Filing Type
201107220397484	07/22/2011	07/22/2016	Financing Statement

9.	Debtor Names:	PROTECTIVE INDUSTRIAL PRODUCTS, INC.	26 COMPUTER DRIVE EAST, ALBANY, NY 12205, USA
	Secured Party Names:	FIRST NIAGARA LEASING, INC.	726 EXCHANGE ST. STE. 900, BUFFALO, NY 14210, USA

File no.	File Date	Lapse Date	Filing Type
201107280409166	07/28/2011	07/28/2016	Financing Statement

10.	Debtor Names:	PROTECTIVE INDUSTRIAL PRODUCTS, INC.	26 COMPUTER DRIVE EAST, ALBANY, NY 12205, USA
	Secured Party Names:	JULES AND ASSOCIATES, INC.	515 S. FIGUEROA ST., SUITE 1950, LOS ANGELES, CA 90071, USA
		WELLS FARGO EQUIPMENT FINANCE, INC.	733 MARQUETTE AVENUE, SUITE 700, MINNEAPOLIS, MN 55402, USA

File no.	File Date	Lapse Date	Filing Type
201109015959986	09/01/2011	09/01/2016	Financing Statement

11.	Debtor Names:	PROTECTIVE INDUSTRIAL PRODUCTS, INC.	26 COMPUTER DRIVE EAST, ALBANY, NY 12205, USA
	Secured Party Names:	FIRST NIAGARA LEASING, INC.	726 EXCHANGE ST. STE. 900, BUFFALO, NY 14210, USA

File no.	File Date	Lapse Date	Filing Type
201110030524951	10/03/2011	10/03/2016	Financing Statement

12.	Debtor Names:	PROTECTIVE INDUSTRIAL PRODUCTS, INC.	26 COMPUTER DRIVE EAST, ALBANY, NY 12205, USA
	Secured Party Names:	FIRST NIAGARA LEASING, INC.	726 EXCHANGE ST. STE. 900, BUFFALO, NY 14210, USA

File no.	File Date	Lapse Date	Filing Type
201203025252637	03/02/2012	03/02/2017	Financing Statement

COMPANY CREDIT HISTORY

Trade references:

Date reported: October 2012

High credit: USD 25,000

Now owing: 0

Past due: 0

Last purchase: September 2012

Line of business: Office supply

Paying status: 2 days terms

Date reported: October 2012

High credit: USD 250,000+

Now owing: 0

Past due: 0

Last purchase: September 2012

Line of business: Payroll

Paying status: As agreed

Date reported: October 2012

High credit: USD 1,800

Now owing: 0

Past due: 0

Last purchase: September 2012

Line of business: Telecommunications

Paying status: On terms

Domestic credit history:

Domestic credit history appears as follow:

Monthly Payment Trends - Recent Activity

Date	Balance	Current	Up to 30 DBT	31-60 DBT	61-90 DBT	>90 DBT
05/12	$86,800	84%	4%	1%	0%	11%
06/12	$104,000	85%	2%	3%	1%	9%
07/12	$88,900	92%	1%	0%	0%	7%
08/12	$87,800	94%	0%	0%	0%	6%
09/12	$211,400	98%	0%	0%	0%	2%
10/12	$260,800	97%	0%	0%	0%	3%

National Credit Bureaus gave a correct credit rating.

According to our credit analysts, during the last 6 months, 92% of trade experience indicates a regular payment.

Payments are made with an average of 3 days beyond terms.

International credit history:

Payments of imports are currently made with an average of 2 to 5 days beyond terms.

Other comments:

The Company maintains a regular business.

The bank confirmed a regular account.

The Company is in good standing.

This means that all local and federal taxes were paid on due date.

The risk is low.

Our opinion:

A business connection may be conducted.

Standard & Poor’s

United States of America Long-Term Rating Lowered To 'AA+' Due To Political Risks, Rising Debt Burden; Outlook Negative

Publication date: 05-Aug-2011 20:13:14 EST

· We have lowered our long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term rating.

· We have also removed both the short- and long-term ratings from CreditWatch negative.

· The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics.

· More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

· Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics any time soon.

· The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

TORONTO (Standard & Poor's) Aug. 5, 2011--Standard & Poor's Ratings Services said today that it lowered its long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA'. Standard & Poor's also said that the outlook on the long-term rating is negative. At the same time, Standard & Poor's affirmed its 'A-1+' short-term rating on the U.S. In addition, Standard & Poor's removed both ratings from CreditWatch, where they were placed on July 14, 2011, with negative implications.

The transfer and convertibility (T&C) assessment of the U.S.--our assessment of the likelihood of official interference in the ability of U.S.-based public- and private-sector issuers to secure foreign exchange for

debt service--remains 'AAA'.

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see "Sovereign Government Rating Methodology and Assumptions ," June 30, 2011, especially Paragraphs 36-41). Nevertheless, we view the U.S. federal government's other economic, external, and monetary credit attributes, which form the basis for the sovereign rating, as broadly unchanged.

We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government's debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years.

The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements,

the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a 'AAA' rating and with 'AAA' rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions," June 30, 2011, especially Paragraphs 36-41). In our view, the difficulty in framing a consensus on fiscal policy weakens the government's ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population's demographics and other age-related spending drivers closer at hand (see "Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now," June 21, 2011).

