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BT/MCI DEAL WILL NOT IMPACT BT CREDIT QUALITY, FITCH SAYS -- FITCH FINANCIAL WIRE --

 NEW YORK, June 2 /PRNewswire/ -- London-based British Telecommunications PLC's (BT) plans to acquire 20 percent of MCI Corp. will not impact its credit quality measures, Fitch says. Fitch expects BT's debt-to-capital ratio to remain below 25 percent and interest coverage to stay above 10 times. Fitch does not rate BT's debt; it rates MCI's senior debt `A-'.
 BT expects to finance part of the $4.3 billion acquisition with $1.8 billion proceeds from the sale of McCaw Communications, Inc. to AT&T Co. (senior debt `AA-'), assuming the AT&T/McCaw transaction closes before the MCI deal. Alternately, BT may use some debt financing for part of the investment. BT will use mostly cash for the remaining $2.5 billion.
 BT and MCI also announced the formation of a strategic alliance to build an international network platform for enhanced global communications services, including outsourcing, managed networking, and systems integration. BT and MCI will jointly contribute $1 billion to the alliance. Additionally, BT will transfer assets from wholly owned Syncordia Corp., contribute its four "Cyclone" global switches, and some employees from BT-North America Inc. to the joint company, which will be 75 percent owned by BT.
 The global intelligent communications platform envisioned by BT should provide a competitive edge in capturing fast-growing demand from multinational corporations without weakening credit quality. The alliance allows BT and MCI to expand their existing networks more economically through scale.
 BT is the fourth largest international carrier with 1992 revenues of almost $20 billion and cash flow from operations of approximately $8 billion. The company was privatized in 1984.
 -0- 6/2/93
 /CONTACT: Susan Kalla of Fitch, 212-908-0555/
 (BTY)


CO: British Telecommunications PLC ST: IN: TLS SU: RTG

WB -- NY091 -- 4659 06/02/93 17:46 EDT
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Date:Jun 2, 1993
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