Press Release: Magna International Inc. Aug 22, 2001

Press Release: Magna International Inc.
Aug 22, 2001
Confirms at A and R-1 (low)

David Schroeder, Kam Hon / (416) 593-5577 ext.232, ext.243 / e-mail:
dschroeder@dbrs.com

Rating		Trend		Rating Action		Debt Rated
"A"		Stable		Confirmed		Senior Debt
A (low)	Stable		Confirmed		Convertible Unsecured
Subordinated Debt
Pfd-2y		Stable		Confirmed		Unsecured Junior
Subordinated Debentures.
R-1 (low)	Stable		Confirmed		Commercial Paper

The above ratings for Magna International Inc. ("Magna" or the
"Company") are confirmed as indicated. Despite an expected slowdown in
North American and European auto production this year, Magna continues
to increase its average content per vehicle, which should allow it to
maintain sales and earnings near record 2000 levels. Since 1997, Magna
has increased its content per vehicle in North America to US$396 versus
$218 and to euro 165 versus 62 in Europe and it aims to continue
increasing these levels by 10%-15% annually. The auto manufacturers are
increasingly outsourcing to larger suppliers and Magna stands to benefit
from this trend. Magna has invested heavily in capital expenditures and
select acquisitions over the past several years, but strong cash flow
and several spinoffs have allowed it to maintain above average financial
strength with low net debt levels and strong coverage ratios. Intier
Automotive recently announced plans to file an IPO for Cdn$100 million
which will decrease Magna's ownership interest to 90%. Magna has
sizeable cash balances of $824 million and a conservative balance sheet
but remains acquisition oriented. Although the outlook for Magna remains
favorable, several underlying challenges will influence results
including; (1) The consolidation of auto manufacturers will only add to
the challenge of an already difficult pricing environment. (2) The
industry has enjoyed one of the strongest and longest cyclical upswings
in recent history but the outlook has turned negative. (3) Growth in
Europe will likely pose unique, new challenges. (4) Changes to the
corporate structure with the partial divestiture of several businesses
brings uncertainty. 
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shortly that will provide additional analytical detail on this rating
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