CSK Auto Corp. (NYSE: CAO) shares are plummeting after the auto parts retailer disclosed in a regulatory filing that it is seeking an amendment to its credit agreement in order to minimize the possibility it won’t be able to comply with its current credit agreement.

The Phoenix, Ariz.-based company is attempting to lower its fiscal 2008 fixed charge coverage ratio — a proportion that indicates a firm’s ability to meet its financing expenses such as leases and interest — to a range of 1.15 to 1.25, from a current 1.40.

CSK Auto also wants to change its fiscal 2008 leverage ratio — a measurement used to estimate a company’s ability to meet financial obligations — to a range of 4.50 to 6, from its current range of 3.25 to 4.

The company previously disclosed that its second-quarter net sales decreased compared to a year earlier. CSK said it anticipates that its auto segment will not be in compliance with its current credit agreement at the end of the fourth quarter. Although the firm said it expects the auto segment to be able to obtain an amendment to its credit agreement, CSK said “no assurance can be given that the company will be successful in doing so or at what price such amendment can be obtained.”

CSK expects to file its quarterly report on or before Dec. 19.

Cid Wilson, a senior analyst for research firm Kevin Dann & Partners LLC, lowered his rating on the company to “hold” from “buy” with a 12-month price target of $10.

“It appears hitting targets on debt covenants continues to challenge the company,” Wilson said. “The concern here is that the new covenants brings to question what the cash flow situation is.”

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