Rjr Eases Its Debt Load
Bid goodbye to another remnant of the overleveraged '80s: RJR Nabisco has recaptured investment-grade ratings for most of its $14 billion debt load. The food-and-tobacco giant, whose $29 billion in debt equaled about 95% of capitalization when it went private in 1989, has chopped its debt to 62%. RJR also expects to close a new pact soon that will lower the rate on its $3 billion in bank loans by about two percentage points, to less than 7%, and ease restrictive covenants. The result: more strategic flexibility as RJR tries to expand its tobacco and food businesses in Eastern Europe and Mexico and its food business in Latin America.