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ALEXANDER & ALEXANDER COMMERCIAL PAPER LOWERED TO 'F-2', STILL ON FITCHALERT -- FITCH FINANCIAL WIRE --

 NEW YORK, Feb. 5 /PRNewswire/ -- Alexander & Alexander Services Inc.'s commercial paper rating is lowered to "F-2" from "F-1" and remains on FitchAlert with negative implications. The company has no commercial paper outstanding.
 In December, the company announced that it will incur a reserving charge in the 1992 fiscal year, relating to discontinued operations that were sold under an indemnity in 1987. Following this announcement, Fitch placed Alexander & Alexander on FitchAlert negative due to the company's inability to quantify the amount of the charge. The downgrade is prompted by Fitch's anticipation of a sizable charge with significant impact on leverage ratios.
 The rating remains on alert because the amount of the charge is yet undetermined. Further rating action may be necessary depending on the size of the charge.
 The charge will not immediately affect cash. However, cash will be impacted over the long term as losses are paid. Alexander & Alexander has $25 million of debt rollovers due in 1993 under credit arrangements. Fitch believes the company's liquidity position continues to be adequate, and the existence of $200 million of committed bank lines should provide financial flexibility.
 Although the uncertainty surrounding the impact of this charge on Alexander & Alexander's balance sheet is significant, a mitigating factor is that the company's operating trends have been improving, and its strong market presence as the second largest insurance broker is a contributing factor to its growth prospects. The ability to maintain this operating momentum will be a key factor in rebuilding capital after the charge is taken.
 -0- 2/5/93
 /CONTACT: Lygia X. Campbell of Fitch, 212-908-0695/
 (AAL)


CO: Alexander & Alexander Services Inc. ST: New York IN: INS SU: RTG

TS -- NY050 -- 3659 02/05/93 16:00 EST
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Publication:PR Newswire
Date:Feb 5, 1993
Words:286
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