S&P downgraded Renault to 'BB+/B' from 'BBB-/A-3', meaning it had ascribed a "junk bond" status to those Renault corporate bonds.
"French automaker Renault has an ample liquidity cushion and can, in our view, count on guarantees from the French state," S&P wrote in a research note.
"We nevertheless expect Renault's earnings, free cash flow generation (FOCF), and financial position to weaken materially in 2020, following an already challenging 2019," added S&P.
S&P kept a BBB- rating on Peugeot-company PSA, but it cut its outlook on PSA to "negative" from "stable".
Shares in Renault and PSA were both down by around 1% in late session trading.
Data earlier this month showed that French car registrations had dropped by more than 72% in March due to the coronavirus outbreak and lockdown ordered by authorities to fight the epidemic spread.
(Reporting by Sudip Kar-Gupta; Editing by Steve Orlofsky)
By Sudip Kar-Gupta