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S&P Places Nissan Motor Ratings on Watch Neg

21 May 1998

S&P Places Nissan Motor Ratings on Watch Neg

    TOKYO, May 21 -- Standard & Poor's today placed its triple-
'B'-minus long-term ratings and 'A-3' short-term ratings of Nissan Motor Co.
Ltd. and related entities on CreditWatch with negative implications (see list
below).
    The CreditWatch placement reflects uncertainty as to the costs and
ultimate benefits of Nissan's newly announced restructuring plan. The plan
calls for drastic changes in business and financial strategies, including the
consolidation of domestic sales channels and the company's product mix;
strengthening of the company's U.S. operations; reduction of fixed costs; and
significant debt reduction. However, Nissan will face considerable challenges
in pushing forward proposed reform measures, given the currently difficult
economic conditions in Japan, the potential for various restructuring losses
in the near term, and the plan's reliance on successful asset sales.
    Nissan's ratings were lowered to triple-'B'-minus on March 20, 1998,
reflecting the worsened prospects of an earnings recovery in light of lagging
performance in Japanese and U.S. markets and the company's sizable debt
burden. The proposed restructuring plan indicates that management recognizes
and intends to address these critical issues.
    Standard & Poor's will assess the key strategic, operating, and financial
aspects of the restructuring plan. If implemented successfully, the plan could
put Nissan on a sounder footing in coming years. The current ratings could be
affirmed if the problems to be addressed, the costs and risks of measures
needed to rectify these problems, and the likelihood of success of such
measures are consistent with Standard & Poor's existing view of Nissan's
credit quality. The ratings could likewise be lowered, if the actions Nissan
takes appear to entail greater difficulties and risks than those that were
factored into the recent rating downgrade, or if Nissan's actions seem
inadequate to deal effectively with the challenges at hand, Standard & Poor's
said. --CreditWire

    RATINGS PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONS

    Nissan Motor Co. Ltd.
    Corp credit rtg                       BBB-/Watch Neg/A-3
    Sr unsecd debt                        BBB-/Watch Neg
    Nissan Motor Acceptance Corp.
    Corp credit rtg                       BBB-/Watch Neg/--
    Nissan International Finance (Netherlands) B.V.
    Corp credit rtg                       BBB-/Watch Neg/A-3
    Euro CP prog (Sup: Nissan Motor Co. Ltd.)  A-3/Watch Neg
    Nissan Motor Corp. of  USA
    Corp credit rtg                       BBB-/Watch Neg/A-3
    Nissan Capital of America Inc.
    Corp credit rtg                       BBB-/Watch Neg/A-3
    CP (Sup: Nissan Motor Co. Ltd.;
     Gtd: Nissan Motor Corp. of USA)      A-3