S&P revised Tata Steel rating from ''BBB''; to ''BB'' with ''positive outlook''

11 July 2007

Standard & Poor''s today revised its corporate credit rating on Tata Steel Ltd. to ''BB'' from ''BBB'' earlier with a positive outlook.

The company has also been removed from from CreditWatch, where it was placed on 18 October, 2006, with negative implications after its announcement on acquiring Corus Group PLC (Corus, BB-/Stable/B).

At the same time, the ratings on Tata Steel''s senior unsecured bank loans of $750 million and $500 million have been lowered to ''BB'' from ''BBB.'' The rating downgrade reflects the impact of the leveraged acquisition financing on the risk profile of the consolidated entity.

"The rating on Tata Steel reflects the consolidated credit profile of the company and its subsidiaries, including Corus," said Standard & Poor''s credit analyst Anshukant Taneja.

Tata Steel intends to fund its $12.9 billion acquisition of Corus primarily through debt, which is legally structured as non-recourse to the parent company.

Notwithstanding this arrangement, Standard & Poor''s considers that the size and strategic
significance of Corus and its prominence in the future plans of Tata Steel create substantial economic incentive for Tata Steel to support Corus.