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ARCO CHEMICAL 'F-1' COMMERCIAL PAPER AFFIRMED BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, April 23 /PRNewswire/ -- ARCO Chemical Co.'s (ACC) "F-1" commercial paper is affirmed by Fitch. Outstanding commercial paper is always fully supported by funds available under ACC's $500 million revolving credit facility.
 ACC holds major market positions in each of its three core petrochemical products, despite lively competition from larger petroleum and chemical companies. Its processes are "green" and low-cost, and intensive efforts are raising the level of downstream integration and margin potential. The company mitigates its commodity price exposure through supply, sales, and pricing arrangements.
 With major capacity expansions finished, ACC's capital spending over the near term is forecast at closer to $250 million annually, compared with peak annual spending of nearly $500 million. ACC's cash sources and uses are now close to breakeven, and despite an above-average dividend payout, a return to surplus cash flow generation should follow a strengthening in demand and prices.
 Although it operates in a cyclical business, ACC maintains a solid financial profile at cycle lows and a strong one during cyclical recoveries. In the last three years, during which industry fortunes were poor, ACC contained debt leverage at 41 percent, and improved cash flow debt cover to 45 percent last year. In 1992, pretax cash flow covered gross interest about five times. Credit protection indicators should strengthen gradually as ACC's key housing and auto end markets improve and its cost disciplines are maintained. Creditors enjoy additional protection, as the market value of ACC's common shares substantially exceeds book equity.
 ARCO Chemical, based in Newton Square (Pa.), is a leading worldwide producer and marketer of intermediate chemicals and specialty products.
 -0- 4/23/93
 /CONTACT: Mary Anne Sudol, CFA of Fitch, 212-908-0562/
 (RCM)


CO: ARCO Chemical Co. ST: Pennsylvania IN: CHM SU: RTG

LR-TS -- NY050 -- 0070 04/23/93 12:42 EDT
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Publication:PR Newswire
Date:Apr 23, 1993
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