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LOCKHEED DEBT RATING LOWERED BY DUFF & PHELPS

 CHICAGO, Jan. 26/PRNewswire/ -- Duff & Phelps Credit Rating Co. announced today that it has lowered its rating of Lockheed Corporation's senior debt to "A-" (Single-A-Minus) from "A" (Single-A). Approximately $1.6 billion of debt securities are affected by the rating change. At the same time, we have reaffirmed Lockheed's commercial paper rating at Duff 1 (One). Furthermore, we have removed Lockheed's debt securities from Rating Watch where the indicated trend was downward.
 Our rating reduction reflects the negative impact on key protection measures of Lockheed's planned acquisition of the Fort Worth division of General Dynamics for approximately $1.5 billion in cash. It is Lockheed's intention to borrow all of the funds that will be paid to General Dynamics. As a result, Lockheed's fixed obligation ratio will rise to about 55 percent (excluding the impact of FASB No. 106) and fixed charge coverage will drop to about 3.0 times (versus 39 percent and 4.5 times on a pre-acquisition basis). Our rating action has also taken into account management's commitment to restore protection measures to prior levels as quickly as possible and the strong cash flow generated by the combined entity.
 The company intends to finance the Fort Worth purchase price, initially, with commercial paper. We have retained our commercial paper rating, despite the large issuance, based on the significant bank lines back-up (well in excess of the amount of commercial paper to be issued) and the company's stated intention to refinance the commercial paper quickly with permanent, longer-term debt securities.
 -0- 1/26/93
 /CONTACT: W. Dudley Heer, CFA of Duff & Phelps, 312-368-3123/
 (LK)


CO: Lockheed Corporation; General Dynamics ST: California IN: ARO SU: RTG

TS -- NY042 -- 6309 01/26/93 11:01 EST
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Publication:PR Newswire
Date:Jan 26, 1993
Words:286
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