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DUFF & PHELPS ASSIGNS INITIAL RATINGS TO WHIRLPOOL FINANCIAL CORPORATION

 CHICAGO, Aug. 25 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned initial ratings to Whirlpool Financial Corporation (WFC) as follows: senior debt, 'A+' (Single-A-Plus); preferred stock, 'A-' (Single-A-Minus); and commercial paper, Duff 1. Since 1989, WFC has financed its business with inter-company borrowings from parent Whirlpool Corporation (senior debt and commercial paper were recently reaffirmed at 'A+' and Duff 1, respectively). WFC will shortly be re-entering the capital markets directly in order to more clearly segregate its financing activities from the those of the parent and to widen its funding base by issuing preferred stock. New debt issued by WFC will replace existing inter-company borrowings.
 The ratings primarily reflect a new support agreement which calls for Whirlpool to own at least 70 percent of WFC's outstanding voting stock and to maintain WFC's fixed charge coverage (excluding non- recourse debt and a $40 million after-tax write-down of assets taken in the first quarter of 1993) at a minimum of 1.25 times. As a result of a strategic reassessment, WFC is narrowing its business focus to compliment the parent's global appliance business. WFC is phasing out its aerospace financing activities and scaling back its commercial finance operation. The "new" WFC has adopted a distribution financing strategy, and will provide financing for manufacturers, distributors, retailers, and consumers. The new organization will be less risky, although it will take some time to liquidate the higher risk aerospace and non-core commercial portfolios.
 Aircraft loans and leases represented approximately 28% of WFC's $1.9 billion portfolio at yearend 1992. WFC took charges of $9 million in 1992 and $40 million in the first quarter of 1993 to cover the cost of office closings and severance and to write-off certain assets and establish reserves to facilitate the exit from the aerospace and non- core commercial businesses. Reserve levels appear to be adequate given WFC's intention to exit these businesses on a controlled basis.
 -0- 8/25/93
 /CONTACT: Philip M. Zahn, CFA of Duff & Phelps Credit Rating Co., 312-368-3154
 (WHR)


CO: Whirlpool Financial Corporation ST: Michigan IN: FIN SU: RTG

PS -- NY037 -- 0330 08/25/93 12:13 EDT
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Publication:PR Newswire
Date:Aug 25, 1993
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