---

S&P Rates J.L. French Automotive $200 Million Senior Subordinated Notes B-

21 May 1999

S&P Rates J.L. French Automotive $200 Million Senior Subordinated Notes B-

    NEW YORK, May 20 -- Standard & Poor's today assigned its
single-'B'-minus rating to J.L. French Automotive Casting Inc.'s (JLF)
$200 million senior subordinated notes due 2009, to be issued under rule
144A with registration rights.
    Standard & Poor's also assigned its single 'B'-plus corporate creditrating
to the company.
    At the same time, Standard & Poor's assigned its single- 'B'-plus rating
to the company's bank credit facility.  After the debt issuance the company's
credit facility will consist of two term loans totaling $295 million, and an
un-drawn revolver of $75 million.  The $105 million term loan A will mature in
2005, and the $190 million term loan B will mature in 2006.
    The outlook is stable.
    Proceeds from the debt issue will be used to repay debt associated with
the April 1999 recapitalization.
    The ratings reflect the company's decent market position within the
automotive casting market, combined with a weak financial profile.
    JLF is a leading global independent automotive die caster with operations
in both North America and Europe.  The automotive die casting industry is
large about ($9 billion) and highly fragmented.
    The company has low cost, vertically integrated casting operations,
focused on high volume long production runs.  JLF supplies original equipment
manufacturers (OEMs) with large detailed castings including transmission
casings, timing chain housings, cam covers, and oil pans.  In addition to
casting products the company is able to provide its customers with additional
services such as assembly and design support.  The company should continue to
benefit from the continued growth in global outsourcing by OEMs, and continued
consolidation within the industry.
    The firm has expanded globally into Europe, through recent acquisitions,
and is faced with integration, rationalization and cultural issues.  An
additional risk is the company's concentrated customer base, as the majority
of the company's revenues come from Ford Motor Co. and General Motors Corp.,
both of which exert significant pricing pressure on the company. JLF is also
exposed to the cyclical nature of the auto market.
    The company has a high financial risk profile.  Pro forma for the debt
issuance, total debt to earnings, before interest, taxes, depreciation, and
amortization (EBITDA) is about 4.5 times (x), and EBITDA interest coverage
will be about 2.5x.  Given a positive near-term outlook, internal cash flow is
expected to be sufficient to meet the company's modest working capital needs,
and to help fund moderate capital expenditures.  However, debt usage will
remain high as modest free cash flow and additional borrowings are likely to
fund potential acquisitions.  Going forward, total debt to EBITDA is expected
to range between 4x to 5x, an appropriate level for the rating.
    The bank credit facility is rated single-'B'-plus the same as the
corporate credit rating.  The credit facility is secured by substantially all
of the company's domestic assets.  The company's cash flows were significantly
discounted to simulate a default scenario and capitalized at an EBITDA
multiple reflective of the market.  However under this downside scenario it is
not clear whether a distressed enterprise value would be sufficient to cover
the entire loan facility.

    OUTLOOK: STABLE
    The outlook reflects Standard & Poor's expectations that the company
will retain its decent market position within the auto casting market and
continue to pursue prudent acquisitions.  However, financial flexibility will
continue to be constrained as debt usage is expected to remain high limiting
improvement in credit measures, Standard & Poor's said. -- CreditWire