Fitch rates Financial Federal convert

Fitch Ratings said it expects to assign a BBB rating to Financial Federal Corp.'s offering of up to $125 million of senior convertible notes due 2034.

The outlook is positive.

Financial Federal is the parent company of Financial Federal Credit Inc., its primary operating subsidiary. Financial Federal Credit's senior unsecured debt is rated BBB by Fitch on Rating Outlook positive.

Fitch said it expects that up to $50 million of proceeds from the offering will be used to repurchase common stock. The remaining proceeds will be loaned to Financial Federal Credit to refinance existing debt.

Fitch said it anticipates that the stock repurchase will increase Financial Federal's consolidated leverage (defined as debt divided by equity) from 3.01 times at Jan. 31, 2004 to about 3.71x on a pro forma basis.

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