MIRA INFORM REPORT

Report Date :

13.09.2012

IDENTIFICATION DETAILS

Name :	J C GINDER LTD BVBA
Registered Office :	Hoveniersstraat 53 Bus 38 Antwerp 2018
Country :	Belgium
Financials (as on) :	31.05.2011
Date of Incorporation :	01.01.1968
Com. Reg. No.:	404958370
Legal Form :	Private Limited Company (BL/LX)
LINE OF BUSINESS :	WHOLESALE OF DIAMONDS AND OTHER PRECIOUS STONES
No. of Employees :	1

RATING & COMMENTS

MIRA’s Rating :

Ba

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 – March 31^st, 2012

Country Name	Previous Rating (31.12.2011)	Current Rating (31.03.2012)
Belgium	A1	A1

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

BELGIUM - ECONOMIC OVERVIEW

This modern, open, and private-enterprise-based economy has capitalized on its central geographic location, highly developed transport network, and diversified industrial and commercial base. Industry is concentrated mainly in the more heavily-populated region of Flanders in the north. With few natural resources, Belgium imports substantial quantities of raw materials and exports a large volume of manufactures, making its economy vulnerable to volatility in world markets. Roughly three-quarters of Belgium's trade is with other EU countries, and Belgium has benefited most from its proximity to Germany. In 2011 Belgian GDP grew by 2.0%, the unemployment rate decreased slightly to 7.7% from 8.3% the previous year, and the government reduced the budget deficit from a peak of 6% of GDP in 2009 to 4.2% in 2011. Despite the relative improvement in Belgium's budget deficit, public debt hovers near 100% of GDP, a factor that has contributed to investor perceptions that the country is increasingly vulnerable to spillover from the euro-zone crisis. Belgian banks were severely affected by the international financial crisis in 2008 with three major banks receiving capital injections from the government, and the nationalization of the Belgian arm of a Franco-Belgian bank. An ageing population and rising social expenditures are mid- to long-term challenges to public finances.

Source : CIA

Company name and address Top of Form

Business number	404958370	Company name	J C GINDER LTD BVBA
		Telephone number	032322181
Address	HOVENIERSSTRAAT 53 BUS 38 ANTWERP	Fax number	032329152
Post code	2018	Number of staff	1
Date of establishment	01/01/1968

Ultimate holding company

Company name	Company Number
J C Ginder Ltd BVBA	404958370

Accounts & ratios

Date of latest accounts	Turnover	Profit Before Tax	Net worth
31/05/2011	10,654,081	94,709	2,403,746
31/05/2010	12,270,313	454,557	2,342,693
31/05/2009	10,326,469	-13,371	2,023,095

Accounts & ratios

Date of latest accounts	Balance Total	Investments	Capital	Cash Flow	Number of Employees
31/05/2011	4,162,474	22,942	18,600	532,504	1
31/05/2010	5,976,348	22,842	18,600	737,642	1
31/05/2009	4,218,700	22,841	18,600	766,666	0

Trends

Profitability
Liquidity
Net worth

Payment expectations

Past payments		Payment expectation days	58.28
Industry average payment expectation days	199.50	Industry average day sales outstanding	122.41
Day sales outstanding	41.95

Court data summary

Bankruptcy details
Court action type	no
Protested bills
Bill amount	-
NSSO details
Date of summons	-

Business number	404958370	Company name	J C GINDER LTD BVBA
Fax number	032329152	Date founded	01/01/1968
Company status	active	Company type	Private Limited Company (BL/LX)
Currency	Euro (€)	Date of latest accounts	31/05/2011
Activity code	46761	liable for VAT	yes
Activity description	Wholesale of diamonds and other precious stones	VAT Number	BE.0404.958.370
Belgian Bullettin of Acts Publications	moniteur belge

Personnel limit NSSO

Code	-
Description	FROM 1 TO 4 EMPLOYEES

Joint Industrial Committee (JIC)

