The rating agencies took the following actions last week:

BayBanks Inc.: Moody's Investors Service Inc. said it may upgrade the Boston-based company's Ba1 senior debt rating to investment grade: "The review was prompted by the company's continued progress in reducing nonperforming assets, as well as its improvement in core earnings and capital adequacy."

Dai-Ichi Kangyo Bank: Moody's said it is reviewing for possible downgrade the Aa3 senior debt rating of this Japanese bank, the world's largest. It cited troubled real estate loans and historically poor profitability.

First Interstate Bancorp: Thomson BankWatch upgraded senior debt to A-plus from A, subordinated debt to A from Aminus, and preferred stock to Aminus from BBB-plus. It cited strong capital and reserves, improved asset quality and core earnings, and lower debt.

Michigan National Corp.:

Standard & Poor's Corp. downgraded Michigan National Corp.'s subordinated debt to BB-plus from BBB-minus and commercial paper to A3 from A2. Michigan National Bank's senior debt was cut to BBB from BBB-plus.

The agency said the downsgrades reflect the company's poor operating performance over the past two years. "Earnings remain under pressure from sustained high levels of problem assets, which have impaired Michigan National's competitive position," the agency said.

PNC Funding Corp.: Thomson BankWatch affirmed subordinated debt issued by this unit of PNC Bank Corp. at A-plus.

Royal Bank of Canada: Moody's confirmed senior debt at Aa2 and subordinated debt at Aa3. It said the confirmation reflects the conclusion that the recent purchase of Royal Trust Corp. of Canada will not increase the bank's risk profile over the long term. Royal Trust's senior debt was raised to Aa2 from Ba1.

Sakura Bank: Moody's said it may downgrade A1 senior debt, A2 subordinated debt, and A3 preferred stock ratings of this Japanese bank: Sakura "has a relatively high level of reported nonperformers in relation to its capital, and this figure doesn't include restructured loans on which interest rate concessions have been granted."

Shawmut National Corp.: Moody's said it may upgrade Baa3 senior debt, Ba1 subordinated debt, Ba3 noncumulative preferred stock, and Prime-3 commercial paper: "This review was prompted by the company's continued progress in reducing problem assets and in improving capital adequacy."

U.S. National Bank of Oregon: Fitch Investors Service Inc. upgraded the bank's 7.75% subordinated capital notes, due 2002, to A from A-minus. Fitch cited improving asset quality and strong capital at the bank's parent, U.S. Bancorp. "Factors which may impede further improvements in the company's rating include below-average operating efficiency, which has restrained profitability net of nonrecurring income items," Fitch said.

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