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DUFF & PHELPS AFFIRMS RJR NABISCO, INC.'S 'BBB' SENIOR DEBT RATING

 NEW YORK, March 2 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has affirmed its BBB' (Triple-B) rating for RJR Nabisco, Inc.'s senior debt, and BB+' (Double-B-Plus) rating for subordinated debt. All other RJR Group ratings are also affirmed. Approximately $11 billion of debt is affected.
 D&P's rating review follows RJR Nabisco's announcement that, subject to stockholders' approval, the company intends to raise approximately $1.5 billion of equity through an initial public offering of "letter stock" tied to the earnings of the Nabisco Foods Group. Following this transaction, existing RJR Nabisco stock will be converted into separate classes of stock for both the foods business (RN-Nabisco Group) and also the tobacco business (RN-Reynolds Group). The company expects to declare dividends on both series of stock commencing with the quarter ending June 30, 1993.
 RJR Nabisco Inc.'s creation of separate classes of common stock is not expected to affect the legal structure of RJR Nabisco, Inc. and its subsidiary companies, or the obligation of both the food and tobacco businesses to provide for debt service.
 Proceeds from the $1.5 billion Nabisco Group IPO will be used to reduce debt, including outstandings under RJR's revolving credit facility. This debt reduction will result in an annual pre-tax interest savings of about $120
million. However, the payment of dividends on both series of stock will add a sizeable burden going forward. Based on the proposed dividend rate, common dividends will total approximately $560 million in 1994 and $640 million in 1995 following the conversion of the PERCs preferred stock to common stock.
 Given the annualized amount of the proposed dividends, D&P has some concern about the long-term effect of this transaction on credit quality. At a time when tobacco and food operations are under significant economic and competitive pressures, debt reduction over a longer time horizon will now be at a much slower pace than previously expected. Future debt protection measures will therefore be somewhat more dependant on a stable business profile than on an improving balance sheet.
 -0- 3/2/93
 /CONTACT: Thomas P. Razukas or Scott J. O'Shea of D&P, 212-908-0200/


CO: RJR Nabisco, Inc. ST: IN: FOD SU: RTG

GK -- NY044 -- 1885 03/02/93 10:52 EST
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Date:Mar 2, 1993
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