Moody's Cuts Visteon On 'going Concern' Warning

NEW YORK (AP) — Moody's Investors Service on Thursday downgraded its ratings on Visteon Corp., citing the auto parts supplier's weakening financial condition and the broader troubles facing the auto industry.

The credit ratings agency downgraded several ratings on Visteon, including its probability of default rating, which it cut two notches to "Caa3" from "Caa1." Moody's also lowered Visteon's corporate family rating two notches to "Ca" from "Caa2." All of the ratings are non-investment grade.

Moody's said the new ratings reflect both its weakening credit profile and its recent disclosure that it expects a "going concern" notice from its auditors. The notice will reflect the auditors' doubt over the company's ability to continue its business operations.

Earlier this month, Visteon narrowly escaped a default after making a $16 million payment on outstanding bonds. The New York Stock Exchange recently said it was delisting shares of the parts supplier by March 30 due to its low selling price. The stock currently trades below 2 cents a share.

Visteon, which makes electronic, lighting and numerous other parts for automakers, is formerly owned by Ford Motor Co. It and other parts suppliers have been battered by the downturn in new car sales as automakers slash production and idle factories.

Last week, the Obama administration announced plans to provide $5 billion in aid to parts suppliers to help them weather the downturn and prevent a bankruptcy that could disrupt the supply chain.