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Federal-Mogul's Ratings Put on Standard & Poor's CreditWatch, Negative Following T&N Announcement

29 September 1997

Federal-Mogul's Ratings Put on Standard & Poor's CreditWatch, Negative Following T&N Announcement

    NEW YORK, Sept. 29 -- Standard & Poor's today placed Federal-
Mogul Corp.'s double-'B' corporate credit and senior unsecured debt ratings,
and preliminary single-'B'-plus subordinated debt shelf rating on CreditWatch
with negative implications following the announcement that the company is in
discussions to acquire U.K.-based T&N PLc for an estimated 1.51 billion pounds
or about $2.4 billion in cash and assumed debt.  About $325 million of rated
debt is affected.
    If concluded, the acquisition would more than double Federal-Mogul's
revenue base and enhance the company's leading market position in engine
bearings.  However, it also would increase the company's debt leverage
significantly.  For the past year, Federal-Mogul has been restructuring
operations and selling assets in order to bolster its financial position,
which had deteriorated significantly over the 1995-1996 period.  The company
has made good progress in reducing debt and improving operating measures.
However, these improvements will be more than offset by this acquisition if it
is debt financed.
    Standard & Poor's will meet with Federal-Mogul's management to discuss how
the company plans to finance this transaction and what the prospects are for
improving the financial profile over the near to intermediate term.  Standard
& Poor's will also review the company's longer term financial and strategic
goals in light of this proposed transaction.  -- CreditWire

SOURCE  Standard & Poo's CreditWire