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FITCH AFFIRMS RJR NABISCO 'BBB' SENIOR DEBT AFTER CHANGE IN STOCK -- FITCH FINANCIAL WIRE --

 NEW YORK, April 13 /PRNewswire/ -- RJR Nabisco, Inc.'s $7.1 billion 'BBB' senior debt, $3.0 billion 'BBB-' subordinated debt, and $550 million 'F-2' commercial paper are affirmed by Fitch. The action follows today's announcement of certain changes in its planned initial public offering of approximately $1.6 billion in 93 million shares of letter stock of its Nabisco Foods Group. The credit trend is changed to stable from improving.
 Fitch affirmed RJR's ratings when the letter stock offering was originally announced in early March. Under the deal's original structure, the benefits of an approximately $1.6 billion debt reduction were mitigated by the burden of a common dividend, which was then forecast to be approximately $500 million a year. RJR today proposed reducing the dividend payout in light of recent competitive actions by the Philip Morris Co. RJR is expected to match Philip Morris's moves to protect its market share.
 Cash flow from operations for the consolidated company is strong and quite resilient despite the negative effects of the consumer trend toward generic cigarettes. RJR generates approximately $4.1 billion in annual cash flow. It requires $2.9 billion for annual cash needs of interest, dividends, taxes, capital expenditures, and working capital. This leaves a considerable cash cushion of almost $1.2 billion per year for debt reduction, acquisitions, or other corporate purposes, including dividends on the new letter stock. Nabisco's common dividend requirement is now anticipated to initially cost approximately $190 million per year, leaving RJR with a sizable annual free cash flow cushion of $1.0 billion with which to respond to competitive threats.
 RJR proposes to offer letter stock representing 25 percent of its Nabisco Foods Group to the public. After the stock is issued, RJR will report results separately as the RN-Nabisco Group and the RN-Reynolds Group, each of which will have their own class of stock. However, this will not affect the legal standing of bondholders, who are creditors of the combined entity. Fitch will therefore continue to assess RJR's creditworthiness based on its consolidated financial results and outlook.
 -0- 04/13/93
 /CONTACT: Thomas W. Hoens, 212-908-0569, or Leah W. Murch, 212-908-0511, both of Fitch/
 (RN)


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

AH -- NY085 -- 5405 04/13/93 17:08 EDT
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Date:Apr 13, 1993
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