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DCR Upgrades Debt Ratings of Textron Inc.

22 June 1999

DCR Upgrades Debt Ratings of Textron Inc.

    CHICAGO, June 21 -- Duff & Phelps Credit Rating Co. (DCR) has
raised the ratings of Textron Inc.'s senior unsecured debt to 'A' (Single-A)
from 'A-' (Single-A-Minus), the trust preferred securities of Textron Capital
I to 'A-' (Single-A-Minus) from 'BBB+' (Triple-B-Plus), and Textron's
commercial paper to 'D-1' (D-One) from 'D-1-' (D-One-Minus).
    The rating action reflects Textron's excellent earnings stability,
continuing year-over-year profit momentum, and improving quantitative credit
measures.  The company possesses strong market positions in aircraft,
automotive and industrial businesses, with the cyclical sensitivity of
individual businesses moderated by the diversity of operations.  Earnings
trends for all segments are favorable.
    With the sale of Avco Financial Services (AFS) earlier this year for
after-tax proceeds of approximately $2.9 billion, Textron has redefined its
business portfolio.  The company is now primarily a diversified manufacturing
company, having exited its two largest financial service businesses in the
past two years.  In 1997, the company completed the sale of its 83 percent
interest in its Paul Revere insurance subsidiary.  The remaining finance
operation, Textron Financial Corp., is a commercial finance business that also
provides financing of Textron-manufactured products.
    Proceeds from the AFS divestiture are being applied toward share
repurchases in the near term and an accelerated pace of acquisitions,
consistent with maintaining a conservative capitalization and solid coverage
of interest.  At the end of first quarter 1999, the company had minimal net
debt.  Textron has been highly successful in recent years in broadening the
base of its manufacturing businesses and enhancing growth opportunities
through acquisitions.  Risks of the acquisition program are minimized by the
company's strategy of targeting small- to medium-size, bolt-on businesses.