Sydney, June 04, 2012 -- Moody's has today affirmed the Baa1 senior unsecured rating and P-2 short term rating of Brambles Limited (Brambles) following the company's announcement that 1) it will not proceed with the previously planned sale of the Recall information management business, and 2) it will raise approximately A$448 million in an underwritten equity issue to reduce debt. Outlook on the rating remains stable.

RATINGS RATIONALE

"We had expected the sale of Recall to lead to the reduction of debt from a proportion of the proceeds. While the sale will now not proceed, the earnings generated from Recall, plus the proceeds from the equity raising, will strengthen Brambles' financial profile within its Baa1 rating", says Ian Lewis a Moody's Vice President and Senior Credit Officer.

Brambles has announced today that it will launch a fully underwritten 1-20 pro rata accelerated renounceable entitlement offer in order to raise gross proceeds of A$448 million. Proceeds of the entitlement offer will be applied to debt reduction.

The ratings are unlikely to be subject to positive rating pressure while Brambles' free cash flow (after capex and dividends) continues to be materially negative. As such it is unlikely that the company's credit profile will transition to a single-A rating in the medium term.

On the other hand the company's ratings could be subject to negative rating pressure should a material diminution in earnings or a major debt-funded acquisition cause its credit metrics to weaken. We would look for Debt/EBITDA rising and remaining above 2.75x and/or EBIT/Interest falling below 4.0-4.5x as indicators that the rating is under pressure. Failure to complete the equity raising - which we consider to be highly unlikely - could also pressure the rating.

Brambles Limited's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Brambles Limited 's core industry and believes Brambles Limited 's ratings are comparable to those of other issuers with similar credit risk.

Brambles Limited is a global leader in pallet and container pooling supply chain solutions through CHEP. Brambles also provides secure and effective information storage and destruction services through Recall. Brambles is listed on the Australian Stock Exchange. As at 30 June 2011, it had total revenue of US$ 4.67 billion and underlying profit of US$ 0.86 billion.

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Ian Lewis VP - Senior Credit Officer Corporate Finance Group Moody's Investors Service Pty. Ltd. Level 10 1 O'Connell Street Sydney NSW 2000 Australia JOURNALISTS: (612) 9270-8102 SUBSCRIBERS: (612) 9270-8100 Terry Fanous Managing Director Corporate Finance Group JOURNALISTS: (612) 9270-8102 SUBSCRIBERS: (612) 9270-8100 Releasing Office: Moody's Investors Service Pty. Ltd. Level 10 1 O'Connell Street Sydney NSW 2000 Australia JOURNALISTS: (612) 9270-8102 SUBSCRIBERS: (612) 9270-8100 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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