The rating agencies took the following actions last week:

Commerzbank: Moody's may downgrade the Aa1 senior debt rating of this German bank.

"The review will primarily focus on the effects of the current German recession on the bank's domestic asset quality as well as on the sustainability of current core earnings," Moody's said.

First Bank: Thomson BankWatch assigned TBW-1 short-term and A-plus subordinated debt ratings to this Minneapolis bank unit of First Bank System. The rating applies to a recent $100 million issue of 12-year subordinated notes.

BankWatch said the rating is a full notch higher than the subordinated debt rating of the holding company. It said First Bank provides the majority of income earned by the holding company.

A recent change in Minnesota law should enhance the bank's earning power. The change allows First Bank System to consolidate eight banks located outside of Minnesota into the Minneapolis unit.

Glendale Federal Bank: Standard & Poor's assigned a CCC rating to the thrift's $175 million issue of noncumulative convertible preferred stock.

"Ratings reflect the anticipated successful completion of a corporate restructuring plan that will raise $425 million in new equity for the savings bank and return the bank to regulatory capital compliance," Standard & Poor's said.

It added that the rating also reflect Glendale's high level of nonperforming assets.

Shawmut National Corp.: Fitch upgraded senior debt to BBB-minus from BB-plus, citing improving credit trends. Fitch said nonperforming assets declined $862 million in the 12 months ended June 30. lowering its nonperforming asset ratio to 3.84% from 10.35%.

Capital remains below peer levels. but improved during the past 18 months, Fitch said. High overhead is one concern. Another is the bank's increasing reliance on wholesale funding.

"While this practice is not uncommon, the extent to which Shawmut has inflated its balance sheet through such activity raises some concern, particularly when most regional banks are building capital and aggressively pursuing more stable core deposits." Fitch said.

Washington Mutual Savings Bank: Moody's upgraded long-term deposits to Baa1 from Baa2 and preferred stock to Baa3 from Ba1.

"The upgrades are based on [Washington Mutual's] demonstrated good profitability, strong capital and reserves, and good asset quality," Moody's said.

It added that the recent acquisition of Pacific First Federal Savigs Bank enhances Washington Mutual's consumer banking operations in Washington and Oregon.

Moody's said that an element of risk is an interest-fate mismatch related to the bank's strategy of retaining fixed-rate mortgages, its exposure to multifamily real estate, and the outlook for weaker economic growth in Washington.

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