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ILLINOIS CENTRAL CORPORATION: BANKS REMOVE RAILROAD FROM HLT STATUS

 ILLINOIS CENTRAL CORPORATION: BANKS REMOVE RAILROAD FROM HLT STATUS
 CHICAGO, March 17 /PRNewswire/ -- Illinois Central Corporation's (NYSE: IC) lead banks, First National Bank of Boston and co-agent Bank of America, notified the company that, effective today, on the third anniversary of the acquisition of the company, they have de-listed the Illinois Central Railroad as a Highly Leveraged Transaction (HLT) as defined by the Office of the Comptroller of the Currency. Recent OCC regulations permit an HLT to be de-listed if it has met planned expectations for three years.
 Since March 1989, when the railroad was acquired by The Prospect Group, Inc. in a leveraged transaction, the company has met or exceeded its plans, including earning $9.7 million in 1989, $46.2 million in 1990 and $65.4 million in 1991. In addition, the company raised $66 million in new equity and paid down the railroad's debt by $225 million.
 In the past three years, the company has been ahead of plan in making debt payments to its private lenders and on public debt. At December 1989, the company's leverage ratio (debt to debt plus equity) was 98 percent; by the end of 1991 the ratio had been lowered to 63 percent. Additionally, in 1991 the company successfully restructured $300 million or approximately 60 percent of its debt to better match the long-term characteristics of its assets. The 1991 restructuring included the equity offering, adjustments to rates and payment schedules and the prepayment of $50 million of the bank debt, the private placement of $160 million new debt, and the call, three years in advance, of $150 million of 15.5 percent Series K Mortgage Bonds and $10 million of 11.25 percent Series I Mortgage Bonds. The restructuring has permanently reduced annualized interest expense by $12 million.
 The notification by the banks acknowledges that the railroad has met the OCC criteria for de-listing. The improved operating and financial health of the company was recognized in October 1991 by Moody's Investor Service and in February 1992 by Standard & Poor's Corp. when both institutions issued credit rating upgrades on the company's debt.
 The immediate impact of the de-listing from HLT status will be a 50 basis point (.5 percent) reduction in the interest rate charged on the $90 million outstanding on the Term Facility provided by the bank lending group. Edward L. Moyers, chairman, said "This is welcome news and another indication that they are recognizing our reshaped financial status." Dale Phillips, vice president-chief financial officer, said, "The long term impact of this event will be greater financial flexibility through improved access and more competitive pricing in the financial markets."
 Illinois Central Corporation's principal subsidiary, Illinois Central Railroad Co., operates a 2,700-mile freight railroad between Chicago and the Gulf of Mexico.
 -0- 3/17/92
 /CONTACT: Douglas Koman, treasurer of Illinois Central, 312-819-7935/
 (IC) CO: Illinois Central Corporation ST: Illinois IN: TRN SU: FNC


TS -- NY023 -- 8708 03/17/92 10:23 EST
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Publication:PR Newswire
Date:Mar 17, 1992
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