April 9, 2009

Paris -- April 8, 2009 -- The credit crisis, which entered its second phase in the fourth quarter of 2008, is worsening in all regions. After observing a decline in the average financial strength of companies in 22 countries in January of this year, Coface has now performed downgrades and negative watches for 47 countries. Only a few areas -- India, Brazil, China, the Middle East and North Africa -- are maintaining their previous risk levels.

The BRIC countries: hit but not sunk
Among the countries that are relatively resilient are 3 BRIC countries: India, Brazil and China.

India's A3 rating has remained unchanged since December 2004. The country continues to be driven by internal demand and has been little affected by the crisis in international trade. Indian companies are facing the most moderate slowdown of the BRIC countries (5% growth in 2009, which is 4 points below 2007 level.)

Brazil (A4 rating since December 2006) has a diversified economy. Here, corporate debt in foreign currencies has not been as detrimental as it has in Central Europe.

Coface is maintaining the negative watch placed on China (rated A3) in January, due to company vulnerability in a context of overcapacity, stiff competition, and reduced margins. The adoption of measures to stimulate the economy and positive signs in the first quarter (an increase in credit and a rise in manufacturing output) has lead Coface to maintain the January rating. Russia (downgraded to C) is hardest hit of these four countries. It will have to deal with a growth shock of 11 points, which is the highest of the major economies (from 8.1% in 2007 to -3% in 2009.) Russian companies have very substantial foreign currency debts and are therefore badly affected by the credit crunch. Coface is continuing to record payment defaults in Russia this year.

Middle East and North Africa: Resilience or delayed effects?
The countries of North Africa seem to be weathering the crisis relatively well. Tunisia and Morocco have diversified economies and banking systems with little exposure to toxic assets. So far, Coface has not observed any deterioration in company payment behavior. The oil-producing countries of North Africa and the Middle East entered the crisis from a position of enhanced financial strength (due to the oil boom of 2003-2008), from which the whole region has benefited. The area's ratings remain unchanged.

"The peak of the crisis should be reached in the first half of 2009," stated François David, Chairman of Coface. "Our main scenario still forecasts the end of the credit crisis in the second half of 2009. We anticipate a recovery in early 2010, albeit a sluggish one due to the long process of debt reduction by the private economic agents: individuals and companies."

Coface Country Ratings Country January 2009 April 2009
Western Europe
Germany A1 (downgrade) A2
Austria A1 A1 (downgrade)
Belgium A1 (downgrade) A2
Denmark A1 (downgrade) A2
Spain A2 (downgrade) A3 (downgrade)
Finland A1 A1 (downgrade)
France A1 (downgrade) A2
Greece A2 (downgrade) A3
Ireland A2 A3
Iceland A3 A4
Italy A2 (downgrade) A3
Luxembourg A1 A1 (downgrade)
Norway A1 A2
Netherlands A1 A1 (downgrade)
Portugal A2 (downgrade) A3
United-Kingdom A2 A3
Sweden A1 A1 (downgrade)
Switzerland A1 A1 (downgrade)

Emerging Europe
Bulgaria A4 (downgrade) B
Estonia A3 A4
Hungary A3 (downgrade) A4
Latvia A4 B
Lithuania A3 (downgrade) A4
Poland A3 A3 (downgrade)
Czech Republic A2 A2 (downgrade)
Romania A4 (downgrade) B
Russia B (downgrade) C
Slovenia A1 (downgrade) A2
Turkey B B (downgrade)
Ukraine C (downgrade) D

Coface Country Ratings Country January 2009 April 2009
Asia South Korea A2 A2 (downgrade)
Hong Kong A2 A2 (downgrade)
Japan A1 (downgrade) A2
Malaysia A2 A2 (downgrade)
Mongolia C D
Pakistan C (downgrade) D
Papua New Guinea B B (downgrade)
Sri Lanka B C
Singapore A1 (downgrade) A2
Taiwan A2 A2 (downgrade)
Thailand A3 A3 (downgrade)

Africa
Botswana A2 A3

Coface Country Ratings indicate the average level of risk presented by companies in their commercial transactions. The ratings do not relate to sovereign debt.

North America press contact: Sue Hinton, 212-389-6484 -- sue_hinton@coface.com

About Coface
Coface's mission is to facilitate global business-to-business trade by offering its 130,000 customers four business lines to fully or partly outsource trade relationship management and to finance and protect their receivables: credit insurance, factoring, ratings and business information and receivables management. Due to the worldwide local service delivered by 7,000 staff in 65 countries, over 45% of the world's 500 largest corporate groups are already customers of Coface. Coface is a subsidiary of Natixis whose share capital (Tier 1) was 13.4 billion euros at the end of December 2008. Learn more at www.coface.com

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