Two rating agencies acted on First Interstate.

Duff & Phelps downgraded the Los Angeles banking company’s subordinated debt and preferred stock, while affirming the ratings of its senior debt, commercial paper and certificates of deposit. The agency said the ratings actions reflect the potential costs of First Interstate’s acquisition of Houston-based Allied Bancshares. A second ratings agency, Standard & Poor’s, said that about $1 billion of First Interstate’s debt remains on S&P; Creditwatch following its plan to establish a $500-million reserve against possible loan losses and a $250-million reserve to accelerate charge-offs on troubled real estate credits.