MIRA INFORM REPORT

Report No. :	501344
Report Date :	04.04.2018

IDENTIFICATION DETAILS

Name :	MAGNESITA REFRACTORIES COMPANY
Registered Office :	425 South Salem Church Road York PA 17408 York
Country :	United States
Date of Incorporation :	22.12.1941
Legal Form :	Business Corporation
Line of Business :	Subject provides dolomite-based refractory materials. The company offers various products based on doloma, magnesia, and alumina raw materials.
No. of Employees :	700

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23^rd January 2017)

MIRA’s Rating :

A

Credit Rating	Explanation	Rating Comments
A	Acceptable Risk	Business dealings permissible with moderate risk of default

Status :	Good
Payment Behaviour :	Regular
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

Country Name	Previous Rating (30.09.2017)	Current Rating (31.12.2017)
United States	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderately Low Risk	B1
Moderate Risk	B2
Moderately High Risk	C1
High Risk	C2
Very High Risk	D

UNITED STATES - ECONOMIC OVERVIEW

The US has the most technologically powerful economy in the world, with a per capita GDP of $57,300. US firms are at or near the forefront in technological advances, especially in computers, pharmaceuticals, and medical, aerospace, and military equipment; however, their advantage has narrowed since the end of World War II. Based on a comparison of GDP measured at purchasing power parity conversion rates, the US economy in 2014, having stood as the largest in the world for more than a century, slipped into second place behind China, which has more than tripled the US growth rate for each year of the past four decades.

In the US, 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, businesses face higher barriers to enter their rivals' home markets than foreign firms face entering US markets.

Long-term problems for the US 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.

The onrush of technology has been a driving factor in 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. But the globalization of trade, and especially the rise of low-wage producers such as China, has put additional downward pressure on wages and upward pressure on the return to capital. 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 and oil has a major impact on the overall health of the economy. 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. Because the US economy is energy-intensive, falling oil prices since 2013 have alleviated many of the problems the earlier increases had created.

The sub-prime mortgage crisis, falling home prices, investment bank failures, tight credit, and the global economic downturn pushed the US 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, the US Congress established a $700 billion Troubled Asset Relief Program (TARP) in October 2008. 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, 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. US revenues from taxes and other sources are lower, as a percentage of GDP, than those of most other countries.

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 2014, the direct costs of the wars totaled more than $1.5 trillion, according to US Government figures.

In March 2010, President OBAMA signed into law the Patient Protection and Affordable Care Act, a health insurance reform that was designed to extend coverage to an additional 32 million Americans by 2016, through private health insurance for the general population and Medicaid for the impoverished. Total spending on healthcare - 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 (Fed) 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 dropped below 6.5% or inflation rose above 2.5%. In late 2013, the Fed announced that it would begin scaling back long-term bond purchases to $75 billion per month in January 2014 and further reduce them as conditions warranted; the Fed ended the purchases during the summer of 2014. In 2014, the unemployment rate dropped to 6.2%, and continued to fall to 5.5% by mid-2015, the lowest rate of joblessness since before the global recession began; inflation stood at 1.7%, and public debt as a share of GDP continued to decline, following several years of increases. In December 2015, the Fed raised its target for the benchmark federal funds rate by 0.25%, the first increase since the recession began. With US GDP growth below 2%, the Fed opted to raise rates three times since then, and in mid-June 2017, the range for the target rate stood at 1% to 1.25%.

