NEW YORK (AP) — Moody's Investors Services on Thursday downgraded Lear Corp.'s default rating a day after the automotive parts supplier said it is preparing to file for Chapter 11 bankruptcy protection.
Moody's lowered the rating to "D'' from "Ca."
Lear, based in Southfield, Mich., said it is planning to file for Chapter 11 bankruptcy protection and has lined up financing to fund its operations while under court protection.
The company is still negotiating with lenders and bondholders for additional support for its restructuring plan. In the meantime, the company said it has a commitment for $500 million in loans to finance its bankruptcy from a group of lenders led by J.P. Morgan and Citigroup.
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Despite the negative rating action, Moody's backed ratings on Lear's senior secured term loan and unsecured notes.
In June, Moody's lowered Lear's ratings on a missed interest payment of $38 million on its senior notes due in 2013 and in 2016.
The ratings agency said it will withdraw its ratings once the company files for Chapter 11.
Shares of Lear fell 12 cents, or 25.9 percent, to 36 cents in afternoon trading.