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ITT FINANCIAL CORP'S 'A+' SENIOR DEBT, 'F-1' COMMERCIAL PAPER AFFIRMED BY FITCH AFTER CHARGE -- FITCH FINANCIAL WIRE --

 NEW YORK, Jan. 19 /PRNewswire/ -- ITT Financial Corp.'s A+' senior debt, A' subordinated debt, and F-1' commercial paper ratings are affirmed by Fitch following the announcement of a $612 million after-tax restructuring charge. The ratings are affirmed because of the stronger reserves that will result from the restructuring, the accompanying capital infusion from ITT Corp., and the improved operating potential from a refocused business strategy and management team. The credit trend is revised from stable to improving to reflect the likelihood of better earnings as poorly performing units are downsized and investments are made in markets with better potential.
 For the past three years, ITT Financial has struggled under the weight of two problem portfolios: unsecured consumer loans and commercial real estate. Though only 20 percent of total assets combined, the high chargeoffs and related credit expenses have cost the company over $1 billion of earnings since 1990, including this charge. The allocation of the restructuring charge will bring the reserve up to 35 percent of the unsecured consumer portfolio, which has already been charged down substantially, and to almost 12 percent of the commercial real estate loans, or about 50 percent of the nonperforming assets in that portfolio. Therefore, these large reserves should give the company the capacity to work down these portfolios without significant additional provisions.
 In taking this action, parent ITT Corp. is again demonstrating strong support for its subsidiary. With this $612 million capital infusion, ITT Financial's balance sheet will remain strong, with a debt/equity ratio, excluding the bank, of 6.6 times. This gives the company a good foundation from which to build its residential mortgage and home equity businesses, which are high priorities.
 Over the past three years, ITT Corp. has contributed a total of almost $700 million, net of dividends, to ITT Financial. In addition, the parent has made infusions this year to ITT Hartford Life Insurance ($680 million) and ITT Sheraton Hotels ($50 million). While the capacity to make these infusions has been provided in large part by the monetization of and gains in its ownership of Alcatel N.V., weakness at these subsidiaries has also put some pressure on leverage ratios. Nevertheless, with over $7.4 billion of equity and strong financial flexibility through its investments in many diversified companies, ITT Corp. remains capable of providing strong support to ITT Financial.
 -0- 11/19/93
 /CONTACT: Nancy E. Stroker of Fitch, 212-908-0533/
 (ITT)


CO: ITT Financial Corp. ST: IN: FIN SU: RTG

SM -- NY011 -- 6128 01/19/93 08:13 EST
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Publication:PR Newswire
Date:Jan 19, 1993
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