Auto Parts Supplier Delphi (DPH) Likely "Junk"
Moody's may cut Delphi debt to 'junk' status (DPH)
By Tomi Kilgore
NEW YORK (MarketWatch) -- Moody's Investors Service said it was reviewing Delphi Corp.'s long- and short-term debt for possible downgrades due to the uncertainty created by the autoparts maker's announcement its uncovered $261 million in overstatements, which led to the resignation of its chief financial officer. A downgrade would lower Delphi's long-term debt, currently at the highest investment grade rating of "Baa3," to "junk" status. Delphi's short-term debt is currently at "Prime-3." "The review will focus on the ultimate impact of the internal investigation on Delphi's reported financial results and its ability to resolve the investigation in a timely manner," Moody's said. "The review will also consider the degree to which the company can address any reporting and control inadequacies, and remain in full compliance with regulatory requirements and its obligations under all borrowing and capital market transactions."
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