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RJR NABISCO PURCHASES $1 BILLION OF HIGH-COST DEBENTURES IN PRIVATE TRANSACTION

 RJR NABISCO PURCHASES $1 BILLION
 OF HIGH-COST DEBENTURES IN PRIVATE TRANSACTION
 NEW YORK, Feb. 24 /PRNewswire/ -- RJR Nabisco Holdings Corp. today announced that its subsidiary RJR Nabisco Capital Corp. has purchased $1 billion principal amount of the company's high-cost debentures in a privately negotiated transaction, using funds from its new bank credit facility.
 The company said that replacing the debentures with lower-cost debt was part of its program to continue taking advantage of favorable conditions in the financial markets to improve its capital structure and reduce interest costs.
 The company will retire $750 million principal amount (approximately $550 million accreted value) of its subordinated discount debentures due 2001, $165 million principal amount of its 15 percent payment-in-kind subordinated debentures due 2001, and $85 million principal amount of its 13.5 percent subordinated debentures due 2001.
 RJR Nabisco said that as a result of the premium paid for the debentures and a write-off of unamortized debt-issuance costs, the transaction will result in a one-time extraordinary after-tax charge of approximately $160 million that will be applied against the company's first quarter 1992 net income.
 "A primary reason for our aggressive deleveraging program last year was to gain more financial flexibility," said Louis V. Gerstner Jr., RJR Nabisco chairman and chief executive officer. "Today we put that flexibility to work.
 "While this transaction will provide a one-time book loss, it is advantageous for the shareholders in terms of both future cash flow and earnings," Gerstner continued.
 RJR Nabisco Holdings Corp. is the indirect parent of RJR Nabisco, Inc., an international consumer products company. RJR Nabisco's major operating units are R.J. Reynolds Tobacco Co., R.J. Reynolds Tobacco International, Inc., and the Nabisco Foods Group.
 -0- 2/24/92
 /CONTACT: Jason Wright of RJR Nabisco, 212-258-5770/ CO: RJR Nabisco Holdings Corp.; RJR Nabisco Capital Corporation ST: New York IN: REA SU: OFR


BR-BN -- AT002 -- 1740 02/24/92 09:10 EST
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Publication:PR Newswire
Date:Feb 24, 1992
Words:318
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