Moody's cuts Delphi debt to Ba2

Moody's Investors Service said it lowered the debt ratings of Delphi Corp., including the senior unsecured to Ba2 from Baa3 and short term to not-prime from prime-3.

Moody's also assigned a Ba2 senior implied rating and a Ba2 senior unsecured issuer rating to the company.

The rating downgrade reflects Moody's belief that because of the ongoing investigation of improper accounting practices at the company, heightened concerns over the adequacy of internal controls and significant changes in management occurring at a time when the company is facing greater competitive and business challenges.

Moody's said the ratings remain under review for possible further downgrade, pending the outcome of the internal investigation, understanding of the company's business outlook and financial strategy as the management leadership changes.

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