Troubled CalFed Inc.
Troubled CalFed Inc. suffered another blow as its senior debt was downgraded by Moody's Investors Service Inc.
Moody's was reacting to an order the California thrift company recently received from the Office of Thrift Supervision to increase capital by $375 million by June. CalFed is expected to have trouble raising the money from investors.
The OTS is trying to attract a buyer for the thrift before it becomes insolvent. A buyout, however, might pay off bondholders.
The thrift's debt was downgraded to B3 from B2, and its subordinated debt to Ca from Caa. About $200 million of debt is affected.
Separately, Norwest Corp.'s Norwest Financial Inc. issued $150 million of 7.10% notes, due Nov. 15, 1996. The underwriter was Merrill Lynch Capital Markets. Early this month, the Minneapolis bank completed the sale of an offering of convertible preferred stock.