Moody's lowers Dana

Moody's Investors Service said it lowered the ratings of Dana Corp., including the corporate family to Caa3 from B3, senior unsecured to Ca from Caa1, and Dana Credit Corp., including the senior unsecured to Ca from Caa1.

The downgrades reflect the company's announcement that it failed to make the March 1 interest payments on its 7% senior notes due March 1, 2029 and its 6-½% senior notes due March 1, 2009, the agency said.

The announcement dramatically heightens the potential for Dana's filing for Chapter 11 and casts greater doubt on the progress of the company's discussions to renegotiate its bank facilities, Moody's said.

The agency noted the negative outlook reflects the continuing uncertainty of Dana's ability to renegotiate its bank facilities, avoid a Chapter 11 filing and stem the erosion in its operating performance despite the possibility of lower production levels and continued price-downs by its domestic OEM customers.

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