MIRA INFORM REPORT

Report Date :

02.09.2013

IDENTIFICATION DETAILS

Name :	WILLIAMS SONOMA RETAIL SERVICES
Registered Office :	3250 Van Ness Ave, San Francisco, CA 94109 1012
Country :	United States
Financials (as on) :	2012
Date of Incorporation :	25.01.1999
Legal Form :	Corporation
Line of Business :	Retail Service
No. of Employees :	Not Available

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, 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
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 $49,800. 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. Crude 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 climbed another 50% between 2006 and 2008, and bank foreclosures more than doubled in the same period. Besides dampening the housing market, soaring oil prices caused a drop in the value of the dollar and a deterioration in the US merchandise trade deficit, which peaked at $840 billion in 2008. The sub-prime mortgage crisis, falling home prices, investment bank failures, tight credit, and the global economic downturn 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. In 2012 the federal government reduced the growth of spending and the deficit shrank to 7.6% of GDP. Wars in Iraq and Afghanistan required major shifts in national resources from civilian to military purposes and contributed to the growth of the budget deficit and public debt. Through 2011, the direct costs of the wars totaled nearly $900 billion, according to US government figures. US revenues from taxes and other sources are lower, as a percentage of GDP, than those of most other countries. In March 2010, President OBAMA signed into law the Patient Protection and Affordable Care Act, a health insurance reform 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. In December 2012, the Federal Reserve Board announced plans to purchase $85 billion per month of mortgage-backed and Treasury securities in an effort to hold down long-term interest rates, and to keep short term rates near zero until unemployment drops to 6.5% from the December rate of 7.8%, or until inflation rises above 2.5%. Long-term problems include stagnation of wages for lower-income families, inadequate investment in deteriorating infrastructure, rapidly rising medical and pension costs of an aging population, energy shortages, and sizable current account and budget deficits - including significant budget shortages for state governments

Source : CIA

Company name

Company Name	WILLIAMS SONOMA RETAIL SERVICES
Other Legal Name	WILLIAMS-SONOMA RETAIL SERVICES, INC.
Address	3250 VAN NESS AVE, SAN FRANCISCO, CA 94109 1012
Address Type	Headquarters
Federal Tax-ID
Charter Number 02131540
Incorporation 1/25/1990 date
File Reported Date	2/13/1997
Website
Phone Number
Business Type	Corporation
Sic Description

Commentary

The business has been on file for over 16 years.

The business is part of a group.

The business does not currently have payment behavior trends.

The business has legal filings registered against it - 4 filings with a total value of $258,410.

The business has had legal filings registered against it in the last 12 months - 1 filing with a total value of $1,980.

Number of derogatory commercial public.

Number of current commercial accounts.

Number of recently active commercial accounts.

Number of commercial accounts continuously updated.

This Company	Number	Balance	All US Companies in Group	Number	Balance
Total Trades	0	$0	Total Trades	263	$10,056,700
Continuous Trades	0	$0	Continuous Trades	166	$9,668,600
Collections	0	$0	Collections	100	$7,870
Most recent single High Credit	$0		Most recent single High Credit	$10,391,600
Median Credit Amount	$0		Median Credit Amount	$855,100
Most common industry payment terms			Most common industry payment terms
Most common
industry payment Shows the payment terms most frequently applicable to companies in this industry
terms
Definition

Net 60 terms	Payment is expected in full 60 Days after the invoice date
Net 61 + terms	Payment is expected in full 61 + Days after the invoice date
Cash terms	Cash payment in full is expected on delivery or completion of the service.
Contract terms	Payment is expected based on terms that have been agreed to in a contract between the two parties
Revolving credit terms	An amount of credit is agreed that is automatically made available again each time it is paid back.
Varied terms	Terms can change depending on agreed criteria
Other terms	Any agreed terms that fall outside the usual agreed terms

Inquiries Trend

	3 Months	1 6 Months	9 Months
Enquiries	1	1	^1

Trade Payment Last updated 8/19/2013

This Company		Number	Balance	All US Companies in Group	Number	Balance
Total Trades		0	$0	Total Trades	263	$10,056,700
Continuous Trades		0	$0	Continuous Trades	166	$9,668,600
Collections		0	$0	Collections	100	$7,870
Most recent single High Credit		$0		Most recent single High Credit	$10,391,600
Median Credit Amount		$0		Median Credit Amount	$855,100
Most common industry payment terms				Most common industry payment terms
Most common
industry payment	Shows the payment terms most frequently applicable to companies in this industry
terms
	Definition
Net 30 terms	Payment is expected in full 30 Days after the invoice date
Net 60 terms	Payment is expected in full 60 Days after the invoice date
Net 61+ terms	Payment is expected in full 61 + Days after the invoice date
Cash terms	Cash payment in full is expected on delivery or completion of the service.
Contract terms	Payment is expected based on terms that have been agreed to in a contract between the two parties
Revolving credit terms	An amount of credit is agreed that is automatically made available again each time it is paid back.
Varied terms	Terms can change depending on agreed criteria

