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The No. 3 bond rating service, Fitch, on Thursday downgraded the long-term debt of



to its second-lowest investment grade. Fitch nevertheless said it was unlikely it would cut the automaker's debt to junk anytime this year.

In a move similar to that of Moody's last week, Fitch cut both Ford and its credit arm to triple-B from triple-B-plus, with a negative outlook. Fitch's junk ratings start at double-B.

"The downgrade reflects the impact of sales declines in key product categories, relentless price and product competition and higher commodity prices on Ford's automotive operating profitability," the agency said.

Like Moody's but unlike Standard & Poor's, Fitch kept Ford at an investment-grade rating, saying the company's liquidity remains very healthy and could be enhanced if it sold its Hertz rental car unit. S&P cut Ford and

General Motors


to junk on May 5.

Ford's cash resources "provide more than sufficient resources to reinvest in its auto operations and absorb costs related to the pending


restructuring. Fitch views it as unlikely that Ford would be downgraded to non-investment-grade in 2005," the agency said.

Ford's stock was recently up a nickel to $9.97.

Thursday's rating move is significant to Ford because of a vagary related to a bond market benchmark. Lehman Brothers is in the process of adding Fitch's ratings to Moody's, and S&P is determining whether corporate debt belongs in its investment-grade or junk indices. Since Ford's debt remains above junk at two of the three main ratings houses, it would currently qualify for the investment-grade index when Fitch's ratings are added in early July.