Source : CIA

STATUTORY INFORMATION

Legal Name:	MAGNESITA REFRACTORIES COMPANY
Trade Name:	Magnesita Refractories Company
ID:	25440
Date Created:	1941
Date Incorporated:	12/22/1941
Legal Address:	425 South Salem Church Road York PA 17408 York, USA
Operative Address:	425 South Salem Church Road York PA 17408-5955 United States
Telephone:	717-792-3611
Fax:	717-793-5560
Legal Form:	Business Corporation
Email:	NA
Registered in:	PENNSYLVANIA
Website:	www.magnesita.com
Contact:	Laurie Baker, Office Services Manager
Staff:	700
Industry:	Machinery Manufacturing Industry
Banks	Banco Bradesco BBI S.A. Credit Suisse Securities (USA) LLC
	The company does not disclose its banking details.
HISTORY
Magnesita Refractories Company was formerly known as LWB Refractories Company. The company is based in York, Pennsylvania. Brazilian competitor Magnesita Refratários acquired the company in October 2008 from US-based equity firm Rhône Capital for $938 million, creating one of the world's largest refractory manufacturers. The deal gave LWB an 11% stake in Magnesita
BAKER RESOURCE COMPANY Prior Name LWB REFRACTORIES COMPANY Prior Name THE J. E. BAKER COMPANY Prior Name
Magnesita Refractories Company Key Developments Magnesita Refractories Company Announces Expiration of Early Tender Period for 2020 Senior Notes Jul 31 15 Magnesita Refractories Company announced to its shareholders and the market in general the expiration of the early tender period for its previously announced cash tender offer for any and all of its outstanding 7.875% Senior Notes due 2020 (the "Notes"). In connection with the Tender Offer, Magnesita has solicited consents to proposed amendments to the indenture governing the Notes that will eliminate substantially all of the restrictive covenants, as well as various events of default and related provisions. The early tender period for the Tender Offer expired on 5:00 p.m., New York City time, on July 30, 2015, and has not been extended. Magnesita has been advised that an aggregate of USD 221,076,000 principal amount of Notes, representing 76.89% of the outstanding Notes, was tendered as of the Early Tender Date. The settlement date for the Notes tendered at or prior to the Early Tender Date is expected to occur no later than August 4, 2015 (the "Early Payment Date"), but may change at Magnesita's option and is subject to all conditions to the Tender Offer having been satisfied or waived by Magnesita. Holders that tendered Notes at or prior to the Early Tender Date and whose Notes are accepted for payment will be entitled to receive the sum of (i) USD 1,000 per USD 1,000 principal amount of Notes (which includes a consent payment of USD 50 per USD 1,000 principal amount of Notes) and (ii) accrued and unpaid interest. The Tender Offer is subject to the satisfaction of certain conditions including: (i) obtaining financing which, together with available cash, is sufficient to pay the total consideration in the Tender Offer and (ii) certain other customary conditions. The Tender Offer will expire at 11:59 p.m., New York City time, on August 13, 2015 (the "Expiration Time"), unless extended or earlier terminated. Holders of Notes who validly tender their Notes and consent to the Proposed Amendments after the Early Tender Date but before the Expiration Time, will receive USD 950 per USD 1,000 principal amount of Notes.
PRINCIPAL ACTIVITY
Magnesita Refractories Company provides dolomite-based refractory materials. The company offers various products based on doloma, magnesia, and alumina raw materials.
Products/Services description:	Its products include bricks, such as carbon-bonded doloma and magdol, fired doloma and magdol, fired magnesia, fired alumina, mag-carbon and tempered magnesia, and alumina mag-carbon; and mixes, including plastics, backfills, seals, gunning, mortars, covering powders, ceramic adhesives, fettling, and rams. The company’s products also include special shapes, such as well blocks, purging plug blocks, tapholes, slide gate plates, submerged entry nozzles, ladle nozzles, ladle bottoms and impact pads, tundish nozzles, and purging plugs.
