NMHG Holding Co.

Leading market positions Good customer diversity Solid brand images and large distribution network Fair amount of maintenance and replacement parts sales Cyclical and volatile market demand Manufacture of engineered-commodity products Cost structure continuing to be a work in progress Somewhat aggressive financial profile Exposure to price swings of raw materials The speculative-grade ratings on Portland, Ore.-based NMHG Holding Co. reflect its aggressive financial profile, fair liquidity, and leading positions within cyclical and volatile markets. NMHG competes in the global forklift truck market, which is characterized as moderate in size, somewhat consolidated, and modestly capital intensive. Over the business cycle, the industry grows at GDP-like rates. Larger forklift manufacturers are also gaining market share from vendor consolidation, which is leading to

...ISSUER CREDIT RATING NMHG Holding Co. Corporate Credit Rating ##-/Negative/-- AFFIRMED RATINGS NMHG Holding Co. Sr unsecd debt Local currency B+ Sr secd debt Local currency ##- Business profile: Below average Financial policy: Aggressive Bank lines/Liquid assets: NMHG Holding Corp. has a $135 million senior secured bank line due May 2007 and about $97 million in cash and equivalents at Dec. 31, 2004. Collateralization: The bank facility is secured by essentially all of the company's assets and capital stock. The facility is rated the same as the corporate credit rating. Availability under the facility is based on a borrowing base, and it is secured by essentially all of assets and capital stock of NMHG's operations. Standard & Poor's Ratings Services severely discounted the company's cash flows to simulate a default scenario and capitalized them by an EBITDA multiple reflective of NMHG's peer group. Under this simulated downside case, collateral value provides a strong likelihood of substantial...

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