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DUFF & PHELPS CREDIT RATING CO. ADDS NYNEX CORPORATION, NYNEX CAPITAL FUNDING CO., AND NYNEX CREDIT CO. TO RATING WATCH - DOWN

 CHICAGO, Oct. 6 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has placed the debt securities of NYNEX Corporation (NYN), NYNEX Capital Funding Co. (NYN-CF), and NYNEX Credit Co. (NYN-CR) on Rating Watch -- Down. The debentures of NYN and the medium-term notes of NYN-CF and NYN-CR are rated "A+" (Single-A-Plus). The debt of NYN-CF is subject to an unconditional guarantee by NYN, while the debt of NYN-CR is subject to a support agreement with NYN.
 This action was taken as a result of the announcement that NYNEX plans to purchase $1.2 billion of cumulative convertible preferred stock of Viacom Inc. The preferred stock carries an annual dividend of five percent, is convertible into shares of Viacom Class B non-voting common stock at a conversion price of $70, and is redeemable after five years. Should Viacom's proposed merger with Paramount fail to be completed by Aug. 31, 1994, either NYN or Viacom may reduce NYN's investment by $600 million. Viacom Inc. and its subsidiaries own significant cable TV programming assets, including MTV, Nickelodeon, VH-1, Showtime, and The Movie Channel; own cable TV systems serving more than one million subscribers; and own five television stations and 14 radio stations.
 The impact of this investment on the ratings of the debt of NYN and its affiliates will depend in large part upon the method of financing the investment. If financed solely with debt, NYN's pretax interest coverages would decline by 20 to 30 basis points, while the debt ratio would rise by roughly three percentage points. However, NYN has indicated that it intends to finance this investment with a significant amount of equity. If an equity offering results in strengthening of NYN's existing capital structure, it is likely that the ratings will be reaffirmed at the existing level. Other critical rating factors will be the final cost of Viacom's bid for Paramount, if successful, and the potential for further NYN investment in Viacom, possibly to assist in a network upgrade of its cable properties. The partnership with Viacom will better position NYN in the future to provide video services within its service territory, assuming that the remaining regulatory restrictions prohibiting this are relaxed.
 NYNEX Corporation, through New York Telephone and New England Telephone and Telegraph, provides local telecommunications services to 15.8 million access lines in seven northeastern states. Other NYNEX subsidiaries are engaged in directory publishing, cellular communications, software services and database management, and financial services. NYNEX CableComms is the largest cable communications operator in the United Kingdom with 19 franchises encompassing nearly 3 million homes and businesses.
 -0- 10/6/93
 /CONTACT: James J. Stork, CFA of Duff & Phelps Credit Rating Co., 312-368-3125/


CO: NYNEX Corporation; NYNEX Capital Funding Co.; NYNEX Credit Co. ST: New York IN: TLS SU: RTG

TS -- NY042 -- 9318 10/06/93 12:03 EDT
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Publication:PR Newswire
Date:Oct 6, 1993
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