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WESTINGHOUSE SENIOR DEBT LOWERED TO 'BBB+', OFF FITCHALERT -- FITCH FINANCIAL WIRE --

 NEW YORK, March 10 /PRNewswire/ -- Westinghouse Electric Corp.'s $1.4 billion long-term senior debt is lowered to 'BBB+' from 'A' and its commercial paper lowered to 'F-2' from 'F-1' by Fitch. Westinghouse Credit Corp.'s (WCC) $2.4 billion senior debt is lowered to 'BBB+' from 'A'. WCC's commercial paper is lowered to 'F-2' from 'F-1'. Westinghouse/Schidler Funding Corp.'s commercial paper is also lowered to 'F-2' from 'F-1'. All Westinghouse ratings are removed from FitchAlert, where they were placed with negative implications on November 20, 1992. The credit trend is uncertain.
 The downgrades reflect the corporation's diminished financial flexibility resulting from large losses at the financial services subsidiary. In addition, the company posted lower-than-expected operating results from continuing operations and has a less than favorable intermediate term outlook. Although Westinghouse has taken a series of positive steps to strengthen its financial profile, the successful completion of assets sales, a key component of its restructuring plan, must be accomplished in an uncertain business environment.
 The company continues to face cyclical and non-cyclical pressures which have delayed margin improvement and the generation of free cash flow. While certain business units reported profit margin gains in 1992, these improvements were largely the result of workforce reductions, not increased business activity. The company's strong market positions in large and diverse industrial markets, however, remains a key credit strength supporting the 'BBB+' senior debt rating.
 Weakness in the financial services business drained approximately $1.4 billion of cash from the organization over the past three years. In addition, late last year, Westinghouse was required to assume $1.8 billion of WCC's revolving debt in exchange for increased investment in financial services. The impact initially stretched leverage ratios but ultimately forced the company to sell assets to reduce borrowings and rebuild a weakened balance sheet.
 In November, Westinghouse announced a plan to exit the financial services business over an accelerated time horizon through the disposition of assets. To accommodate the necessary reserves, the company will also endeavor to sell several "nonstrategic" businesses: Distribution and Control, Westinghouse Electric Supply Co. (WESCO), The Knoll Group, and Westinghouse Communities. These subsidiaries were all generating earnings and capital for the company, and under normal circumstances might not be sold in the present environment.
 Fitch expects that the company can exit these businesses over the planned time horizon without incurring substantial additional charges. However, a further downgrade may be warranted if actual events materially differ from the original plan as a result of unforeseeable changes in economic and market conditions.
 On a consolidated basis, Westinghouse has $6.3 billion of net debt. There is no commercial paper outstanding, and the company has drawn $5.5 billion from its $6 billion bank facility. With other cash sources and funding available, Fitch does not anticipate any near- term funding problems. However, the company's financial flexibility is very limited until it can accomplish this restructuring and stop the flow of losses at Westinghouse Credit.
 -0- 3/10/93
 /CONTACT: Keith B. Foley, 212-908-0572 or Nancy E. Stroker, CFA, 212-908-0533, both of Fitch/
 (WX)


CO: Westinghouse Electric Corp. ST: Pennsylvania IN: CPR SU: RTG

LR -- NY045 -- 4664 03/10/93 11:51 EST
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Publication:PR Newswire
Date:Mar 10, 1993
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