Export accounts to CSV file

comparison mode

average

median

Profit & loss

Annual accounts	31-05-2011	%	31-05-2010	%	31-05-2009	Industry average 2011	%
Weeks	52		52		52
Currency	EUR		EUR		EUR
Turnover	10,654,081	-13.17	12,270,313	18.82	10,326,469	63,270,692	-83.16
Total operating expenses	10,551,967	-10.25	11,757,263	14.93	10,229,586	62,331,514	-83.07
Operating result	102,114	-80.10	513,050	429	96,883	336,567	-69.66
Total financial income	34,506	1905	1,721	-97.93	83,131	182,894	-81.13
Total financial expenses	41,910	-30.40	60,213	-68.86	193,386	368,103	-88.61
Results on ordinary operations before taxation	94,709	-79.16	454,557	3399	-13,371	132,357	-28.44
Taxation	16,941	-87.44	134,912	8408	1,586	44,671	-62.08
Results on ordinary operations after taxation	77,768	-75.67	319,645	2137	-14,957	102,147	-23.87
Extraordinary items	0	0	-48	-100	11,175	9,165	-100
Other appropriations	0.00	-	0.00	-	0.00	-	-
Net result	77,768	-75.67	319,597	8450	-3,782	111,303	-30.13
other information
Dividends	16,714	-	-	-	-	144,611	-88.44
Director remuneration	-	-	-	-	-	141,123	-
Employee costs	44,432	4.50	42,519	-26.70	58,009	182,495	-75.65
Wages and salary	33,754	5.29	32,060	-34.15	48,682	154,573	-78.16
Employee pension costs	-	-	-	-	-	8,542	-
Social security contributions	7,767	-5.21	8,194	-29.59	11,638	38,635	-79.90
Other employee costs	2,911	28.47	2,266	98.07	-2,311	5,463	-46.71
Amortization and depreciation	36,150	0.18	36,086	-0.26	36,179	22,630	59.74

balance sheet

Annual accounts	31-05-2011	%	31-05-2010	%	31-05-2009	Industry average 2011	%
Weeks	52		52		52
Currency	EUR		EUR		EUR
Intangible fixed assets	0	-	0	-	0	2,422	-100
Tangible fixed assets	217,108	-13.45	250,854	-10.55	280,440	215,527	0.73
Land & building	189,416	-3.34	195,960	-3.23	202,503	391,291	-51.59
Plant & machinery	3,915	-72.03	13,996	-37.77	22,492	29,672	-86.81
Other tangible assets	23,777	-41.86	40,899	-26.23	55,444	32,743	-27.38
Financial fixed assets	22,942	0.44	22,842	0.01	22,841	376,894	-93.91
Total fixed assets	240,051	-12.29	273,697	-9.75	303,281	479,010	-49.89
Inventories	912,299	3.74	879,429	8.95	807,221	3,354,093	-72.80
Raw materials & consumables	-	-	-	-	-	3,184,382	-
Work in progress	0	-	0	-	0	3,155	-100
Finished goods	912,299	3.74	879,429	8.95	807,221	2,254,590	-59.54
Other stocks	0	-	0	-	0	500,672	-100
Trade debtors	1,224,623	-63.80	3,382,706	80.35	1,875,586	4,382,191	-72.05
Cash	532,504	-27.81	737,642	-3.79	766,666	316,207	68.40
other amounts receivable	1,213,192	75.62	690,793	596	99,115	482,103	151
Miscellaneous current assets	39,805	229	12,082	-96.71	366,831	49,532	-19.64
Total current assets	3,922,423	-31.22	5,702,651	45.65	3,915,419	8,019,252	-51.09
current liabilities
Trade creditors	1,684,754	-45.29	3,079,373	51.16	2,037,185	2,707,720	-37.78
Short term group loans	-	-	-	-	-	-	-
Other short term loans	17,995	-95.08	365,952	344	82,279	2,568,793	-99
Miscellaneous current liabilities	55,978	-67.14	170,335	918	16,727	-85.83	- -
Total current liabilities	1,758,728	-51.36	3,615,660	69.26	2,136,191	5,549,260	-68.31
Long term debts
Long term group loans	-	-	-	-	-	-	- -
Other long term loans	-	-	17,995	-69.71	59,414	-	- -
Other long term liabilities	0	-	0	-	0	323,303	-100
Total long term debts	0	-100	17,995	-69.71	59,414	1,016,862	-100
shareholders equity
Issued share capital	18,600	0	18,600	0	18,600	1,004,213	-98.15
Share premium account	-	-	-	-	-	185,123	-
Reserves	2,385,146	2.63	2,324,093	15.94	2,004,495	845,930	181
Revaluation reserve	-	-	-	-	-	797,719	-
Total shareholders equity	2,403,746	2.61	2,342,693	15.80	2,023,095	1,878,650	27.95
Working capital	2,163,696	3.68	2,086,991	17.30	1,779,228	2,469,992	-12.40
Net worth	2,403,746	2.61	2,342,693	15.80	2,023,095	1,876,229	28.12

