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B-A-T CAPITAL CORP. $250 MILLION GUARANTEED NOTES RATED 'A+' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, April 19 /PRNewswire/ -- B-A-T Capital Corp.'s proposed $250 million guaranteed notes due 2003 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. Within the price/value segment, Brown & Williamson, RJR Nabisco and Philip Morris are the dominant players in the rapidly expanding deep discount segment. Brown and Williamson's leading deep discount product, GPC Approved, doubled its unit volume in 1992 and is now the seventh largest domestic market brand. This paced the company, which increased its corporate volume in 1992 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 UK, 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 operating profit for 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 overcapacity in the property and casualty lines market, 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 in 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 U.K. and North America. Earnings growth in the U.S. insurance and U.K. operations should continue to provide steady support for holding company debt service.
 -0- 4/19/93
 /CONTACT: Thomas W. Hoens, 212-908-0569, or Lygia X. Campbell, 212-908-0500, both of Fitch/
 (BTI)


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

SH -- NY071 -- 7302 04/19/93 10:48 EDT
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Publication:PR Newswire
Date:Apr 19, 1993
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