S&P downgrades Ford

Standard & Poor's said it lowered the corporate credit rating on Ford Motor Co. to SD.

The agency said it considers the completion of the company's tender offers to be distressed exchanges and are tantamount to defaults.

The agency said it expects to assign a new corporate credit rating on Ford by mid-April.

"The tender offers will reduce debt and lower interest costs, and Ford has stated that annual interest savings will be more than $500 million," S&P analyst Robert Schulz said in a statement.

"However, even with this debt reduction, our preliminary expectation is that the new corporate credit rating

will likely not be higher than the CCC category initially because we believe Ford's fundamental business risks remain unchanged for at least the rest of 2009 and perhaps longer: most notably, deteriorating vehicle demand globally and the substantial execution risk of the ongoing restructuring," he continued.

The counterparty credit ratings on Ford Credit (CCC+/negative) and FCE Bank plc (B-/negative) remain unchanged.

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