UPDATE 1-American Axle amends credit agreement, shares fall

* Waiver of financial covenants through July 30

* Bankruptcy risk remains high-analyst

* Shares fall as much as 32 pct
(Adds comments from company, analyst, share price, byline)

By Soyoung Kim

DETROIT, July 7 (Reuters) - American Axle & Manufacturing
Holdings Inc (AXL.N) amended a credit agreement on Tuesday but
shares of the auto parts supplier fell more than 30 percent as
investors worried about a continued risk of bankruptcy.

American Axle, like other U.S. auto parts suppliers, has
been hit hard by extensive production shutdowns at General
Motors Corp GMGMQ.PK and Chrysler, along with the worst U.S.
auto sales environment in nearly three decades.

American Axle said the new credit agreement provides a
waiver of the financial covenants under its revolving credit
facility through July 30 and the company remained in talks with
lenders to further modify the credit facility.

JPMorgan analyst Himanshu Patel said he continued to see a
greater than 50 percent likelihood of a bankruptcy filing by
the company after the waiver expires.

"American Axle suggests the waiver is a positive step
toward a more permanent solution, but we worry that if American
Axle were going to achieve meaningful medium-term covenant
relief, its lenders would likely have not merely granted a
wavier," Patel said in a research note.

American Axle spokesman Chris Son said the company remains
focused on a comprehensive restructuring but would not comment
on speculation.

Shares of the company were down 45 cents or 16 percent at
$2.39 on the New York Stock Exchange on Tuesday afternoon, off
an earlier low at $1.92.

During the waiver period, the company is required to
maintain a daily minimum liquidity of $100 million, it said.

As of June 30, American Axle had about $280 million of
liquidity, consisting of available cash, short-term investments
and committed borrowing capacity on its credit facility.

U.S. auto parts maker Lear Corp filed for Chapter 11
bankruptcy protection on Tuesday, the largest in a string of
recent failures of auto parts suppliers and highlighting the
pressure on the sector from sharply curtailed production and
bankruptcies at GM and Chrysler.
(Reporting by Soyoung Kim, editing by Matt Daily and Matthew
Lewis)