Foothill Ties Expected Loss to Junk Bonds

Foothill Group said it expects to report a second-quarter loss of between $3.8 million and $4.3 million because it wrote down its investment portfolio to reflect falling values for its junk-bond holdings.

Foothill, a financial services concern with executive offices in Agoura Hills and Los Angeles, said the writedown would result in an after-tax charge of about $5.4 million in the quarter ended June 30.

In the second quarter of 1989, Foothill had a profit of $3.24 million.

The writedown was needed “due to the continuing price erosion” in the market for junk bonds, Foothill said, referring to the high-yield, high-risk debt securities that have fallen out of favor with investors over the past year.