Ford Bonds Fall on Credit-Rating Worries

Ford Motor Co. bonds plunged, raising concern that the second-biggest U.S. debt issuer may have its credit ratings cut amid slowing economic growth and greater competition.

Ford’s 7.25% coupon notes maturing in 2011 dropped as low as $916 per $1,000 of face value from $944, pushing up the yield to 8.59% from 8.13%.

Ford is rated Baa1 at Moody’s Investors Service and BBB-plus at Standard & Poor’s Corp.

Both ratings firms have a negative outlook on the credit, meaning they are more likely to cut the ratings than raise them. The current ratings are three levels above junk.