Duff & Phelps Downgrades Glenfed Debt-Issue Ratings

Duff & Phelps, an investment research firm in Chicago, downgraded the ratings on several debt issues of Glenfed Inc., the Glendale-based savings and loan, and its subsidiary, Glendale Federal Bank.

Glenfed reported a loss of $140.8 million in its fiscal second quarter ended Dec. 31, due mainly to problems in its commercial real estate loan portfolio.

Duff & Phelps lowered the rating on $60 million worth of Glenfed’s subordinated debt from Triple-B-Minus to Double-B-Minus. Subordinated debt is payable only after other debts are paid. Duff & Phelps also downgraded subordinated debt of Glendale Federal Bank from Triple-B to Double-B-Plus. Duff & Phelps defines both Double-B-Plus and Double-B-Minus as “below investment grade but deemed likely to meet obligations when due.”

In addition, Duff & Phelps slightly downgraded Glendale Federal Bank’s long-term deposits to Triple-B-Minus. And the investment firm downgraded Glendale Federal Bank’s short-term certificates of deposit and commercial paper ratings from “good” to “satisfactory” grades. Duff & Phelps said the long-term deposits, certificates of deposit and commercial paper remain at investment grade levels.