Fitch Rates Exide Technologies $250MM DIP Facility 'BBB+'.

Business Editors

NEW YORK--(BUSINESS WIRE)--Sept. 24, 2002

Fitch Ratings has assigned a 'BBB+' to Exide Technologies ('Exide' or 'the Company') $250 million Debtor-In-Possession (DIP) Facility consisting of $121 million Revolving Credit facility and a $129 million Term Loan facility. The DIP Facility expires the earlier of (i) February 15, 2004 or (ii) the effective date of a plan of reorganization entered by the Bankruptcy Court or (iii) the 30th day prior to the date upon which the revolving credit loans under the Pre-Petition Facilities become due (November 2003). The DIP Facility will benefit from security under Bankruptcy Code Section 364(c)(2) and Section 364(c)(3). The security afforded includes a perfected first priority lien on all unencumbered property of the Debtors and a perfected junior lien on all property of the Debtors that is subject to valid and perfected liens in existence at the time of the bankruptcy filing. Additionally, the DIP Facility will hold super-priority administrative claim status under the U.S. Bankruptcy Code, will benefit from perfected first priority senior consensual priming liens on all collateral that was securing the Company's obligations under the pre-petition credit agreement, and will have dominion over the cash via a lock box account.

A debtor-in-possession loan rating assigned by Fitch Ratings addresses both the probability of a company's successful reorganization and emergence from bankruptcy and the protection afforded to the DIP loan providers through the structure and collateral associated with the DIP Facility. This rating is solely for the DIP Facility for Exide and is not an indication of Exide's rating upon emergence from bankruptcy. Fitch Ratings will review and provide a new credit rating for Exide at that time.

In providing a rating for the DIP Facility, Fitch Ratings considered the Company's plan to rationalize battery manufacturing facilities and plastic plants, reduce headcount and streamline productivity through Lean Manufacturing, a process that aims to eliminate waste and improve customer relations, product design and factory management. The rating also reflects stronger credit protection measures as a result of the debt relief provided by the bankruptcy filing and throughout the reorganization process. Fitch Ratings expects considerable improvement in the credit protection measures by fiscal year end 2003 (March, 2003). Exide's EBITDA is expected to rebound due to completed restructuring initiatives that involve reducing the Company's cost structure. By year end 2003, EBITDAR/Cash Interest is forecasted to improve to 2.4x, Total Debt/EBITDAR to amount to 3.0x and DIP Debt/EBITDAR to be 0.6x. The rating is constrained by the execution risk associated with the labor intensive nature of the reorganization plan. The Company's aftermarket distribution network faces a competitive environment from larger and very well geographically diversified players.

In the event the Company does not emerge from bankruptcy and a liquidation of the assets is required, the structure and asset-based nature of the DIP Facility provides significant protection for the lenders. Advances under the DIP Facility for the Domestic Facilities are governed by a borrowing base consisting of conservative advances of eligible domestic accounts receivables, inventory, and fixed assets conservatively capped by a percentage of the orderly liquidation value of eligible equipment and certain real estate. The Euro Facility is subject to availability with conservative advances against eligible and accounts receivable and inventory. The borrowing base comfortably covers average projected outstanding under the facilities.

Exide, headquartered in Princeton NJ, is one of the largest producers of lead acid batteries in the world. The Company has grown through acquisitions, currently conducting operations in approximately 89 countries in North America, Europe, the Middle East, Australia, and Asia. The Company operates three business segments: Transportation, which produces automotive batteries, Network Power, which provides network batteries used for back-up power applications and telecommunications systems, and Motive Power, which manufactures batteries for forklift trucks and other electric vehicles. For fiscal year end March 31, 2002, the Company reported $2,424.6 million in revenues and $154.0 million in earnings before interest, taxes depreciation and amortization, restructuring and non-recurring charges ('EBITDAR').

Several debt funded acquisitions between 1997 and 2000 and a weak Network Power and telecommunication market in 2000 and 2001, led to a liquidity crunch and the Company filed for protection under the Bankruptcy Code in April of 2002. During 2001 the Company undertook several restructuring initiatives including closing the Burlington, Dallas and Dunmore plants, reducing the manufacturing workforce in Cwmbran, Wales, and Duisburg, Germany and reorganizing the European Transportation segment's sales and logistics workforce resulting in the elimination of 1100 employees. Additionally, Exide closed 27 distribution facilities principally in North America and shut down its automotive manufacturing operation in Maple, Ontario. The bankruptcy filing provides Exide with the time and flexibility to address and resolve several operational issues and to align their cost structure with the current demand in their markets. The ongoing restructuring initiatives and cost reduction should yield an additional $80.6 million to EBITDAR over fiscal 2003.