Moody's affirms Hyundai Motor notes at Ba1

Moody's Investors Service said it affirmed the Ba1 rating of the senior guaranteed notes due 2008 to be issued by Hyundai Motor Manufacturing Alabama LLC and guaranteed by Hyundai Motor Co.

The outlook is positive.

Moody's said the rating reflects Hyundai Motor Co.'s established market position in Korea, its growing global presence - particularly in North America - continuing solid operating performance, improving debt coverage measures, and the positive earnings impact of its stronger model mix.

The rating further considers the foreign exchange risks associated with the company's high level of vehicle exports, the growing contingent liability related to its extended warranty program and Moody's concerns over the company's consumer finance business, which is conducted through subsidiaries.

At the same time, the issue of contingent liability can be double-edged in its implications in that its growth - as currently in the United States - is indicative of higher sales, the agency said.

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