Two New York-based credit-rating companies, Moody's Investor Service and Fitch Investors Service, have downgraded American Stores' short- and long-term debt and preferred stock.

A third company, New York-based Standard & Poors Co. is in the process of reviewing Salt Lake-based American Stores' paper.Frank Defillippis, an analyst with Standard & Poors, said the company put American Stores on its credit watch several weeks ago when it announced it would attempt to acquire Lucky Stores Inc.

Moody's said the $65-a-share or $2.5 billion American agreed to pay for Lucky's stock will increase the company's financial leverage significantly and will likely do so for several years.

Moody's lowered the Industrial Development Revenue bonds or long-term debt rating to Ba1 from Baa2 and lowered the preferred stock rating to Ba2 from Baa3.

Moody's also downgraded American Stores' subsidiary Jewel Companies Inc.'s notes to Ba1 from Baa2.

A Moody's spokesman said the company's rating puts those American Stores securities in the speculative category.

Fitch's downgraded American Stores commercial paper, which is short-term debt, to F-3+ from F-1. The highest rating the company gives is F1+.

"The movement from F-1 to F-3+ is significant but it reflects the increased leveraged for American Stores' acquisition," said Dana L. Bandley, a Fitch analyst.

"And what it may - and I emphasize may - increase is the cost of short-term debt. But we're basically confident in the company's ability to work their leverage numbers down."

A credit rating is just one of the many factors which influence market forces to raise or lower interest rates on certain securities.