ratio analysis

Annual accounts	31-05-2011	change(%)	31-05-2010	change(%)	31-05-2009	Industry average 2011	%
Trading performance
Profit Before Tax	0.89	-75.95	3.70	2846	-0.13	0,00	-
Return on capital employed	3.94	-79.54	19.26	3009	-0.64	-29,00	13.59
Return on total assets employed	2.28	-70.04	7.61	2378	-0.32	-28,00	8.14
Return on net assets employed	3.94	-79.69	19.40	2939	-0.66	-39,00	10.10
Sales / net working capital	4.92	-16.33	5.88	1.38	5.80	69,00	-99
Stock turnover ratio	8.56	19.39	7.17	-8.31	7.82	46,00	-81.39
Debtor days	41.95	-58.31	100.62	51.79	66.29	122,00	-65.61
Creditor days	58.28	-39.04	95.60	31.52	72.69	125,00	-53.38
short term stability
Current ratio	2.23	41.14	1.58	-13.66	1.83	5,00	-88.26
Liquidity ratio / acid ratio	1.71	28.57	1.33	-8.90	1.46	3,00	-43.00
Current debt ratio	0.73	-52.60	1.54	45.28	1.06	19,00	-96.16
Liquidity ratio reprocessed	-	-	-	-	-	-	-
long term stability
Gearing	0.75	-95.42	16.39	134	7	302,00	-99
Equity in percentage	57.75	47.32	39.20	-18.27	47.96	-1.321,00	4.37
Total debt ratio	0.73	-52.90	1.55	42.20	1.09	20,00	-96.35

Payment expectations

Payment expectation days	58.28
Day sales outstanding	41.95

Industry comparison

Activity code	46761
Activity description	Wholesale of diamonds and other precious stones
Industry average payment expectation days	199.50
Industry average day sales outstanding	122.41

Industry quartile analysis

Payment expectations
Company result	58.28
Lower	132.26
Median	80.60
Upper	42.62
Day sales outstanding
Company result	41.95
Lower	109.24
Median	57.64
Upper	24.45

Summary

Group - Number of Companies	1
Linkages - Number of Companies	0
Number of Countries	0

Group Structure

Click the company to view / order a report.

Company name	Number	Latest financials
- J C GINDER LTD BVBA	404958370	31-05-2011

Minority Shareholders

No minority shareholders found

Minority Interests

No minority interests found

NSSO details

Business number	404958370
Name of defendant	-
Legal form of defendant	-
Date of summons	-
Labour court	-

Bankruptcy details

There is no bankruptcy data against this company

court data

there is no data for this company

Current director details

Name	JOHN BERNARD O'CONNOR
Position	Principal Manager
Street	17 CHARLOTTALEI ANTWERPEN
Post code	2018
Country	Belgium
Name	RICHARD HENRY GINDER
Position	Principal Manager
Street	5 VAN HAVRELEI ANTWERPEN
Post code	2100
Country	Belgium

Former director details

Name	JOHN O CONNOR
Position	Principal Manager
Street
Post code
Country

DIAMOND INDUSTRY – INDIA

- From time immemorial, India is well known in the world as the birthplace for diamonds.  It is difficult to trace the origin of diamonds but history says that in the remote past, diamonds were mined only in India. Diamond production in India can be traced back to almost 8^th Century B.C.  India, in fact, remained undisputed leader till 18^th Century when Brazilian fields were discovered in 1725 followed by emergence of S. Africa, Russia and Australia.

- The achievement of the Indian diamond industry was possible only due to combination of the manufacturing skills of the Indian workforce and the untiring and unflagging efforts of the Indian diamantaires, supported by progressive Government policies.

- The area of study of family owned diamond businesses derives its importance from the huge conglomerate of family run organizations which operate in the diamond industry since many generations.

- Some of the basic traits of family run business enterprises include spirit of entrepreneurship, mutual trust lowers transaction costs, small, nimble and quick to react, information as a source of advantage and philanthropy.

- Family owned diamond businesses need to improve on many fronts including higher standard of corporate governance, long-term performance – focused strategies, modern management and technology.

- The diamond jewellery industry in India today may be more than Rs 60000 mil and is rated amongst the fastest growing  in the world. Indi ranks third in the world in domestic diamond consumption.

- Utmost caution is to be exercised while dealing with some medium and large diamond traders which are usually engaged in fictitious import – export, inter-company transactions, financially assisted by banks. In the process, several public sector banks lost several hundred million rupees. They mostly diverted borrowed money for diamond business into real estate and capital markets.

