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DEERE & CO., UNIT

   DEERE & CO., UNIT  A' SENIOR DEBT AFFIRMED BY FITCH AFTER CHARGE
                       -- FITCH FINANCIAL WIRE --
    NEW YORK, Nov. 13 /PRNewswire/ -- Deere & Co.'s and John Deere Capital Corp.'s "A" senior debt and "F-1" commercial paper ratings are affirmed by Fitch. Fitch also affirms both companies' "A-" subordinated debt ratings and the "A" ratings on outstanding SEC rule 415 senior debt shelf registrations. The affirmations follow an assessment of the company's $120 million aftertax special charge announced yesterday. Approximately $6.0 billion of total debt is affected. The credit trends are stable.
    The charge relates to closure of Deere's foundry operation, as well as early retirement programs for salaried and hourly employees at various manufacturing, marketing, and headquarters operations.  Fitch views the company's action positively and believes that it reflects Deere's ongoing commitment to improve efficiency and reduce costs.
    Deere's ratings reflect its strong and rising market shares in the North American and European agricultural equipment markets, supported by its high product quality and solid dealer network. The company's industrial equipment business is gaining market share in its North American markets, although more slowly than the agricultural business.
    The company's equipment operations are conservatively financed. In contrast to other producers, it carries wholesale (dealer) receivables on its own books. Even with associated short-term debt supporting these receivables, debt leverage at the equipment operation was only 42 percent of capitalization at July 31, 1991, a conservative level at a cyclical low. Deere's pretax interest coverage, profit margins and return on capital have all improved consistently over the cycles of the last decade.
    John Deere Capital Corp., a captive finance company, is expanding its strong business base into agriculture credit-related products as well as dealer financing for boats and recreational vehicles.  John Deere Capital has consistently exhibited high profitability, with its return on assets typically ranging from 1.6-2 percent, as a result of good asset quality and expense controls.  Leverage is used conservatively, with debt-to-equity ratios well below an ultimate target of 7.5 times.
    -0-          11/13/91
    /CONTACT:  For more information on Deere & Co., call Donald H. Powell, 212-908-0570; for more information on John Deere Capital Corp., call Nancy E. Stroker, 212-908-0533, or Valerie Gerard, 212-908-0500, all of Fitch/
    (DE) CO:  Deere & Co. ST:  Illinois IN:  MAC SU:  RTG SH -- NY076 -- 4056 11/13/91 15:18 EST
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Publication:PR Newswire
Date:Nov 13, 1991
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