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HELLER FINANCIAL, INC. CP RATED 'F-1', IMPLIED SR. 'A' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Oct. 29 /PRNewswire/ -- Heller Financial, Inc.'s commercial paper is rated 'F-1' by Fitch. In addition, the company is assigned an 'A' implied senior debt rating. The credit trend is improving. This is the first time Fitch has rated Heller Financial's debt.
 The ratings reflect a combination of Heller's improving credit fundamentals, and strong and formalized support by Heller's parent, The Fuji Bank, Ltd. Concerns focus on Heller's historically low earnings relative to its risk profile and the ultimate success of new business initiatives.
 Heller is a wholly owned subsidiary of Fuji, Japan's second largest bank with assets equivalent to $477 billion and equity of nearly $20 billion. Although Heller is a relatively small component of Fuji, the U.S. finance company is important to Fuji's overall U.S. strategy. While Heller can support debt independently, the contingent support of the parent company enhances Heller's ratings and results in some ratings linkage. However, near-term changes in Fuji's performance will not necessarily affect Heller's credit rating, given the company's improving trend. Despite substantial loan quality pressures in Japan, Fuji's underlying credit quality remains solid.
 Heller, a commercial finance company, is working to diversify its risk profile by entering new businesses and revising underwriting criteria in existing businesses. The company historically has derived the majority of its assets and earnings from its two largest businesses, corporate finance and commercial real estate. With the downturn in both of these sectors, Heller suffered significant asset quality deterioration resulting in weak corporate earnings. In the mid-1980s, Heller embarked on a small scale effort to diversify its risk profile, striving to insulate the company from downturns in any one particular business line. During 1992, the company intensified its diversification efforts to achieve a five-year goal of having no business line contribute more than 20 percent to corporate earnings.
 In addition to entering new businesses, Heller has been working to improve the quality of its existing business lines by targeting smaller account concentrations and lending at lower debt multiples. Asset quality, while still weak, is improving in absolute dollar and percentage terms, but more importantly, in the quality of new business written. At June 30, 1993, nonperforming assets (non-earning, repossessed, delinquencies, and troubled debt restructurings) equaled 10.3 percent of receivables plus repossessed assets. While this figure is high relative to other commercial finance companies, all of the loans on nonperforming status were originated before 1991. Net chargeoffs, which peaked at 3.1 percent for 1991, are trending lower and totaled 2.4 percent for the six months ended June 30, 1993.
 The high level of nonperforming assets and chargeoffs has hit earnings hard with return on assets (before accounting changes) below 0.85 percent for 1991 and 1992. These figures include the use of net operating loss carryforwards that resulted in unusually low tax provisions. Earnings, though improved for the six months ended June 30, 1993 with an annualized ROA of 1.55 percent, will remain under pressure as Heller continues to work through its portfolio of nonperforming assets and the company becomes a full tax payer in 1994.
 Heller's leverage position improved during recent years with debt- to-equity equal to 5.2 times (x) at June 30, 1993. The company enhanced its liquidity position by reducing its dependance on short-term funding. Commercial paper, at 35 percent of total debt at June 30, 1993, represents a dramatic improvement from 86 percent at year-end 1987. Backup facilities cover 144 percent of outstanding commercial paper.
 -0- 10/29/93
 /CONTACT: Helene L. Moehlman, CFA, 212-908-0606, or Ricardo J. Kleinbaum, 212-908-0525, or Nancy E. Stroker, CFA, 212-908-0533, all of Fitch/


CO: Heller Financial, Inc. ST: IN: FIN SU: RTG

MP -- NY071 -- 8595 10/29/93 14:48 EDT
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Date:Oct 29, 1993
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