SCHAUMBURG, Ill. -- Motor Coach Industries has announced a big jump in first-quarter coach deliveries.

The sales announcement came just days after Standard & Poors lowered MCIs credit rating.

MCI said it delivered more than 300 coaches, both new and used, during this years first quarter, an increase of 17 percent over the first quarter of 2007.

MCI attributed "the strong first-quarter sales surge" to a variety of factors, including customers "experiencing increased demand for motorcoach travel in key markets and taking advantage of current economic stimulus programs such as bonus depreciation."

Larry Killingsworth, MCI vice president of sales, said the results "can also be attributed to our advance engineering work and testing done to ensure that the EPA-compliant 2007 engines performed for our customers in all market segments.

"And, operators tell us they are experiencing ridership increases, especially as the rising cost of gas influences commuters and travelers to seek more affordable modes of transportation. Some operators have also said they plan to take advantage of bonus depreciation offered this year," Killingsworth noted.

Another contributing factor, cited by MCI, was its customer support efforts.

Although it was not mentioned by MCI, the company also ran aggressive inventory clearance sales during the quarter, as well as promoting the ready availability of in-stock new coaches.

Mitch Guralnick, head of pre-owned coach sales at MCI, noted there was "a significant rise" in pre-owned coach sales during the first quarter. "The same increase in customer demand for new coaches is being seen across all spectrums of the industry," said Guralnick.

The economic stimulus program cited by MCI was passed by Congress and signed into law by President Bush in mid-February. It includes business tax incentives for buying new equipment, including a one-time depreciation tax deduction equal to 50 percent of the cost of specific kinds of new investment during this year.

Qualifying investments include tangible property, such as business equipment. The law also raises the limits on the value of new productive capital (machinery, equipment and some other types of property) that businesses may exclude from their income as business expenses during 2008.

Previously, the limit on expensable productive capital investments had been $128,000, reduced (but not below zero) by the amount by which the value of those investments exceeded $510,000. The law raises those limits to $250,000 and $800,000 respectively.

Meanwhile, Standard & Poor's Ratings Services reduced MCI debt ratings, including the corporate credit rating, to "CCC-" from "CCC," based on the companys performance and ongoing worries over the its ability to make debt payments and refinance its debt. S&P also said MCIs outlook was negative.

That MCIs credit rating would be lowered at a time when the economy is souring and the financial markets are in the midst of a credit crunch seemed almost a certainty.

The company has long carried a busload of debt, totaling $570 million at the end of last year, but its owners, JLL Partners, a New York-based private equity investment firm, have for nine years supported MCI and its heavy debt load.

Still, the latest rating action by S&P, and by Moodys earlier, "reflects continued weak operating results and increased concern over the companys ability to make debt service payments and to refinance credit facilities maturing in December," said S&P.

MCI declined to comment on S&Ps action.