Newspaper article THE JOURNAL RECORD

Phillips Accelerates Debt Reduction Plan

Newspaper article THE JOURNAL RECORD

Phillips Accelerates Debt Reduction Plan

Article excerpt

BARTLESVILLE - The debt reduction program of Phillips Petroleum Co. will be accelerated to reduce total debt by $900 million during 1988, C.J. Silas, chairman and chief executive officer, said Tuesday.

Phillips had planned to reduce debt by $400 million during the year.

"We continue," said Silas, "to experience improved earnings and expect the third quarter to exceed the $170 million we reported in the second quarter. Our improved financial performance allows us to take these additional steps to reduce debt, while maintaining a substantial cash position."

The $900 million debt reduction will include a recently completed preferred stock redemption, he said.

At the beginning of 1988, Phillips had $5.8 billion in total debt and preferred stock. With the accelerated debt reduction, the company expects its total debt to be approximately $4.9 billion at the end of 1988.

So far in 1988, Phillips has reduced total debt and preferred stock obligations by $500 million with the completion of a $212 million preferred stock redemption and other debt repayments. As a result, total debt now stands at $5.3 million, the company said Tuesday.

Phillips plans to reduce debt by another $400 million this year.

These reductions will consist of an $800 million redemption of floating rate senior notes due 1995 and other debt repayments of $50 million. The $850 million will be funded by $450 million in recently completed financing and by $400 million available in cash.

As of Sept. 15, Phillips said there was approximately $1.25 billion of the floating rate senior notes outstanding.

The $800 million redemption of the floating rate senior notes will take place Nov. 10. Formal notice of the call will be made to note holders on or before Oct. 11, Phillips said. The notes to be called will be selected by a lot in a process supervised by IBJ Schroder Bank and Trust, trustee of the issue. Noteholders of record as of Sept. 30 will participate in the selection of notes to be called.

The notes will be redeemed at a price of 100 percent plus accrued interest from Sept. 15. Manufacturers Hanover Trust Co. …

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