WASHINGTON - Glenfed Inc. is negotiating a deal to raise $350 million to $400 million in capital and avert government action against Glendale Federal Bank, according to Stephen J. Trafton, chairman and chief executive officer of both entities.

Mr. Trafton said regulators have told him they will extend a June 30 deadline for acting against the capital-short thrift if he can arrange a deal. He is racing to complete negotiations by mid-June.

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