NEW YORK, April 17 /PRNewswire/ -- American General Finance Corp.'s (AGFC)
commercial paper rating is affirmed at 'F-1+' by Fitch Investors Service and
removed from FitchAlert negative.  This action follows a review of American
General Corp. (AGC) after its announced $1.8 billion purchase of USLife Corp.
AGFC's approximate $2.3 billion of commercial paper was placed on FitchAlert
negative Feb. 13, 1997, following the announcement of the USLife acquisition
coupled with AGFC's continued asset quality problems.
    In order to stem losses, AGFC announced in February 1997 it was selling
its poorly performing credit card and satellite dish receivables totaling
nearly $900 million.  To lower the risk profile, 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 charge-offs to average managed
receivables was 5.51% and delinquencies were 3.84%.  Net receivables were
$7.4 billion.
    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.
    AGC's overall operating performance is strong, supported by sound
capitalization, excellent asset quality, high liquidity, financial flexibility
and prudent management.  AGC continues to conservatively allocate capital to
its businesses and holds ample levels of high investment grade bonds and
performing mortgages, which fully support its insurance reserves.  AGC
consistently targets a minimum of 250% risk-based capital for insurance
subsidiaries and currently has approximately $610 million in excess of such
levels.  Strong liquidity and financial flexibility is evidenced by solid
pretax interest coverage of about 8 times (x) and total fixed charge coverage
of around 5x, which does not reflect the approximately $700 million of excess
dividend capacity from the operating companies.  Management's successful
track record of acquiring and assimilating businesses, coupled with the
broadened geographic presence in the Northeastern U.S. engendered by the
pending merger with USLife Corp., strongly suggests the transaction will add
value to the AGC franchise.

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