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DUFF & PHELPS PLACES DEBT OF NERCO, INC. ON RATING WATCH -- FAVORABLE/UNFAVORABLE

 CHICAGO, March 3 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has placed the outstanding debt securities of NERCO, Inc. on Rating Watch -- Favorable/Unfavorable pending the merger of the company with Kennecott Corporation. The rating will be under review pending the clarification of the status of the NERCO debt following the acquisition. Duff & Phelps currently rates NERCO's medium-term notes BB+' (Double-B-Plus) and its commercial paper Duff 3.
 In mid-February, NERCO announced that it had agreed to be acquired by Kennecott Corporation, a unit of RTZ Corp. PLC. At this time it is unclear if Kennecott and/or RTZ will assume or guarantee the debt of NERCO.
 Additionally, NERCO is negotiating with its bank group to obtain amendments to its bank covenants. If the amendments are not obtained, NERCO will be in violation of the covenants of its principal debt agreement as of March 31, 1993. Such a violation would trigger a default of the company's medium-term notes and capital lease obligations. While the bank debt likely will be repaid (or refinanced) with the consummation of the merger with Kennecott, it is uncertain whether the lender will agree to the waivers before the merger is effectuated.
 -0- 3/3/93
 /CONTACT: David W. Eisinger of Duff & Phelps Credit Rating Co., 312-368-3145/
 (NER)


CO: NERCO, Inc. ST: Oregon IN: MNG SU: RTG

CK -- NY046 -- 2446 03/03/93 12:10 EST
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Publication:PR Newswire
Date:Mar 3, 1993
Words:228
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