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VIACOM $450 MILLION 'BB+' SUBORDINATED DEBT ON FITCHALERT POSITIVE -- FITCH FINANCIAL WIRE --

 NEW YORK, Sept. 13 /PRNewswire/ -- Viacom International Inc.'s $450 million 'BB+' subordinated debt and $800 million 'BBB- /BB+' senior/subordinated shelf registration are placed on FitchAlert positive. The action is in response to the company's announcement that it has agreed to acquire Paramount Communications for $8.2 billion, or $69.14 per Paramount share of which $9.10 is in cash and the rest is payable in Viacom stock. The cash portion of the deal would total more than $1 billion. The merger is expected to be completed later this year or early 1994.
 Key to any rating change will be a review of the transaction's final terms, specifically how the cash portion of the acquisition will be financed. Assuming the acquisition is financed entirely with additional debt, the new company would still have higher interest coverage and a lower amount of debt relative to its operating cash flow than Viacom has now.
 The new company, Paramount Viacom International Inc., would have annual revenue in excess of $6 billion and only about $3.5 billion of debt, giving it the financial flexibility to grow further through acquisition and the development of new businesses and technology without taking on additional leverage.
 In addition to greater financial flexibility, the acquisition of Paramount would give Viacom access to more original programming. Although Viacom owns highly popular cable networks and a significant cable television operation, it only spends about $100 million annually on original programming. Paramount on the other hand spends up to eight times that amount each year to produce movies and television shows. As an owner and developer of a significant amount of filmed entertainment software, the combined entity would benefit substantially from the introduction of new technologies in home entertainment. It would also be well positioned to capitalize on the global expansion of media products.
 -0- 9/13/93
 /CONTACT: Keith B. Foley of Fitch, 212-908-0572/
 (VIA)


CO: Viacom International Inc. ST: New York IN: TLS SU: RTG

WB -- NY080 -- 1383 09/13/93 14:42 EDT
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Publication:PR Newswire
Date:Sep 13, 1993
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