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UNION OIL OF CALIFORNIA 'BBB+' SENIOR DEBT AFFIRMED BY FITCH -- FITCH FINANCIAL WIRE --

 UNION OIL OF CALIFORNIA 'BBB+' SENIOR DEBT AFFIRMED BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Aug. 13 /PRNewswire/ -- The 'BBB+' senior debt rating of Union Oil Co. of California, the principal subsidiary of Unocal Corp., is affirmed by Fitch. The rating applies to approximately $3.3 billion of outstanding issues. Also affirmed is the 'F-2' U.S. commercial paper rating; the Euro commercial paper rating is withdrawn as that program has been discontinued. The credit trend is improving.
 The affirmations take into account Unocal's strong asset quality, a well-maintained reserve base, and an improving focus in its operations. Management continues to take tough actions to restrain costs, enhance competitive position, and improve profitability and financial flexibility while assuming no real price growth. Census reductions, lower exploration spending, and higher sales of gas overseas should add $200 million annually to after-tax cash flow beginning in 1993.
 The company continues to sell or restructure underperforming and non-strategic assets. Through mid-year 1992, it has generated $1.67 billion from these sales and redeployed the funds for debt reduction and reserve development. Over the next five years, Unocal plans to reduce debt by $1.5 billion from the $800 million surplus cash flows and at least $700 million of net asset sales proceeds, half of which will come from the Energy Resources Division. Debt reduction was recently supplemented with a $513 million convertible preferred share offering, bringing pro forma debt leverage at mid-year 1992 to just under 60 percent. Although this leverage is still high compared to peers, creditors enjoy asset and market values well above carrying values.
 -0- 8/13/92
 /CONTACT: Mary Anne Sudol of Fitch, 212-908-0562/
 (UCL) CO: Union Oil Co. of California ST: California IN: OIL SU: RTG


CK -- NY084 -- 9846 08/13/92 16:52 EDT
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Publication:PR Newswire
Date:Aug 13, 1992
Words:297
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