Trade Lines

Type	Number	DBT	Recent High Balance	Balance	Current	1-30	31-60	61-90	91+	Derogatory comments
Continuous	0	0	$0	$0	0%	0%	0%	0%	0%	0
New	0	0	$0	$0	0%	0%	0%	0%	0%	0
Combined Trade	0	0	$0	$0	0%	0%	0%	0%	0%	0
Aged	0		$0	$0	0%	0%	0%	0%	0%	0
Additional	0			$0
Leasing	0			$0
Supplemental	0			$0
Telecom	0			$0
Total Trades	0		$0	$0	0%	0%	0%	0%	0%	0

Each Tradeline represents the record of an individual payment perform

Continuous Trade Lines Shows to trade payment data lines that hav reported within the previous 36 months.

New Trade Line Shows the total number and sum of Continuous and N

Combined Trade Refers to the sum of New Trade and Continuous or R

Aged Trade Shows trade payment data lines with no activity in the last

Derogatory Comments Total number of trades where worst status is a

Other or Additional Trade Refers to trade that falls into one of the bel - Auto Rental

- Auto Leasing

- Bank Card

- Commercial Credit Card

- Credit Union

- Equipment Leasing

- Leasing

Total Trade Shows the total number and

Trade Lines – All US Companies in Group

Number of other US companies in Group - 12								% of Group Total Trades balance
Type	Number	Balance	Current	1-30	31-60	61-90	91+
Continuous	166	$9,668,600	85%	11%	3%	0%	1%
New	2	$38,100	100%	0%	0%	0%	0%
Combined Trade	168	$9,706,700	85%	11%	3%	0%	1%

Aged	77	$251,100	53%	45%	1%	0%	1%
Additional	18	$98,900	-	-	-	-	-
Total Trades	263	$10,056,700

Collection Trades

Total number of open and closed collection trades placed within the last 24 months	0
Total number of open collection trades	0
Total amount placed for open and closed collection trades	$0
Total amount collected for open and closed collection trades	$0
Total amount collected for open collection trades	$0
Maximum amount collected on any collection trade	$0
Total number of open or closed unpaid collection trades	0
Total number of open collections placed within 12 months of latest profile date	0
Total number of open collections placed within 6 months of latest profile date	0
Total number of open and closed collections placed within 6 months of latest profile date	0
Date of most recent collection trade	08/2013
Date of most recent open collection trade	08/2013
Collection data comes directly from collection agencies. We store and display all collection data for 6 years.
Open Collection tradelines show amounts that are still being actively collected
Closed collection tradelines show amounts which have been collected or abandoned.

Legal Filings Summary

		Current			Family
Bankruptcy		No			No
Tax Lien filings		4			31
Judgement filings		0			7
Sum		$258,410			$553,399
UCC filings		0			53
Cautionary UCC filings		0			23
	SIC code - 0 -
Number Of Companies			0
Number with Judgements			0	Value ($)		$0
Number with Tax Liens			0	Value ($)		$0
Cautionary UCC			0	Bankruptcies		0
Total UCC`s			0

Legal Filings information shows details of various legal filings, UCC details, tax liens, and judgements made against this company. They can provide a record of the company’s performance and an indication of whether many of its assets are subject to third party claims

Bankruptcy will be “Yes” if a bankruptcy has been filed against the business in the last 9 years and 9 months

Tax lien filings represent claims made on the property or assets of a business in respect of collection or non-payment of taxes

Judgement filings are other court decisions ordering a business to make specific payments to a plaintiff

The Sum shows the total dollar amount covered by all tax lien, judgement and bankruptcy filings

Uniform Commercial Code (UCC) Filings

UCC Filing Summary

Month	Year	Cautionary UCCs****	Total Filed		Released / Termination		Continuous	Amended / Assigned
Aug	2013	0	0		0		0	0
Jul	2013	0	0		0		0	0
Jun	2013	0	0		0		0	0
May	2013	0	0		0		0	0
Apr	2013	0	0		0		0	0
Mar	2013	0	0		0		0	0
Feb	2013	0	0		0		0	0
Jan	2013	0		0		0	0	0
Dec	2012	0		0		0	0	0
Nov	2012	0		0		0	0	0

** Cautionary UCC Filings include one or more of the following collateral:

Accounts, Accounts Receivables, Contract Rights, Hereafter Acquired Property, Inventory, Leases, Notes Receivable or Proceeds.

