Depending on who you are, the latest chapter of the Utah-McDonnell Douglas Corp. story is either good news or bad news.

Utah is one of six states the aerospace giant is considering to produce the MD-12X, McDonnell Douglas' answer to the Boeing 747. The new plane is designed to carry 375 passengers, compared with the 421 passengers carried by the 747.The company also is considering whether to relocate its Douglas Aircraft operations in Long Beach to a state that offers more incentives. In addition to Utah, other states courting the McDonnell Douglas program are Missouri, Kansas, Oklahoma, Texas and Louisiana.

McDonnell Douglas employs about 620 people at its Salt Lake plant, which makes the lower fuselage and floors for the MD-80 aircraft, a narrow-body commercial jet.

The troubling news is, less than two weeks after the Utah Legislature agreed to lend McDonnell Douglas Corp. $9 million plus interest to expand its Utah operations, Standard & Poor's Corp. downgraded the aerospace giant's debt.

Debt downgrades make it more difficult and expensive for a company to borrow money. The downgrade by S&P drops McDonnell Douglas' debt to two notches above speculative grade.

John Clark, counsel to attorney general Paul Van Dam, said the downgrade could affect negotiations on the loan arrangement.

"As the lawyers in this deal we're always concerned. Our job is to make sure legally this agreement is as fair to the state of Utah and as safe as possible. Everyone involved in the negotiation is well aware this is an investment. There is some risk . . . "

The rating stirred concern among legislators who opposed the loan. Said Minority Leader Frank Pignanelli, D-Salt Lake: "McDonnell Douglas told us `We need the cash right now.' With this recent event you can see why, because they can't get a loan from a bank."

Under a proposed loan agreement, McDonnell Douglas would not have to repay the loan if it brings in more than $600 million in new business over the next 10 years. The company also would earn credits for subcontracting with Utah companies.

Company officials insist the loan program is a good investment in the state economy. "It represents a very good investment for state of Utah because of the extra jobs it brings to Utah," said Don Hanson, spokesman for McDonnell Douglas' Long Beach plant.

Francine Giani, the governor's press secretary, said when the governor heard the news "his (Gov. Norm Bangerter's) comment was `They don't have the check yet.' "

Still, Giani said the executive office is interested in making the McDonnell Douglas agreement work for Utah.