DUFF/PHELPS PUTS STANDARD OIL<SRD> ON WATCH LIST
Duff and Phelps put the outstanding
fixed income securities of of Standard Oil Co on its watch list
following the tentative offer by British Petroleum of North
America <BP> to buy the company.
    Standard Oil's nearly three billion dlrs of long-term debt
is currently rated DP-5 (high A) by the ratings agency.
    British Petroleum currently owns about 55 pct of Standard
Oil's outstanding common stock and to acquire the remainder at
the tender offer price of 70 dlrs per share would cost 7.4
billion dlrs.
    British Petroleum intends to fund two-thirds of that
purchase with borrowed funds and the rest with cash.
    The additional debt will raise the fixed obligation ratio
of British Petroleum from under 30 pct to perhaps 45 pct and
increase its debt service requirements, Duff and Phelps said.
    However, putting Standard Oil's debt on its watch list,
which Duff and Phelps said had "potentially negative
implications," may eventually result in an upgrade depending on
how British Petroleum restructures the company, Howard Mount of
the ratings agency said.
    Mount said that acquiring Standard Oil's substantial cash
flows and eliminating the annual dividend, which totaled 305
mln dlrs to common shareholders in 1986, would help satisfy
British Petroleum's higher debt service.
 Reuter
