Article: Chevy Chase Junk Bonds Downgraded;Moody's Rating Service Cites S&L's Softening Real Estate Holdings

Chevy Chase Federal Savings Bank, Maryland's largest savings and loan, had its junk bonds downgraded by Moody's Investors Service to reflect the rating company's concern over the amount of troubled real estate loans on Chevy Chase's books.

"We believe there has been a significant deterioration in the asset quality of the thrift," Moody's analyst Blaine Frantz said yesterday. "The softening of the Washington metropolitan area real estate market has definitely impacted a number of institutions, Chevy Chase included."

Unlike many other local financial institutions, Chevy Chase had avoided a downgrading of its high-yield, high-risk junk bonds until this week. Perpetual Savings Bank, Sovran ...

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