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TOBACCO RATINGS OFF FITCHALERT AFTER SUPREME COURT DECISION -- FITCH FINANCIAL WIRE --

 TOBACCO RATINGS OFF FITCHALERT AFTER SUPREME COURT DECISION
 -- FITCH FINANCIAL WIRE --
 NEW YORK, June 24 /PRNewswire/ -- Fitch's tobacco industry ratings are affirmed and removed from FitchAlert following today's Supreme Court decision. Affected companies are RJR Nabisco, Inc. related entities and Loews Corp., and its unit Lorillard, Inc.
 RJR Nabisco, Inc.'s 'BBB' senior debt and 'BBB-' subordinated debt are affirmed. RJR Nabisco Holdings Corp.'s 'BBB-' senior converting debentures and approximately 'BBB-' preferred stock. RJR Nabisco, Inc.'s 'F-3' commercial paper is placed on FitchAlert with positive implications.
 Loews Corp.'s 'AA' senior debt and 'AA-' subordinated debt are affirmed, as are Lorillard's 'AA-' subordinated debentures.
 Today's Supreme Court decision has neutral, if not positive, implications for tobacco industry ratings. The court largely affirmed the tobacco industry's most important defense of preemption of state law-based injury claims.
 As Fitch indicated in April 1991, the credit implications of the Cipollone case depend on the magnitude of liability against tobacco companies. The high court ruling appears narrowly based to permit suits for conspiracy or fraud through communications other than advertising or promotions, for failure to warn of the dangers of smoking for smokers who began smoking in the years before 1969, and for breaching express warranties made about cigarettes. Under the latter two theories, there should be no additional risk to holders of tobacco industry debt securities. This is because the number of potential plaintiffs would not be significantly increased, and the tobacco companies would still be able to defend the suit on theories, such as the assumption of risk, that have proven successful in the past.
 The conspiracy or fraud theory is somewhat more troubling. Recent suits in New York have alleged an industrywide conspiracy linked to the Council for Tobacco Research. Fitch will continue to monitor these cases.
 The high court's decision is a positive step in that it precludes the most common theories of liability claimed by plaintiffs.
 -0- 6/24/92
 /CONTACT: Leah W. Murch, Esq., 212-908-0511, or Thomas W. Hoens, CPA, 212-908-0569. For a copy of Fitch's complete report on Tobacco Liability, call Market Services at (1-800) 75FITCH/ CO: ST: IN: TOB SU: RTG


PS -- NY071 -- 3495 06/24/92 17:34 EDT
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Date:Jun 24, 1992
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