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B A T CAPITAL CORP. $400 MILLION GUARANTEED NOTES RATED 'A+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, March 17 /PRNewswire/ -- B A T Capital Corp.'s proposed $400 million guaranteed Euronotes due 1998 are rated `A+' by Fitch. Principal and interest on the notes are unconditionally and irrevocably guaranteed by B A T Industries p.l.c. and rank pari passu with that company's unsecured and unsubordinated obligations. The credit trend is stable.
 The ratings are based on the geographic diversity, magnitude, and stability of the B A T Industries core tobacco and insurance operations. Through its Brown & Williamson subsidiary, B A T ranks as the third largest tobacco company in the United States with particular strength in the growing price/value segment of the market. In 1992, propelled by a doubling of volume for its leading price/value brand, GPC Approved, Brown & Williamson increased its corporate volume by 6.4 percent the largest such increase for any tobacco company. As a whole, the domestic U.S. market volume declined by 0.4 percent. Excluding the U.S. marketplace, B A T's tobacco operations are as large as those of Philip Morris and RJR Nabisco combined.
 B A T's principal insurance subsidiaries, Eagle Star Insurance Co. and Allied Dunbar Assurance in the United Kingdom, and Farmers Group, Inc. in the U.S., offer a broad range of insurance and trust products, and have a strong presence in their respective markets. The insurance operations represented over 32 percent of B A T's revenues at year end 1992, in line with historical levels, but an increase over the 17 percent contribution of 1991. The change is largely attributed to an improvement in Eagle Star's earnings results which in recent years have been impacted by inadequate pricing in the property and casualty lines, and substantial losses incurred in the mortgage indemnity business.
 Management's efforts to increase profitability through price increases, a change in underwriting guidelines, and an exit strategy for unprofitable lines of business are beginning to show results. Eagle Star's operating results improved substantially at year end 1992, with a pre-tax loss of 71.4 million pounds compared to a loss of 394 million pounds in 1991. Although the mortgage indemnity business will in all likelihood continue to show some adverse development, its impact is mitigated by stricter underwriting practices and controls on new mortgage indemnity business, and better operating results in the traditional lines of business. In addition, the 450 million pound capital contribution made by B A T in 1992, raised Eagle Star's solvency ratio to 54 percent, which should provide a greater cushion for adverse loss development, as well as position the company to take advantage of growth opportunities as the market improves.
 B A T Industries continues to work toward enhancing its leadership positions in selected financial services markets in the United Kingdom and North America. Earnings growth in the U.S. insurance and United Kingdom operations should continue to provide steady support for holding company debt service.
 -0- 3/17/93
 /CONTACT: Thomas W. Hoens, 212-908-0569, or Lygia X. Campbell, 212-908-0500, both of Fitch/


CO: B A T Capital Corp. ST: IN: SU: RTG

WB -- NY050 -- 7038 03/17/93 12:11 EST
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Publication:PR Newswire
Date:Mar 17, 1993
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