Fitch: Desc off watch positive

Fitch Ratings said it removed the senior secured foreign currency and local currency ratings of Desc SA de CV, as well as the national scale rating, from Rating Watch Positive.

The B+ senior secured foreign currency and local currency ratings, the B senior unsecured foreign currency and local currency ratings and the BBB-(mex) unsecured national scale rating have been affirmed. The outlook is stable.

Fitch also assigned a senior secured foreign national scale rating of BBB+(mex) to Desc.

Fitch said the improvement in the company's leverage was partially offset during 2004 by strong cost pressures due to a significant raise in the price of raw materials. This impaired the recovery of profitability despite the recovery of revenues during the year.

In 2005, Fitch said challenging operating conditions in the automotive parts sector will persist with steel prices forecasted to remain high and pricing pressures from OEMs to continue.

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