Standard & Poor's takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.'s finances on a sustainable footing.

The act calls for as much as $2.4 trillion of reductions in expenditure growth over the 10 years through 2021. These cuts will be implemented in two steps: the $917 billion agreed to initially, followed by an additional $1.5 trillion that the newly formed Congressional Joint Select Committee on Deficit Reduction is supposed to recommend by November 2011. The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.

The act further provides that if Congress does not enact the committee's recommendations, cuts of $1.2 trillion will be implemented over the same time period. The reductions would mainly affect outlays for civilian discretionary spending, defense, and Medicare. We understand that this fall-back mechanism is designed to encourage Congress to embrace a more balanced mix of expenditure savings, as the committee might recommend.

We note that in a letter to Congress on Aug. 1, 2011, the Congressional Budget Office (CBO) estimated total budgetary savings under the act to be at least $2.1 trillion over the next 10 years relative to its baseline assumptions. In updating our own fiscal projections, with certain modifications outlined below, we have relied on the CBO's latest "Alternate Fiscal Scenario" of June 2011, updated to include the CBO assumptions contained in its Aug. 1 letter to Congress. In general, the CBO's "Alternate Fiscal Scenario" assumes a continuation of recent Congressional action overriding existing law.

We view the act's measures as a step toward fiscal consolidation. However, this is within the framework of a legislative mechanism that leaves open the details of what is finally agreed to until the end of 2011, and Congress and the Administration could modify any agreement in the future. Even assuming that at least $2.1 trillion of the spending reductions the act envisages are implemented, we maintain our view that the U.S. net general government debt burden (all levels of government combined, excluding liquid financial assets) will likely continue to grow. Under our revised base case fiscal scenario--which we consider to be consistent with a 'AA+' long-term rating and a negative outlook--we now project that net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of sovereign indebtedness is high in relation to those of peer credits and, as noted, would continue to rise under the act's revised policy settings.

Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act. Key macroeconomic assumptions in the base case scenario include trend real GDP growth of 3% and consumer price inflation near 2% annually over the decade.

Our revised upside scenario--which, other things being equal, we view as consistent with the outlook on the 'AA+' long-term rating being revised to stable--retains these same macroeconomic assumptions. In addition, it incorporates $950 billion of new revenues on the assumption that the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating. In this scenario, we project that the net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021.

Our revised downside scenario--which, other things being equal, we view as being consistent with a possible further downgrade to a 'AA' long-term rating--features less-favorable macroeconomic assumptions, as outlined below and also assumes that the second round of spending cuts (at least $1.2 trillion) that the act calls for does not occur. This scenario also assumes somewhat higher nominal interest rates for U.S. Treasuries. We still believe that the role of the U.S. dollar as the key reserve currency confers a government funding advantage, one that could change only slowly over time, and that Fed policy might lean toward continued loose monetary policy at a time of fiscal tightening. Nonetheless, it is possible that interest rates could rise if investors re-price relative risks. As a result, our alternate scenario factors in a 50 basis point (bp)-75 bp rise in 10-year bond yields relative to the base and upside cases from 2013 onwards. In this scenario, we project the net public debt burden would rise from 74% of GDP in 2011 to 90% in 2015 and to 101% by 2021.

Our revised scenarios also take into account the significant negative revisions to historical GDP data that the Bureau of Economic Analysis announced on July 29. From our perspective, the effect of these revisions underscores two related points when evaluating the likely debt trajectory of the U.S. government. First, the revisions show that the recent recession was deeper than previously assumed, so the GDP this year is lower than previously thought in both nominal and real terms. Consequently, the debt burden is slightly higher. Second, the revised data highlight the sub-par path of the current economic recovery when compared with rebounds following previous post-war recessions. We believe the sluggish pace of the current economic recovery could be consistent with the experiences of countries that have had financial crises in which the slow process of debt deleveraging in the private sector leads to a persistent drag on demand. As a result, our downside case scenario assumes relatively modest real trend GDP growth of 2.5% and inflation of near 1.5% annually going forward.

When comparing the U.S. to sovereigns with 'AAA' long-term ratings that we view as relevant peers--Canada, France, Germany, and the U.K.--we also observe, based on our base case scenarios for each, that the trajectory of the U.S.'s net public debt is diverging from the others. Including the U.S., we estimate that these five sovereigns will have net general government debt to GDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%. By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%. However, in contrast with the U.S., we project that the net public debt burdens of these other sovereigns will begin to decline, either before or by 2015.

Standard & Poor's transfer T&C assessment of the U.S. remains 'AAA'. Our T&C assessment reflects our view of the likelihood of the sovereign restricting other public and private issuers' access to foreign exchange needed to meet debt service. Although in our view the credit standing of the U.S. government has deteriorated modestly, we see little indication that official interference of this kind is entering onto the policy agenda of either Congress or the Administration. Consequently, we continue to view this risk as being highly remote.

The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently assume could lead us to lower the long-term rating again. On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction--independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners--lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government's debt dynamics, the long-term rating could stabilize at 'AA+'.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.25
UK Pound	1	Rs.87.00
Euro	1	Rs.69.83

INFORMATION DETAILS

Report Prepared by :

MNL

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
----	NB	New Business	----

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.