Duff and Phelps said it has downgradedfixed income securities of USX Corp and its subsidiaries and at
the same time took the issues off its watch list.
    The change affects about 6.6 billion dlrs in debt
securities.
    USX senior debt was lowered to DP-11 (high BB) from DP-9
middle BBB), Marathon oil senior debt to DP-11 from DP-9,
United States Steel senior debt to DP-11 from DP-9 and
subordinated debt to DP-13 (low BB) from DP-11, USX preferred
stock to DP-14 (high B) from DP-12 (middle BB) and preference
stock to DP-15 (middle B) from DP-13.
    The downgrades reflect substantial business risk and
increased financial risk, Duff and Phelps said.
    The steel industry remains intensely competitive and major
domestic integrated producers have lost share to imports and
minimills, D and P said. In oil and gas, profitability and cash
flows are larger, but there is still considerable volatility.
As for financial risk, USX has arranged to borrow 1 billion
dlrs through a production payment of its Marathon subsidiary.
Consequently a selected group of creditors has prior claim to
public debt holders for cash flows from this asset, D and P
said.
 Reuter
