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AAR CORP. 'BBB+' SENIOR DEBT, 'F-2' COMMERCIAL PAPER ON FITCHALERT NEGATIVE -- FITCH FINANCIAL WIRE --

 NEW YORK, March 11 /PRNewswire/ -- AAR Corp.'s $65 million 'BBB+' 9.5 percent senior notes due 2001 and 'F-2' commercial paper program are placed on FitchAlert with negative implications. The action follows AAR's announcement today of a restructuring charge and third quarter loss.
 AAR's declining sales and profitability over the last two years reduced bondholder protection measures below those expected for the rating category. The large financial losses incurred in the domestic airline industry due to weak traffic and intense price competition has resulted in the airlines deferring all but the most essential maintenance. In turn, this has led to depressed margins for AAR and its competitors.
 Fitch expects further pressure on sales and profitability due to anticipated weak operating levels in the airline industry in general and the absorption by the marketplace of bulk parts inventories from liquidated carriers. Mitigating factors include the recently awarded $45 million government contract to manufacture equipment for the Rapid Deployment Force and a new multi-year inventory management contract with Lufthansa German Airlines.
 AAR, headquartered in Elk Grove Village, Ill., is a leading supplier of aerospace/aviation products and services.
 -0- 3/11/93
 /CONTACT: Thomas W. Hoens of Fitch, 212-908-0569/
 (AIR)


CO: AAR Corp. ST: Illinois IN: AIR SU: RTG

PS -- NY027 -- 5036 03/11/93 10:12 EST
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Publication:PR Newswire
Date:Mar 11, 1993
Words:217
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