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GLENDALE FEDERAL BANK COMMENCES EXCHANGE OFFER FOR GLENFED DEBENTURES

 GLENDALE, Calif., July 8 /PRNewswire/ -- Glendale Federal Bank today announced that it has commenced an exchange offer for the 7.75 percent Convertible Subordinated Debentures Due 2001 of GLENFED Inc. (NYSE: GLN), its parent corporation. Glendale Federal Bank is offering to exchange for each $1,000 in principal amount of the GLENFED debentures 49 shares of common stock of the bank, 16.68 rights to purchase additional shares of the bank's common stock in the proposed rights offering previously announced by the bank and $77.50 in cash, representing the installment of interest on the GLENFED debentures that was due on March 15, 1993, but not paid by GLENFED.
 Under the terms of the offer, the bank would exchange an aggregate of approximately 2.9 million shares of bank common stock and 1 million stock purchase rights for the $59.9 million in aggregate principal amount of outstanding GLENFED debentures, and pay the approximately $4.6 million in accrued and unpaid interest on the debentures through March 15, 1993.
 The exchange offer will expire at midnight, New York time, on Wednesday, Aug. 4, 1993, unless extended by the bank. Debentureholders will have the right to withdraw tendered debentures at any time prior to expiration of the exchange offer or, unless previously accepted, after Sept. 1, 1993.
 Commented Stephen J. Trafton, chairman and chief executive officer, "The exchange offer is one of the key elements of the proposed recapitalization of the bank that we recently announced. The exchange offer will permit us to resolve the default that currently exists on our parent company's debentures in order to clear the way for completing the recapitalization."
 The exchange offer is subject to the condition that at least 90 percent in aggregate principal amount of the outstanding GLENFED debentures must be tendered and accepted in the exchange offer. The proposed recapitalization contemplates, in addition to the exchange offer, the merger of GLENFED into a subsidiary of Glendale Federal Bank, the reclassification of two classes of outstanding preferred stock of the bank into a new class of convertible preferred stock of the bank, an offering of $125 million of additional convertible preferred stock of the bank, and a $250 million to $300 million rights offering of common stock of the bank. The rights offering would be backed by $250 million of standby purchase commitments from institutional and other investors, with $150 million of that amount guaranteed to the standby investors. A further condition of the exchange offer is that the purchase of the $125 million of additional convertible preferred stock and of the $150 million guaranteed portion of the standby purchase commitments would be completed prior to or concurrently with completion of the merger, the exchange offer and the preferred stock reclassification.
 Trafton added, "We are particularly pleased that, even before formal commencement of the exchange offer, we have been advised by Cary J. Stanford of Houlihan Lokey Howard & Zukin Inc., the Los Angeles- based financial advisers to an informal steering committee of GLENFED debentureholders, that holders of 56 percent in aggregate principal amount of the outstanding debentures have indicated they intend to tender their debentures in the exchange offer."
 Concurrent with the exchange offer, the bank is also soliciting from debentureholders consents to certain amendments to the indenture under which the debentures were issued and certain waivers. The debenture amendments will eliminate the right of debentureholders to accelerate the maturity of the GLENFED debentures immediately upon the occurrence of certain events of default; increase the percentages of debentureholders required to institute certain proceedings under the indenture; modify or delete certain provisions of the indenture, including provisions that may restrict the ability of GLENFED to effect the Merger; and amend the provision of the indenture relating to the conversion of GLENFED debentures into shares of GLENFED common stock so that, after the Merger, GLENFED debentures will be convertible solely into shares of bank common stock.
 The debenture waivers include, among others, waiver of all existing defaults under the indenture.
 For information regarding the exchange offer, including copies of the offering circular/consent solicitation and the related letter of transmittal and consent, debentureholders may contact the bank's Exchange Agent, Chemical Bank, at 800-648-8169 on weekdays between the hours of 9 a.m. and 5 p.m. EDT; the Dealer Manager for the exchange offer, The First Boston Corp., Joseph D. Carrabino Jr. at 212-909-3742; or the investor relations department of the bank at 818-500-2824 on weekdays between 8:30 a.m. and 5 p.m. PDT.
 -0- 7/8/93
 /CONTACT: Judy Cunningham, 818-500-2274, or Jeff Misakian, 818-500-2824, both of Glendale Federal Bank/
 (GLN)


CO: Glendale Federal Bank; GLENFED Inc. ST: California IN: FIN SU:

JL-MF -- LA035 -- 9737 07/08/93 20:23 EDT
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Date:Jul 8, 1993
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