Brands:	Magnesita
Sales are:	Wholesale
Clients:	MAGNESITA REFRACTORIES MEXICO, S.A. DE C.V. Mexico DAIDO KOGYO CO., LTD. Singapore Asf K De Mexicos De Rl De Cv Mexico
Suppliers:	MAGNESITA REFRACTORIES GMBH Germany
Operations area:	National and International
The company imports from	Germany, Brazil
The company exports to	Mexico, Singapore
The subject employs	700 employees
Payments:	Regular
LOCATION
Headquarters :	425 South Salem Church Road York PA 17408-5955 United States
Branches:	The comapny does not have branches
Related Companies:	Krosaki Magnesita Refractories LLC KMR, which Magnesita intends to liquidate, markets, sells and delivers flow control refractories and certain related services and products. KMR is 40% owned by Magnesita Refractories Company. Sister Companies: Magnesita Mineração S/A Brumado, Bahia, Brazil LWB Refractories Hagen GmbH Hilden, Germany Magnesita Refractories GmbH Hilden, Germany Vierte LWB Refractories Holding GmbH Hilden, Germany Rearden G Holdings Eins GmbH Hilden, Germany Sinterco SA Nameche, Belgium Magnesita Finance S.A. Luxembourg, Grand Duchy of Luxembourg
Competitors:	SHINAGAWA REFRACTORIES CO.,LTD. VESUVIUS PLC Andus Refractories B.V.
GROUP STRUCTURE AND SUBSIDIARY COMPANIES
Listed at the stock exchange:	NA
Capital:	NA
Shareholders:	Brazilian competitor Magnesita Refratários acquired the company in October 2008 from US-based equity firm Rhône Capital for $938 million, creating one of the world's largest refractory manufacturers. The deal gave LWB an 11% stake in Magnesita. LWB Refractories GmbH & Co. KG. Magnesita Refratarios S.A. Ultimate Group: RHI MAGNESITA N.V. Austria
Management:	Name KELLY L MYERS Title SECRETARY Address 425 S SALEM CHURCH RD YORK PA 17408-5955 Name KELLY L MYERS Title TREASURER Address 425 S SALEM CHURCH RD YORK PA 17408-5955 Name PAUL A DYDEK Title VICEPRESIDENT Address 425 S SALEM CHURCH RD YORK PA 17408-5955 Name RONALDO DOSSANTOSPEREIRA Title PRESIDENT Address 425 S SALEM CHURCH RD YORK PA 17408-5955
FINANCIAL INFORMATION
The company does not public its financial statements. The following information has been provided by our private sources:
USD 2016
Estimated Net Assets	79 800 000
Cash Flow	Normal
LEGAL FILINGS
CASES	Magnesita Refractories Company v. Tianjin New Century Refractories Co., Ltd. et al Filed: September 6, 2017 as 1:2017cv01587 Plaintiff: Magnesita Refractories Company Defendant: Tianjin New Century Refractories Co., Ltd., Yingkou New Century Refractories Ltd., New Century Refractory Solutions Inc. and others Cause Of Action: (a) Injunction against Misappropriation of Trade Secrets Court: Third Circuit › Pennsylvania › Pennsylvania Middle District Court Type: Other Statutes › Other Statutory Actions Magnesita Refractories Company v. Mishra Plaintiff: Magnesita Refractories Company Defendant: Surendra Mishra Case Number: 2:2016cv00524 Filed: December 19, 2016 Court: Indiana Northern District Court Office: Hammond Office County: XX US, Outside State Referring Judge: John E Martin Presiding Judge: Philip P Simon Nature of Suit: Other Contract Cause of Action: 18:1836 Jury Demanded By: Plaintiff
TRADEMARKS	MAGNESITA REFRACTORIES COMPANY Trademarks DOLO RAM REFRACTORY COMPOSITIONS FOR PATCHING, LINING OR REPAIRING HIGH TEMPERATURE APPARATUS Owned by: MAGNESITA REFRACTORIES COMPANY Serial Number: 72395114 DOLA B REFRACTORY FURNACE PATCHING AND REPAIR MATERIAL Owned by: MAGNESITA REFRACTORIES COMPANY Serial Number: 73046165 DKL Refractory Bricks Owned by: MAGNESITA REFRACTORIES COMPANY Serial Number: 73302380 JEBCO SHOGUN Refractory Furnace Patching and Repair Material Owned by: MAGNESITA REFRACTORIES COMPANY Serial Number: 73348702 TRIFOIL HEAT EXCHANGER rotary kilns Owned by: MAGNESITA REFRACTORIES COMPANY Serial Number: 76236917 MAGNESITA Refractory products not made primarily of metal, namely, refractory bricks, refractory mixes for patching, lining or repairing… Owned by: MAGNESITA REFRACTORIES COMPANY Serial Number: 77873477 MAGNESITA REFRACTORIES Refractory products, namely, refractory bricks, refractory mixes for patching, lining or repairing high temperature apparatus… Owned by: MAGNESITA REFRACTORIES COMPANY Serial Number: 77875337 MAGNESITA REFRATARIOS Refractory products, namely, refractory bricks, refractory mixes for patching, lining or repairing high temperature apparatus… Owned by: MAGNESITA REFRACTORIES COMPANY Serial Number: 77875346 PYRO-GATE Machine parts in the nature of ceramic plated gates that control the flow of molten steel, for use with ladels in the manufacture… Owned by: MAGNESITA REFRACTORIES COMPANY Serial Number: 78661701
