Fitch Upgrades Interpool to 'BB'; Outlook Positive.

NEW YORK -- Fitch Ratings has upgraded the long-term and preferred debt ratings of Interpool Inc. (Interpool) and its subsidiary, Interpool Capital Trust (see full rating list below). Interpool's Rating Outlook remains Positive.

Approximately $470 million of unsecured debt and securities and $650 million of secured revolving credit facilities are covered by Fitch's actions.

The ratings reflect Interpool's strong market position within the container and chassis segments, solid profitability, moderate leverage, and improved liquidity.

Rating concerns center on Interpool's significant customer concentrations, the impact of high fuel prices on global trade, and the potential cost of repatriating accumulated earnings or equity from Interpool Limited, which is registered in Barbados for tax purposes. Also considered was the adverse impact of sustained economic or political instability throughout the Pacific Rim, particularly China.

With Interpool now current on all of its SEC-related filings and re-listed on the New York Stock exchange, Fitch believes that the company's operating results could improve over the intermediate term. The improvement in operating results should be driven by fleet utilization remaining high, and demand for containers and chassis, which is expected to remain strong due to major expansion of the world cellular container ship fleet through 2008 coupled with continued growth in global containerized traffic.

Over the intermediate term, management intends to strengthen Interpool's credit metrics with a goal of having the company's unsecured debt be rated investment grade. Consideration in raising Interpool's debt from current levels will be driven by the company's compliance with Sarbanes-Oxley section 404, strengthening financial performance, declining leverage, and continued unencumbering of the balance sheet.

Interpool's interim 2005 financial performance continues to reflect favorable overall market conditions in both the container and chassis segments. Due to higher global containerized traffic and expansion of shipping fleets via delivery of newer and larger ships that require the use of a larger number of chassis and containers, utilization of Interpool's container and chassis fleets at June 30, 2005 equaled 97% and 96%, and was 99% and 97%, respectively, at Dec. 31, 2004.

Interpool's reported net income for the first six months ended June 30, 2005 was $37 million, an increase of $6 million over the company's first half of 2004 net income of $31 million. Year-to-date 2005 net income includes non-cash income of $14 million stemming from a change in the fair value of warrants. Also, prior year net income reflected an insurance settlement of $5 million. Excluding the change in the fair value of the warrants, annualized return on average equity was a respectable 11.40%.

Overall credit quality also remained good. Accounts receivable over 60 days past due equaled $9.8 million at both Dec. 31, 2004 and June 30, 2005. Nonperforming accounts receivable totaled $12 million at June 30, 2005, compared to $13 million at Dec. 31, 2005. Write-offs for the six months ended June 30, 2005 equaled $0.9 million versus $0.8 million for the same period a year ago. Between the 2002 to 2004 period, annual net write-offs have averaged approximately 0.9% of annual revenues.

New and expanded funding and liquidity arrangements were completed during 2005 with various financial institutions. During the first half of 2005, Interpool received an additional $223 million in net financing commitments. As of June 30, 2005, approximately $424 million, excluding $72 million, under the Container Applications International, Inc. revolving credit facility was available for future use by Interpool.

Headquartered in Princeton, N.J., with roots dating to 1968, Interpool Inc. is the holding company for Interpool Limited (Limited), Interpool Container Funding, SRL, Trac Lease, Inc. (Trac Lease), and owns 50% of Container Applications International, Inc. (CAI). Interpool Limited and Interpool Container Funding, SRL, house the container business. Trac Lease houses most of the domestic chassis business. CAI is a short-term lessor and serves as an outlet for Interpool's off-lease containers that are not renewed for long-term lease. Interpool is publicly traded and listed on the New York Stock Exchange (symbol:IPX).

Fitch has upgraded the following ratings:

Interpool, Inc.

-- Long-term issuer to 'BB' from 'BB-';

-- Senior unsecured debt to 'BB' from 'B';

-- Senior secured credit facility to 'BB+' from 'BB-'.

Interpool Capital Trust

-- Preferred stock to 'B+' from 'CCC+'.

Fitch has also assigned the following ratings:

Interpool Limited

-- Senior secured credit facility 'BB+';

-- Long-term issuer 'BB'.

Interpool Container Funding, SRL

-- Senior secured credit facility 'BB+';

-- Long-term issuer 'BB'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.