HONG KONG (Standard&Poor's) July 23, 2003--Standard&Poor's Ratings Services said today that it had assigned its 'BBB' senior unsecured debt rating to Taiwan-based Hon Hai Precision Industry Co. Ltd.'s (Hon Hai) proposed US$400 million zero coupon convertible bond issue due 2008, with the potential for further upside. The issue carries a US$50 million greenshoe option. The proceeds will be used as working capital to purchase raw materials. The rating reflects the company's low cost competitiveness, strong mechanical engineering expertise, consistently solid operating performance, and satisfactory financial profile. These factors are mitigated by the company's high degree of customer concentration, exposure to rapid product cycles in volatile end markets, and ongoing pressure on prices in a highly competitive
