RATINGS RATIONALE

The European automotive industry has seen high single digit declines in new car registrations over the third quarter peaking with -10.8% in September 2012. Particularly impacted was Ascometal's French home market with -18%. Moody's now forecasts European light vehicle sales to contract by 8% for 2012 and a further 3% for 2013. As a result, and taking into account that the majority of Ascometal's revenues are generated from automotive end markets, Moody's expects Ascometal's second half operating performance to be visibly impacted although recognizing the company's proactive steps with its initiated restructuring program.

The negative outlook reflects Moody's expectation that difficult industry conditions will persist in Ascometal's end markets, mainly automotive, resulting in pressure on operating performance into 2013.

The rating could be downgraded should operating performance weaken further so that adjusted Debt/EBITDA reaches 8x, free cash flow turns negative or Ascometal's liquidity position deteriorates.

Although Moody's currently does not expect any upgrade given the negative outlook, positive pressure could occur if free cash flow turns sustainably positive and adjusted EBIT margins improve materially above 5%.

Moody's views Ascometal's liquidity as adequate. Reduced funds from operations should be offset by working capital release and reduced capital expenditures while liquidity remains supported by the undrawn EUR 60 million revolving facility that carries only one maintenance covenant, as well as some headroom under the company's EUR 80 million factoring facility.

Ascometal, based in Courbevoie, France, wholly owned by Captain BidCo SAS, is one of the largest producers of specialty engineered steels in Europe. During 2011, Ascometal shipped 806,000 metric tons of steel and generated EUR 969 million of sales. The company operates three integrated EAF-based steel plants, four rolling mills and two cold finishing centres, all located in France. Around 87% of revenues are generated within the EU, with the largest portion generated in France, followed by Germany and Italy.

The principal methodology used in rating Captain BidCo SAS was the Global Steel Industry Methodology published in October 2012. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

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Tobias Wagner Analyst Corporate Finance Group Moody'sInvestors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Chetan Modi MD - Corporate Finance Corporate Finance Group JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Releasing Office: Moody's Investors Service Ltd. One Canada SquareCanary WharfLondon E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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