Tax Liens

Date Filed	Filing Type	Status	Amount	Filing	Description	Jurisdiction
				Number
4/26/2013	State Tax Lien	Filed	$1,980	B103P457228		HINDS COUNTY CIRCUIT, X, 0
	STATE OF MISSISSIPPI					JACKSON,MS
Tax Lien Industry Comparison Table
Industry Sector (SIC)0
Industry Description

	No. of Tax Liens
Company	null
Industry Average	null

Company Information
Business Type	Corporation
Years in File	16	Years in Business	Over 10 Years
Address Type	Street Address	Annual Sales Amount	-
Estimated Number of	-	Location Type	Headquarters
Employees
Primary SIC Code Industry
Classification
Primary SIC Code
Primary NAICS

Media Solutions

Click here to search for news stories including adverse risk terms on this company

Corporate Record

		Primary	Mailing	Doing	Display
				Business		Agent
		Address	Address		Address
				Address
Business Legal	WILLIAMS-
	SONOMA RETAIL
Name
	SERVICES, INC.
		WILLIAMS-			WILLIAMS	CORPORATION SERVICE
Federal-Tax-Id	-
		SONOMA			SONOMA	COMPANY WHICH WILL DO
SOS Charter	02131540	RETAIL			RETAIL	BUSINESS IN CALIFORNIA
		SERVICES, INC.			SERVICES	AS CSC - LAWYERS
Number
		3250 VAN NESS			3250 VAN NESS	INCORPORATING SERVICE
Status	Active	AVE,			AVE,	2710 GATEWAY OAKS DR
		SAN			SAN	STE 150N,
Incorporated State	CA
		FRANCISCO,			FRANCISCO,	SACRAMENTO,
Principal State	CA	CA,			CA,	CA,
		941091012			941091012	958330000
Foreign/Domestic	Domestic
Profit/Non-Profit	profit

Company Name WILLIAMS SONOMA RETAIL SERVICES
Same Company Name and Address	9
Same Address	21
Same Company Name and City	0
Same Company Name and Zip Code	0
Same Company Telephone	0
Same Company URL	0
Same Company Name and State	0
Same Company Name	0
Same Companies with same Name Internationally	0
Total Possible Matches	30

Domestic Possible Links
Company Name	Address	Tax-ID	Rating	DBT	Limit	Legal Count
WILLIAMS-SONOMA, INC	3250 VAN NESS AVE SAN	XXXXX3880	70	4	$7,050.0k	6 ($41,977)
	FRANCISCO CA 94109
WILLIAMS-SONOMA	3250 VAN NESS AVE SAN		14	75	$0	0 ($0)
CREATIVE SERVICES	FRANCISCO CA 94109
WILLIAMS SONOMA	3250 VAN NESS AVE SAN		3	5	$400	0 ($0)
ADVERTISING INC	FRANCISCO CA 94109
WILLIAM-SONOMA DTC,	502 E JOHN ST CARSON CITY		27	N/A	$600	2 ($14,912)
INC	NV 89706
WILLIAMS-SONOMA	3250 VAN NESS AVE SAN	XXXXX9896	52	8	$24.9k	13 ($88,069)
STORS, LLC	FRANCISCO CA 94109
WILLIAMS-SONOMA	3250 VAN NESS AVE SAN	XXXXX6920	28	N/A	$600	3 ($28,160)
DIRECT, INC	FRANCISCO CA 94109
WILIAMS SONOMA # 471	3250 VAN NESS AVE SAN		28	45	$600	0 ($0)
	FRANCISCO CA 94109
WILLIAM J MCMONIGLE	1902 VAN NESS AVE SAN		61	N/A	$7.2k	0 ($0)
REAL EST	FRANCISCO CA 94109
CHAN WILLIAM C DDS	219 CLEMENT ST SAN		95	0	$36.1k	0 ($0)
	FRANCISCO CA 94118
WILLIAMS-SONOMA, INC	3250 VAN NESS AVE SAN	XXXXX3880	70	4	$7,050.0k	6 ($41,977)
	FRANCISCO CA 94109

