MOODY'S JOINS S&P IN DOWNGRADING FORD RATING

NEW YORK – Reuters reports that Moody's Investors Service on Thursday downgraded its debt ratings for Ford Motor Co., but in an unusual move did not also downgrade its ratings for Ford's finance arm, where most of the debt of the world's second largest automaker lies. They explained that the rating agency's one-notch long-term debt downgrade for Ford, which had $12.1 billion of debt as of Sept. 30, and its affirmation of its rating for Ford Motor Credit Co., which had $146.4 billion, came three days after Standard & Poor's on Monday cut all of its long-term debt ratings for both entities two notches each.

Moody's as well as S&P considered Fords $692 million net second quarter loss, and the rising competition and shrinking profit margins.

Reuters went on to report that Moody's action gave the Ford bonds a solid lift.

It "does surprise everyone, given what S&P did the other day," said John Cassady, who helps invest $3.5 billion for Fifth Third Investment Advisors in Grand Rapids,

Michigan. "We're disappointed that they downgraded Ford Motor, but we're pleased they kept the Ford Credit ratings unchanged," Reuters quoted Ford spokesman Todd Nissen. "It will help us keep our costs of borrowing down, which benefits Ford Credit and ultimately Ford Motor.

" S&P, in contrast, cut all of Ford's and Ford Credit's long-term ratings to "BBB-plus," roughly one notch below Moody's "A3" rating, and their short-term debt ratings to "A-2," one notch below Moody's "Prime-1" rating.

Its rating outlook is stable. It imposed similar cuts on No. 1 automaker General Motors Corp. and its finance arm. Yields on Ford's 6.875 percent notes due in 2006 and 7.375 percent notes due in 2011 shrank on Thursday 0.1 percentage points both before and after Moody's late afternoon action. They yield about 2.45 percentage points more than similar maturity U.S. Treasuries, or about 6.23 and 7.02 percent. Shares of Ford closed Thursday on the New York Stock Exchange at $16.77, down 36 cents. They have fallen 28 percent this year.