Moody's may up Dana

Moody's Investors Service said it placed the ratings for Dana Corp. and Dana Credit Corp. on review for possible upgrade in response to the company's announcement that it has signed a definitive agreement to sell its automotive aftermarket business to The Cypress Group, a New York private equity firm, for about $1.1 billion in cash.

On review for an upgrade are Dana's Ba3 rated $400 million senior unsecured revolving credit facility due November 2005, approximately $2.2 billion of senior unsecured notes with various rates and maturities; and Dana Credit's medium-term notes with various rates and maturities, supported by Dana. Also on review are Dana's Ba3 senior implied and senior unsecured issuer ratings.

Moody's review of the appropriate degree of upward ratings movement will reflect an evaluation of the anticipated impact of the sale on Dana's ongoing operations and prospects, as well as a definitive determination of how the net proceeds from the sale will be applied. Dana has broadly indicated that the proceeds from the sale will be used for a combination of reinvestment in the company's core businesses, contribution to the company's pension plans, and reduction of Dana's debt.

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