PATENTS	Patents by Assignee Magnesita Refractories Company Rotary kiln lining and method Patent number: 8967998 Type: Grant Filed: May 5, 2011 Date of Patent: March 3, 2015 Assignee: Magnesita Refractories Company Inventor: Joel R. Filius ROTARY KILN LINING AND METHOD Publication number: 20120282563 Type: Application Filed: May 5, 2011 Publication date: November 8, 2012 Applicant: Magnesita Refractories Company Inventor: Joel R. Filius
UCC FILED	2015123000601 12/28/2015 12/28/2020 Magnesita Refractories Company Initial 425 S. Salem Church Road York PA 17408 2016012800399 01/28/2016 01/28/2021 Magnesita Refractories Company Initial 425 South Salem Church Road York PA 17408 2016070500428 07/01/2016 07/01/2021 Magnesita Refractories Company Initial 425 South Salem Church Road York PA 17408 2016090100686 09/01/2016 09/01/2021 MAGNESITA REFRACTORIES COMPANY Initial 425 SOUTH SALEM CHURCH ROAD YORK PA 17408 2017011301375 01/10/2017 01/10/2022 Magnesita Refractories Company Initial 425 South Salem Church Road York PA 17408
SUMMARY
Magnesita Refractories Company is a large-sized organization in the non-clay refractories industry located in York, PA. It opened its doors in 1941 and now has an estimated $79.8 million in yearly estimated net assets and 700 employees. It is part of a large group headquartered in Brazil. The company is ACTIVE with no negative.
RISK INFORMATION
DEBTS	Long-term bonds In 2010, Magnesita issued USD 400 million in long-term debt securities with a final maturity in 2020. Interest is fixed and corresponds to 7.875% per annum, paid semi-annually. The bonds do not include financial covenants. In August 2015, Magnesita, through its US subsidiary Magnesita Refractories Company, repurchased an aggregate principal amount of USD 335.7 million of these long-term bonds at their nominal value. As of December 31, 2016, the total outstanding amount was USD 64.8 million.
PAYMENTS	Regular
CASH FLOW	Normal
STATUS	ACTIVE
INTERVIEW
NAME	Paul
POSITION	Human Resources
COMMENTS	He confirmed group, experience, website, officers, number of employees and activity.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	INR 65.02
UK Pound	1	INR 91.46
Euro	1	INR 80.09
US Dollar	1	INR 65.02

Note : Above are approximate rates obtained from sources believed to be correct

INFORMATION DETAILS

Analysis Done by :	PRI
Report Prepared by :	TRU

RATING EXPLANATIONS

Credit Rating	Explanation	Rating Comments
A++	Minimum Risk	Business dealings permissible with minimum risk of default
A+	Low Risk	Business dealings permissible with low risk of default
A	Acceptable Risk	Business dealings permissible with moderate risk of default
B	Medium Risk	Business dealings permissible on a regular monitoring basis
C	Medium High Risk	Business dealings permissible preferably on secured basis
D	High Risk	Business dealing not recommended or on secured terms only
NB	New Business	No recommendation can be done due to business in infancy stage
NT	No Trace	No recommendation can be done as the business is not traceable

NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.

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 are as follows:

· Financial condition covering various ratios

· Company background and operations size

· Promoters / Management background

· Payment record

· Litigation against the subject

· Industry scenario / competitor analysis

· Supplier / Customer / Banker review (wherever available)

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