California Federal Bank Announces Refinancing Plan.

SAN FRANCISCO--(BUSINESS WIRE)--July 2, 1998--California Federal Bank, A Federal Savings Bank ("Cal Fed") and its parent holding companies announced today plans to refinance Cal Fed's outstanding preferred stock as well as outstanding debt issued by its parent holding companies, First Nationwide Holdings Inc. ("FN Holdings") and First Nationwide (Parent) Holdings Inc. ("FN Parent").

Cal Fed and its holding companies expect to complete their previously announced merger with Glendale Federal Bank and Golden State Bancorp Inc. prior to September 30, 1998. The merger will be completed through the issuance of new shares of Golden State Bancorp common stock (NYSE: GSB) to the owners of FN Parent.

Pursuant to the refinancing plan, management currently intends to acquire the outstanding 11 1/2% Noncumulative Perpetual Preferred Stock, Series C, par value $100 per share, and 10 5/8% Noncumulative Perpetual Preferred Stock, Series B, par value $100 per share, of Cal Fed as well as to tender for the $200 million of the 12 1/4% Senior Notes Due 2001, $140 million of 9 1/8% Senior Subordinated Notes Due 2003 and $575 million of 10 5/8% Senior Subordinated Notes Due 2003 of FN Holdings. Management also intends to redeem the $455 million of 12 1/2% Senior Notes Due 2003 of FN Parent.

The refinancing plan will be funded with the proceeds of a new issue of notes (the "Notes") by GS Escrow Corp., an affiliate of FN Parent created for the sole purpose of issuing the Notes and holding the proceeds in escrow. Upon consummation of the merger with Golden State Bancorp and the refinancing transactions, the Notes will become obligations of the new holding company for the combined bank.

The offering of the Notes will not be registered under the Securities Act of 1933, as amended, and the Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

Cal Fed is a diversified financial services company whose principal business consists of (i) operating retail deposit branches to serve consumers in California and, to a lesser extent, in Nevada; (ii) originating and/or purchasing, on a nationwide basis, 1-4 unit residential loans and, to a lesser extent, certain commercial real estate and consumer loans, for investment; and (iii) conducting mortgage banking activities, including originating and servicing 1-4 unit residential loans for others. FN Parent is a holding company whose only significant asset is its ownership of 80% of the common stock of FN Holdings, and FN Holdings is a holding company whose only significant asset is its ownership of all of the common stock of Cal Fed.

Information in this Press Release includes forward looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, without limitation, the intention of FN Holdings and FN Parent to consummate the refinancing transactions and the offering of the Notes. All such forward looking statements involve risks and uncertainties. The following factors, among others, could cause actual results to differ materially from those expressed in the forward looking statements: difficulties or delays in consummating the sale of the Notes, the proceeds from which will be used to fund in part the refinancing transactions, as well as other difficulties in effecting the refinancing transactions and the Golden State merger.

    CONTACT:  California Federal Bank
               Chief Financial Officer
               Richard H. Terzian, 415/904-4661