S& Affirms Blue Circle Industries; OffWatch.

Business Editors

PARIS--(BUSINESS WIRE)--Feb. 3, 2000

Standard &Poor's today affirmed its 'A-2' short-term ratings on Blue Circle Industries PLC, the U.K.'s leading cement manufacturer, and removed them from CreditWatch, where they had been placed with positive implications

The CreditWatch placement reflected a possible upgrade if the ratings on Lafarge S.A., the world's second-largest cement manufacturer, were affirmed on completion of its contemplated bid for Blue Circle. France-based Lafarge announced the terms of its bid yesterday, which make it very unlikely that Standard &Poor's ratings on Lafarge will remain at current levels. The ratings on Blue Circle will therefore not be upgraded and have been affirmed. The long- and short-term ratings on Lafarge, Redland PLC, and Redland's related entities, are maintained on CreditWatch -- where they were placed with negative implications on Jan. 31, 2000 -- pending the outcome of the transaction--including more information about the necessary regulatory authorizations and possible related divestitures. (See list below for all ratings affected.)

The rating actions reflect Lafarge's announcement that it is launching a bid of about euro (Eur) 5.5 billion for Blue Circle. Forty percen -- about Eur2.2 billion -- is to be financed by new equity, provided that Eur0.4 billion of warrants are exercised, with the remainder -- about Eur3.3 billion -- being financed by additional debt (not including debt assumed). Despite possible disposals, Lafarge is unlikely to maintain a financial profile consistent with its current ratings if and when the acquisition is completed. While Lafarge's business profile would be significantly enhanced by the acquisition of Blue Circle, this would be unlikely to compensate for the initial deterioration in its financial profile, Standard &Poor's said. -- CreditWire

RATINGS AFFIRMED; OFF CREDITWATCH
Blue Circle Industries PLC
                                Ratings
  Short-term corporate credit rating    A-2
  Commercial paper program              A-2


RATINGS MAINTAINED ON CREDITWATCH NEGATIVE
                                Ratings
Lafarge S.A.
  Corporate credit ratings              A/A-1
  Senior unsecured debt                 A
  Commercial paper program              A-1


Redland PLC
  Corporate credit ratings              A/A-1
  Senior unsecured debt                 A


Redland Funding B.V.
  Senior unsecured debt /a              A


Redland Overseas Funding PLC
  Senior unsecured debt /a              A


Redland Sterling Funding PLC
  Senior unsecured debt /a              A


/a Guaranteed by Redland PLC