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AAR CORP. PROPOSED $50 MILLION SENIOR NOTES RATED 'BBB' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Oct. 4 /PRNewswire/ -- AAR Corp.'s proposed $50 million of senior notes are rated "BBB" by Fitch. The company's "BBB" senior debt and "F-2" commercial paper ratings are affirmed. Proceeds of the senior note offering will be used to reduce existing short-term debt and for general corporate purposes. The credit trend is stable.
 AAR's senior debt rating was lowered to "BBB" from "BBB+" in May and its "F-2" commercial paper was affirmed. AAR's long-term rating reflects the length and severity of the airline industry recession, resulting in significantly lower-than-historical interest coverage, profitability, and cash flow measures. Industry conditions continue to depress company results from their previously strong operating performance levels. However, Fitch believes that operating performance should gradually improve in the short term and fully recover as the industry emerges from its recession.
 AAR's strength continues to be the conservative management of its balance sheet. Despite the recession, the company's cash, accounts receivable, and inventory cover total debt 2.3 times (x), providing good asset coverage as of fiscal year end May 31, 1993. On a cash flow basis, total debt to EBITDA increased to 3.3x during fiscal 1993 from 2.3x the prior year. Gross and operating margins remain under considerable pressure; however, fiscal first-quarter results have demonstrated modest improvement over fiscal 1993.
 -0- 10/04/93
 /CONTACT: Thomas W. Hoens, CPA, of Fitch, 212-908-0569/
 (AIR)


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

LG -- NY050 -- 8279 10/04/93 10:37 EDT
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Publication:PR Newswire
Date:Oct 4, 1993
Words:247
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