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DR PEPPER/SEVEN-UP $375 MILLION NOTES RATED 'B+' BY FITCH -- FITCH FINANCIAL WIRE --

 DR PEPPER/SEVEN-UP $375 MILLION NOTES RATED 'B+' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Oct. 16 /PRNewswire/ -- Dr Pepper/Seven-Up Companies, Inc.'s proposed new issue of $375 million senior subordinated discount notes due 2002 is rated 'B+' by Fitch. Proceeds of the offering, combined with the 1992 bank financing and cash on hand, will be used to retire substantially all of the company's outstanding debt and the preferred stock of Dr Pepper and Seven-Up. The credit trend is stable.
 The rating reflects the mature, stable credit profile of the domestic soft drink industry, Dr Pepper/Seven-Up's demonstrated operating performance, the company's comparatively high debt leverage, and the holding company subordinated ranking of this issue within the overall capital structure.
 The domestic soft drink industry has annual retail sales of approximately $47 billion. Products of Dr Pepper/Seven-Up, the third largest soft drink concentrate company, currently account for slightly more than 10 percent of that market. While recent growth in the overall market has slowed to 1-2 percent per year, the company has consistently outperformed the market despite regulatory setbacks in the New York City area. Soft drink concentrate companies have only modest capital expenditure and research and development needs relative to their level of sales. Over the past three years, the company has spent less than $5 million on capital expenditures to support almost $1.7 billion of sales. This profile allows these companies to carry a higher level of debt, and consequently lower coverages, than similarly rated companies in other industries.
 The notes will be issued by the holding company and proceeds will be used as an equity infusion into the operating company. No cash payments of interest or principal are required during the first five years. Substantially all of Dr Pepper/Seven-Up assets are held by the operating company and will be used to secure the debt under the bank credit agreement. The bank debt contains a cash flow sweep provision; it is expected that available free cash flow will be directed towards early repayment of the bank debt.
 -0- 10/16/92
 /CONTACT: Thomas W. Hoens, CPA of Fitch, 212-908-0569/ CO: Dr Pepper/Seven-Up Companies, Inc. ST: Texas IN: FOD SU: RTG


PS -- NY043 -- 0978 10/16/92 13:09 EDT
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Publication:PR Newswire
Date:Oct 16, 1992
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