NEW YORK, Feb. 13 /PRNewswire/ -- American General Finance Corp.'s (AGFC)
"F-1+" commercial paper rating is placed on FitchAlert negative following
parent company American General Corp.'s (AGC) proposed $1.8 billion purchase
of USLife Corp. The FitchAlert also considers AGFC's continued asset quality
problems. Approximately $2.3 billion of commercial paper is affected. The
FitchAlert will be resolved pending the receipt of additional information
regarding the transaction and meetings with American General Corp. management.
AGFC's rating may be downgraded depending on this information.
    The FitchAlert reflects the scope of the acquisition and AGC's assumption
of nearly $600 million of USLife debt. AGFC's commercial paper rating is
linked to its parent company's performance. Although no formal support
agreement exists, AGC has demonstrated its support of AGFC through capital
contributions, linkage of treasury operations and shared bank facilities.
    The FitchAlert also reflects AGFC's continued asset quality problems as
its losses and delinquencies are higher in comparison to its peers. To stem
losses, the company recently announced it's intention to sell its poorly
performing credit card and satellite dish receivables totaling nearly $900
million.
    Going forward, AGFC will focus on acquiring and originating real estate
secured loans. Internal growth will be slower as the company has tightened its
underwriting standards. The company purchased nearly $1.0 billion of primarily
real estate secured receivables during 1996. For the year ended Dec. 31, 1996
AGFC's net losses to average managed receivables were 5.51% and delinquencies
at Dec. 31, 1996 were 4.20%. Net receivables were $7.4 billion.

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