S&P cuts Tower, units to D

Standard & Poor's said it lowered its corporate credit rating and other debt ratings on Tower Automotive Inc. and related entities to D following Tower's announcement that it and certain subsidiaries have filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code.

S&P cut Tower Automotive Inc.'s corporate credit rating to D from CCC and senior unsecured debt to D from CC, R.J. Tower Corp.'s senior secured first-lien debt to D from CCC, second-lien debt to D from CC and senior unsecured debt to D from CC.

At the same time, S&P placed the recovery ratings on the senior secured bank facility on CreditWatch developing.

As with many auto suppliers, S&P said the operating performance and liquidity of Tower have been adversely affected by increased steel prices and lower production volumes by key customers, Ford Motor Co. (BBB-/stable/A-3) and General Motors Corp. (BBB-/stable/A-3).

S&P said Tower has a diversified customer base, strong expertise in complex metal structures design and manufacturing and a solid new business backlog. Given the importance of Tower to its customers, it is likely that it will be reorganized.

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