- Excerpts from Times of India dated 30^th October 2010 is as under –

DIAMOND SAGA – DIRTY DOZEN STUCK WITH 2K CR DEBT

This could be the biggest credibility crisis the Indian diamond industry has ever faced. Fifteen banks run the risk of losing Rs 2000 crore lent to a dozen diamond firms in Surat. Until about two months ago, they had not repaid  these dues. Bankers believe many diamantaires borrowed money during the economic downturn two years ago and diverted funds to businesses like real estate and capital markets. Many of themselves made money from these businesses but their diamond companies have gone sick and declared insolvency.

- Most of the money borrowed from the banks in the name of their diamond business has been diverted in real estate and the share market. The banks are not in a position to seize their properties because in many cases, these were purchased in the name of their relatives and friends.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.55.26
UK Pound	1	Rs.88.85
Euro	1	Rs.71.13

INFORMATION DETAILS

Report Prepared by :

PRL

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%)

MIRA INFORM REPORT

Report Date :

13.09.2012

IDENTIFICATION DETAILS

Name :	JACALYN E.S. BENNETT AND COMPANY
Registered Office :	45 Water Street, Newburyport, MA, Zip Code 01950
Country :	United States
Date of Incorporation :	22.12.1989
Com. Reg. No.:	043071284
Legal Form :	Corporation
Line of Business :	Wholesaler of Women’s, and Children Clothing, Mainly Lingerie and Undergarments
No. of Employees :	50 employees

RATING & COMMENTS

MIRA’s Rating :

Ba

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 – March 31^st, 2012

Country Name	Previous Rating (31.12.2011)	Current Rating (31.03.2012)
United States	A1	A1

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 & Contact Details

Verified
Company Name:	JACALYN E.S. BENNETT AND COMPANY
Address:	45 Water Street
City:	Newburyport
State/province:	MA
Zip/postal code:	01950
Country:	United States of America
Telephone:	+1 (978) 462 – 1966
Fax:	+1 (978) 463 - 2062

Credit Observation

Current Credit Observation: There is no Immediate Risk in doing Business with this company

Analysis

· Very Well Established

Positive Payment Trend

Vendors Report Good Dealing With Subject

Buying Volumes are Steady and High

No of Employees Suggests Low Risk

No Derogatory Items on Record

Company History / Operations

Capital Stock:	100% by Officers
Business Structure:	Corporation
How Listed: Business Started:	Private Company 1990
Management Control:	1990
Line of Business:	Wholesales of Women’s, and Children Clothing, Mainly Lingerie and Undergarments
Territory: Sales Terms: Premises: Branches:	International Net 30 Rents Premises

Company Registration & Status

Date Registered:	December 22 1989
Legal form:	Corporation
Registration no:	043071284
Jurisdiction	Massachusetts
Registry status:	Active

Company Management/Officers

No of Employees:	50
Name & Title:	Jacalyn E S Bennett, President
Name & Title:	Brenda Marchi, COO
Name & Title:	Tony Pezzano, V President
Name & Title:	Jeff Cooper, CFO

Legal Findings

Suits:	None
Court Judgements:	None
NSF Reported:	None
Liens / Collection:	None
Security Filings:	8UCC Filings exist for leased equipment and assets. These secured creditors would take precedence in the unlikely event of asset liquidation.

Trade Payment Experience

Date Reported August 2012 High Credit : 7500 Now Owing : Zero Terms : Net 30 Days Past Due 1-30 days – Zero Past Due 31-60 days – Zero Past Due 61-90 days – Zero Payments Made: As Agreed Date Reported August 2012 High Credit : 10000 Now Owing : Zero Terms : Net 30 Days Past Due 1-30 days – Zero Past Due 31-60 days – Zero Past Due 61-90 days – Zero Payments Made: As Agreed Date Reported July 2012 High Credit : 25000 Now Owing : Zero Terms : Net 30 Days Past Due 1-30 days – Zero Past Due 31-60 days – Zero Past Due 61-90 days – Zero Payments Made: As Agreed Date Reported July 2012 High Credit : 60000 Now Owing : Zero Terms : Net 30 Days Past Due 1-30 days – Zero Past Due 31-60 days – Zero Past Due 61-90 days – Zero Payments Made: As Agreed

Payment Behaviour:

Business Demonstrates Positive Payment Trend

Financial Information

FINANCIAL ACCOUNTS
Description
Required to file:	No
Source:
Comments	Private Companies are not required to Publish Financial Statements

Notes & Comments

INVESTIGATIVE NOTES
Sources:	Public Court Records Payment Exchange Data Bases Business Registries References & Vendors.

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+'.

On Monday, we will issue separate releases concerning affected ratings in the funds, government-related entities, financial institutions, insurance, public finance, and structured finance sectors.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.55.26
UK Pound	1	Rs.88.85
Euro	1	Rs.71.13

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%)

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