Investors have been passing up Heller Financial Corp.'s bonds, but some analysts are telling them the time to buy is now.

"The CIT Group, Finova, and Heller are all strong companies," said finance company analyst Matthew Burnell of Merrill Lynch & Co. "But Heller offers more upside because of its year-over- year profits and strong credit quality."

Investors still are wary about the finance company because of its largest investor, Fuji Bank of Japan. Fuji Bank was the sole owner of Chicago-based Heller until last May, when it sold off 43% in a public offering.

Many investors remain uncomfortable with Fuji's ownership because of the bank's troubles with Japan's crumbling economy.

Investors fear that Fuji will respond to tough times by "sucking out capital through Heller's dividend program," said Winnie Cheng, a financial institutions analyst at BankAmerica Corp.'s NationsBank Montgomery Securities Inc. in Charlotte, N.C.

There is also fear that Fuji might push some of its bad loans onto Heller's balance sheet, Ms. Cheng said.

In the last week, Heller's securities have traded at wide spreads over treasuries, indicating that investors still are skittish about the company. But some bond analysts say the wariness about Heller's Japanese parent is overdone.

"The CIT Group also is owned by a Japanese company," Industrial Bank of Japan, "and it trades at better levels than Heller," said Ms. Cheng, who has been bullish on Heller bonds for the last year.

Ms. Cheng said she doubts Fuji would even consider tapping into Heller's dividends or downloading bad loans onto the finance company's balance sheet.

"Heller is a very small company," so its dividends would do little to help Fuji, Ms. Cheng said. And Fuji would face lawsuits from the other shareholders if it "tried to push bad loans onto Heller's balance sheet."

Bond analyst Brian Charles of Bank One Corp.'s First Chicago Capital Markets, agreed that Fuji would probably do nothing to harm Heller. "That would be like killing the goose who lays the golden eggs," he said.

Two weeks ago Heller reported its sixth year of record earnings. Fourth- quarter earnings were up 34% despite a $17 million pre-tax charge.

"They have streamlined their operations, worked on operating efficiency, and turned around their asset quality," said Mr. Charles. "They have done everything that they said they were going to do."

Still, anxieties about the company remain. Ratings agencies have cut Fuji's ratings, citing troubles in the Japanese economy, but have maintained Heller's ratings.

But don't expect an upgrade anytime soon, Mr. Charles said. "The rating agencies are waiting to see how the company performs during an economic downturn," he said.

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