Xinhua Finance Limited (TSE: 9399) Deems S&P Downgrade Unmerited

Xinhua Finance Limited (TSE: 9399) Deems S&P Downgrade Unmerited

September 17, 2007

    SHANGHAI, Sept. 17 /Xinhua-PRNewswire/ -- Xinhua
Finance Limited (TSE Mothers: 9399; OTC: XHFNY)
("XFL", or the "Company"), China's
premier financial information and media company, today
indicated its disagreement with the rationale behind the
ratings downgrade announced last Friday by Standard &
Poor's ("S&P").  S&P lowered XFL's
corporate credit rating to "B" from
"B+", while maintaining its stable outlook for
the Company.

    In its report, S&P lowered the rating "to
reflect its continued concern about the Company's evolving
corporate governance issues, stabilization of the senior
management team, and the potential business impact of the
negative media coverage of the company since May
2007."  Furthermore, S&P supports its rationale
with financial metrics that the Company believes have been
calculated in a manner that does not accurately reflect the
Company's operations.  The Company believes S&P's
downgrade is not merited and remains confident in its
creditworthiness. 

    The Company emphasizes that it is currently in full
compliance with, and in some cases exceeds, the corporate
governance requirements of the Tokyo Stock Exchange, and
its subsidiary Xinhua Finance Media ("XFMedia";
Nasdaq: XFML) is in full compliance with NASDAQ and
Sarbanes-Oxley requirements. 

    S&P also expressed concern over recent senior
management changes at the Company.  Since June 2007, there
have been two departures of senior management at the
Company, XFL CFO, Gordon Lau and XFL Investor Relations
Managing Director, Sun Jiong.  Neither of these management
changes has compromised the Company's earnings-generating
ability as suggested by S&P since these roles do not
have direct impact on earnings-generation.  Senior
management overseeing operations such as CEO and Founder,
Fredy Bush, COO, Daniel Connell, and President, Jae Lie,
have been with the Company for many years. 

    Moreover, the Company has had in place an effective
succession planning process for changes in senior
management.  Current XFL CFO David Wang worked alongside
Gordon Lau for more than six months before the departure to
ensure a smooth transition.  Current Investor Relations
Director Jennifer Chan Lyman has been at the Company for
more than three years, worked with Sun Jiong for over a
year and continues to manage the Company's global investor
relations program. 

    XFL CEO Ms. Fredy Bush said, "We understand the
ratings agencies are under enormous pressure at this time
given the sub prime debt situation. However, it does not
merit unduly punishing companies with subjective rather
than objective criteria, based on innuendo rather than
concrete examples.  The Company is in full compliance with
all relevant regulations, and the executive management team
is strong and producing better returns than the Company
forecasted going into this year, notwithstanding the
misleading and inaccurate news articles."  
 
    With regard to the financial metrics cited by S&P,
the Company believes that the calculations behind the 11.6x
of total debt to EBITDA ratio from July 1, 2006 to June 30,
2007 and the 1.1x EBITDA interest coverage ratio of for the
first six months of 2007 do not reflect the true financial
condition of the Company. 

    S&P provides their methods for calculating EBITDA
and total debt in their report.  For first half 2007
EBITDA, S&P excludes US$3.3 million in non-cash
Employee Stock Ownership Plan expenses, non-operating cash
income of US$2.7 million and US$4.2 million in interest
income.  These cash-related items reflect the ability of
the Company to service its long term liabilities. Including
the items, the Company's first half 2007 EBITDA would be
$18.7 million and trailing twelve month EBITDA would be
$30.8 million.  As clarified in their report, S&P's
total debt for the company includes finance leases of
$117.3 million arising from XFMedia's operating agreements
and license agreements.  Excluding these finance leases,
the Company's total debt would be $106.9 million rather
than $224.2 million. 

    Based on the above, ratio of total debt (including
finance leases) to EBITDA from July 1, 2006 to June 30,
2007 is 7.3x and ratio of total debt (excluding finance
leases) to EBITDA is 3.5x.  The EBITDA to interest coverage
ratio 2.4x for the first six months of 2007.  The Company
believes that these ratios better reflect its true
financial condition and debt-servicing capability. 

    Lastly, even using S&P's total debt figure of $224
million, the Company's net debt figure is at $28 million,
based on total debt of $224 million (which includes finance
leases), less consolidated cash on hand of $156 million and
less US$40 million in short-term note investments that
mature in late October 2007. 

    Ms. Bush added, "Our business remains strong.  We
continue to leverage the Company's unique position in China
to pursue growth opportunities and increase shareholder
value."

    About Xinhua Finance Limited 
 
    Xinhua Finance Limited ("XFL") is China's
premier financial information and media service provider
and is listed on the Mothers Board of the Tokyo Stock
Exchange (symbol: 9399) (OTC ADRs: XHFNY).  Bridging
China's financial markets and the world, Xinhua Finance's
proprietary content platform, comprising Indices, Ratings,
Financial News, and Investor Relations, serves financial
institutions, corporations and re-distributors worldwide. 
Through its subsidiary Xinhua Finance Media Limited
(Nasdaq: XFML), XFL leverages its content across multiple
distribution channels in China including television, radio,
newspaper, magazine and outdoor media.  Founded in November
1999, XFL is headquartered in Shanghai, with offices and
news bureaus spanning 11 countries worldwide.   

    For more information, please visit
http://www.xinhuafinance.com . 

    Safe Harbor Statement

    This announcement contains forward-looking statements.
These statements are made under the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform
Act of 1995.  These forward-looking statements can be
identified by terminology such as "will,"
"expects," "anticipates,"
"future," "intends," "plans,"
"believes," "estimates," ``confident''
and similar statements. Among other things, quotations from
management in this announcement contain forward-looking
statements.   Statements that are not historical facts,
including statements about XFMedia's beliefs and
expectations, are forward-looking statements. 
Forward-looking statements involve inherent risks and
uncertainties that could cause actual results to differ
materially from those contained in any forward-looking
statements. Potential risks and uncertainties are risks
outlined in XFMedia's filings with the U.S. Securities and
Exchange Commission, including its registration statement
on Form F-1.  All information provided in this press
release is as of the date hereof, and XFMedia undertakes no
duty to update such information, except as required under
applicable law.



    For more information, please contact: 

    Xinhua Finance
     Hong Kong/Shanghai
     Ms. Joy Tsang
     Tel:   [phone] or
[phone]    
     Email: [e-mail]

    Taylor Rafferty (IR Contact)
     Japan 
     Mr. James Hawrylak
     Tel:   [phone]
     Email: [e-mail]

    United States
     Mr. John Dudzinsky
     Tel:   [phone] 
     Email: [e-mail]