NEW YORK, Feb 24 (Reuters) - Standard & Poor's on Friday lowered its ratings onCorp. deeper into junk status, citing reports that the auto parts supplier has hired a restructuring firm.
The Wall Street Journal reported on Friday thathas hired Miller Buckfire & Co. as the auto and truck parts maker grapples with financial losses and operational problems. The firm is considered among the top tier of restructuring specialists, along with operations like Blackstone Group.
Dana's 6.5 percent bond due 2009 dipped an additional two percentage points on Friday to 65.5 cents on the dollar, according to MarketAxess. The bond has plunged from 75.69 cents on Wednesday over concerns about the company's liquidity.
"If it appears that there has been an adverse shift in management's financial strategies, specifically that they entail a financial restructuring, the ratings could be lowered further despite the company's seemingly adequate near-term liquidity," S&P said in a statement.
S&P cut Dana's corporate credit rating three notches to "CCC-plus," seven levels below investment grade, from "B-plus," and lowered its senior unsecured debt three notches to "CCC-minus," nine levels below investment grade.
The outlook is "developing," meaning the ratings may be raised, lowered or affirmed. Dana could be upgraded to the "B" category if the supplier completes its new bank deal and its near-term operating prospects "appear reasonable," S&P said.