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MORRISON KNUDSEN TO SIGNIFICANTLY REDUCE DEBT BY REDEEMING LIQUID YIELD OPTION NOTES

 MORRISON KNUDSEN TO SIGNIFICANTLY REDUCE DEBT
 BY REDEEMING LIQUID YIELD OPTION NOTES
 BOISE, Idaho, Aug. 13 /PRNewswire/ -- Morrison Knudsen Corp. (MK) (NYSE: MRN) announced today that it is redeeming all of its outstanding Liquid Yield Option Notes |LYONs (TM)~ due May 1, 2005.
 "In view of the current low interest rates available on short-term investments, and the company's strong cash position, this is an ideal time for the company to redeem the LYONs and become essentially debt free," said William J. Agee, MK chairman and chief executive officer. "The LYONs were an excellent financing vehicle for MK in 1990 when the prime interest rate was 10 percent, but not at today's 6 percent," Agee added.
 "The redemption of the 7.25 percent LYONs makes good use of the company's surplus cash and eliminates the dilution existing shareholders would experience if the LYONs were converted into approximately 6.2 million shares of the company's common stock," Agee said.
 The redemption will result in a one-time after-tax charge against third-quarter earnings of approximately 10 cents per share for the unamortized portion of the issuance cost. After redemption, the company expects to continue in a surplus-cash position.
 MK indicated that the LYONs will be redeemed on September 30, 1992, at a redemption price of $408.18 per $1,000 face amount at maturity. Original Issue Discount on the LYONs will cease to accrue on that date.
 Holders who wish to convert their LYONs into MK common stock, rather than have them redeemed by the company, may do so any time on or before September 30, 1992. Holders can convert each $1,000 face amount at maturity of their LYONs into 12.49 shares of MK common stock. However, based upon today's closing price of $21 per share of MK common stock, the current value of shares that would be received by LYONs holders upon conversion would be significantly less than the cash redemption price to be paid by the company on the redemption date.
 LYONs with a face amount of $500 million are presently outstanding, with a redemption value of $204 million.
 Continental Bank, National Association, will serve as both redemption agent and conversion agent. MK noted that an official notice of redemption will be mailed to all LYONs holders of record. LYONs may be surrendered by mail or in person for payment or conversion to Continental Bank, National Association in care of Mellon Securities Transfer Services, 33rd floor, 120 Broadway, New York, NY 10271.
 Morrison Knudsen Corp. is an international company serving the environmental, industrial process, power and transportation markets with complete development, design/engineering, construction, operating and financial services.
 -0- 8/13/92
 /CONTACT: Brent Brandon of Morrison Knudsen, 208-386-5000/
 (MRN) CO: Morrison Knudsen Corp. ST: Idaho IN: CST SU:


JH -- SE013 -- 9817 08/13/92 20:04 EDT
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Publication:PR Newswire
Date:Aug 13, 1992
Words:468
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