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GENERAL INSTRUMENT COMPLETES INTEREST-REDUCTION PROGRAM; WILL SAVE $25 MILLION A YEAR IN DEBT-SERVICE COSTS

 CHICAGO, July 1 /PRNewswire/ -- General Instrument (GI) (NYSE: GIC) today announced two steps that complete its previously announced program to reduce interest costs, resulting in annual savings in debt service of approximately $25 million.
 GI said it has prepaid the last $100 million of the $600 million in subordinated debt issued in connection with its 1990 acquisition by Forstmann Little & Co. and has also completed the revision of its bank credit facility at a lower interest rate. Earlier this month, GI prepaid the other $500 million of 9.5 percent subordinated debt, which was not due until after 2001, with the proceeds of a recent public offering of 5 percent convertible debt.
 The revised credit facility, signed yesterday with a group of banks led by Chemical Bank, totals $500 million and carries an interest rate of approximately 4.5 percent (LIBOR plus 1.25 percent), down from 5.75 percent (LIBOR plus 2.5 percent) previously. Of the $500 million credit, $100 million was used to repay subordinated debt, $300 million continues existing bank borrowings, and approximately $100 million is available for future use.
 "Sharply lower interest costs will help fuel GI's continuing growth while simultaneously improving earnings," said Richard S. Friedland, chief financial officer. "GI's balance sheet has come a long way since 1990, and we have now repaid or restructured all of the $1.35 billion in debt from the 1990 acquisition. Our current debt of approximately $960 million carries an average interest rate of less than 5 percent and has terms that reflect GI's improved performance and prospects."
 General Instrument is a world leader in broadband communications, distribution and access control technologies for cable, satellite and terrestrial broadcasting applications, as well as in discrete power rectifying components.
 -0- 7/1/93
 /CONTACT: George Sard or Anna Cordasco of Sard Verbinnen & Co., 212-687-8080, for General Instrument/
 (GIC)


CO: General Instrument Corporation ST: Illinois IN: TLS SU:

TS-MP -- NY013 -- 7568 07/01/93 09:16 EDT
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Publication:PR Newswire
Date:Jul 1, 1993
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Should a company elect to defer cancellation of debt?

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