Moody's lowers Dana loan to Ca

Moody's Investors Service said it lowered Dana Holding Corp.'s probability-of-default rating to Ca from Caa1 and its $1.26 billion senior secured term loan to Ca (LGD4, 60%) from B3 (LGD3, 33%) and affirmed the speculative-grade liquidity rating at SGL-3.

Those ratings - along with the Caa1 corporate family rating and B2 (LGD3, 32%) $650 million senior secured asset-based revolving credit facility - remain on review for possible downgrade, where they were placed Dec. 28.

The rating actions follow the company's announcement that it is holding a Dutch auction tender offer to repurchase up to 10% of the outstanding $1.26 billion amount under its term loan facility at 40 to 44 cents on the dollar.

Moody's said the downgrade reflects its expectation that some of Dana's senior secured term loan lenders will accept the offer, which the agency considers to be a distressed exchange.

The SLG-3 rating reflect Moody's continuing expectation that the deterioration of industry conditions could result in negative free cash flow over the next 12 months, the agency said.

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