Nov. 13--Standard and Poor's downgraded the credit ratings of two auto suppliers and said several other suppliers that have significant business with the domestic automakers, face lower credit ratings.

The ratings are important because they indicate how likely a company is to pay down its loans. The ratings moves come at a time when loans tend to go to the strongest companies.

S&P downgraded axle maker Dana Holding Corp. a notch further into junk territory and Magna was downgraded one notch to A-, which is just above junk status, but still considered strong.

Dana, which emerged from Chapter 11 bankruptcy protection earlier this year, expects to violate its loan covenants before the end of the year and is in talks with its lenders for more flexible rules.

Both downgrades come with negative implications, indicating that the companies' credit ratings could be downgraded again.

Meanwhile, S&P said it is considering downgrades for 13 other suppliers, including Lear Corp., Visteon Corp., ArvinMeritor Inc. BorgWarner Inc. and Tenneco Inc.

These companies join American Axle & Manufacturing Inc. and TRW Automotive Inc. for a possible downgrade.

In a report, S&P said the moves "reflect the increasingly beleaguered state of the Michigan-based automakers and the multiple scenarios -- almost all of them negative -- that could play out over the next few weeks or months.

Contact JEWEL GOPWANI at 313-223-4550 or jgopwani@freepress.com.

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