Company Name	Address	Tax-ID	Rating	DBT	Limit	Legal Count
WILLIAMS-SONOMA	3250 VAN NESS AVE SAN	XXXXX9896	52	8	$24.9k	13 ($88,069)
STORS, LLC	FRANCISCO CA 94109
POTTERY BARN	3250 VAN NESS AVE SAN	XXXXX6136	14	4	$27.2k	6 ($62,855)
	FRANCISCO CA 94109
GARDENERS S EDEN	3250 VAN NESS AVE SAN		44	N/A	$600	1 ($55,570)
	FRANCISCO CA 94109
CHAMBERS CATALOG	3250 VAN NESS AVE SAN		N/A	N/A	N/A	0 ($0)
CO, INC	FRANCISCO CA 94109
KITCHEN, THE	3250 VAN NESS AVE SAN		N/A	N/A	N/A	0 ($0)
	FRANCISCO CA 94109
ZZZZZZZZZSONOMA	3250 VAN NESS AVE SAN		79	N/A	$1.1k	0 ($0)
INC	FRANCISCO CA 94109
WILLIAMS-SONOMA	3250 VAN NESS AVE SAN	XXXXX6920	28	N/A	$600	3 ($28,160)
DIRECT, INC	FRANCISCO CA 94109
WS INV MGMT RETAIL -	3250 VAN NESS AVE SAN		17	N/A	$300	0 ($0)
BOOKS	FRANCISCO CA 94109
W S INC CLM SONOMA	3250 VAN NESS AVE SAN		20	0	$600	0 ($0)
RELAMP	FRANCISCO CA 94109
W S INC MAINTENANCE	3250 VAN NESS AVE SAN		N/A	2	N/A	0 ($0)
CLM	FRANCISCO CA 94109
PAULA GONG	3250 VAN NESS AVE SAN		24	N/A	$500	0 ($0)
	FRANCISCO CA 94109
WILLIAMS SONOMA	3250 VAN NESS AVE SAN		3	5	$400	0 ($0)
ADVERTISING INC	FRANCISCO CA 94109
WILLIAMS-SONOMA	3250 VAN NESS AVE SAN		14	75	$0	0 ($0)
CREATIVE SERVICES	FRANCISCO CA 94109
W S INC GREEN	3250 VAN NESS AVE SAN		16	11	$600	0 ($0)
LIGHTING PROJECT	FRANCISCO CA 94109
WILIAMS SONOMA # 471	3250 VAN NESS AVE SAN		28	45	$600	0 ($0)
	FRANCISCO CA 94109
1 2 Next >>

Company Name WILLIAMS SONOMA RETAIL SERVICES
Group Structure Statistics		Group Structure Summary
Linkages	1 companies	Holding Company	WILLIAMS-SONOMA, INC
Countries	In 1 countries
		Ultimate Holding Company	WILLIAMS-SONOMA, INC
Group Structure
Ultimate Holding Company

Subsidiaries

No Subsidiaries Found

WILLIAMS SONOMA (Ultimate Holding Company)
Financial Overview
	Interim	2/3/2013		1/29/2012		1/30/2011
Fiscal Year	-	2012		2011		2010
ISO Currency	USD	USD		USD		USD
Income Statement
	Interim	2/3/2013		1/29/2012		1/30/2011
	5/4/2013
Net Revenue/sales	887,808,000	4,042,870,000	9%	3,720,895,000	6%	3,504,158,000
EBITDA	100,392,000	543,616,000	6%	512,285,000	9%	468,044,000
EBIT	63,783,000	409,163,000	7%	381,732,000	18%	323,414,000
Net income	39,466,000	256,730,000	8%	236,931,000	18%	200,227,000
Ordinary Dividend	0	-88,452,000	-16%	-76,308,000	-22%	-62,574,000
Balance Sheet
	Interim	2/3/2013		1/29/2012		1/30/2011
	5/4/2013
Intangible assets	0	0	0%	0	0%	0
Fixed Assets	817,249,000	812,037,000	11%	734,672,000	1%	730,556,000
Long Term Investments	0	0	0%	0	0%	0
Stocks/Inventories	661,541,000	640,024,000	16%	553,461,000	8%	513,381,000
Cash	252,536,000	424,555,000	-16%	502,757,000	-20%	628,403,000
Current Liabilities	560,270,000	657,127,000	15%	571,799,000	-7%	611,716,000
Long Term Debt	3,753,000	3,664,000	-29%	5,129,000	-25%	6,796,000
Provisions	0	0	0%	0	0%	0
Minority Shareholdings	0	0	0%	0	0%	0
Total Shareholders Equity	1,282,218,000	1,309,138,000	4%	1,255,262,000	0%	1,258,863,000

	Key Ratios
		Interim			2/3/2013			1/29/2012		1/30/2011
		5/4/2013
Operating Margin (%)			7.21	10.14		-1%	10.26		11%		9.23
Return on Equity Capital			-	20.02		6%	18.85		16%		16.21
(%)
Net Profit Margin (%)			4.45	6.35		0%	6.37		12%		5.71
Current Ratio			2.12	2.00		-10%	2.23		1%		2.20
Debt to Capital			0.00	0.00		0%	0.00		0%		0.00

Commentary

The business has been on file for over 16 years.

The business is part of a group.

The business does not currently have payment behavior trends.

The business has legal filings registered against it – 4 filings with a total value of $258,410.

The business has had legal filings registered against it in the last 12 months – 1 filing with a total value of $1,980.

Number of derogatory commercial public.

Number of current commercial accounts.

Number of recently active commercial accounts.

Number of commercial accounts continuously updated.

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.66.57
UK Pound	1	Rs.103.34
Euro	1	Rs.88.16

INFORMATION DETAILS

Report Prepared by :

PDT

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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