S&P lowers Hayes Lemmerz

Standard & Poor's said it lowered the corporate credit rating on Hayes Lemmerz International Inc. to CC from CCC+, reflecting increased near-term prospects for either a distressed debt exchange or a bankruptcy filing.

The outlook is negative.

The downgrades follow Hayes's disclosure that it is in detailed discussions with its senior secured creditors, unsecured noteholders and other stakeholders regarding its strategic and financial planning processes, according to the agency.

"Although the company did not provide specific details, we interpret this to mean that Hayes will offer to exchange some or all of its debt for equity or new debt at a steep discount to face value," S&P analyst Gregg Lemos Stein said in a statement.

"Given Hayes's weak liquidity and financial risk profile, we would consider such an offer to be a distressed exchange and, as such, tantamount to a default. In our opinion, if the company were unable to complete an exchange offer, it could file for bankruptcy," he continued.

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