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Enron seeks more credit
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October 29, 2001: 3:06 p.m. ET
Energy company wants access to more cash as Moody's downgrades debt.
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NEW YORK (CNNmoney) - Enron Corp.'s stock continued to fall Monday as concerns about the energy trader's fiscal health continued and it tried to secure more credit.
Enron shares fell more than 9 percent in afternoon trading on the New York Stock Exchange, moving well below their 52-week low and close to seven-year lows.
A company spokeswoman confirmed Enron is in discussions with banks for access to additional funds, but declined to say how much.
Earlier in the day Moody's Investors Service downgraded the company's senior unsecured long-term debt to Baa2 from Baa1, two steps above junk status. Moody's said the company also will remain on review for downgrade.
Rating agency Standard & Poor's revised its outlook for Enron's ratings Thursday to "negative" from "stable."
Moody's said its actions were prompted "by the deterioration in Enron's financial flexibility since the company announced significant write-downs as well as equity charges in previously undisclosed partnership investments."
That write-down was the reason for Enron forcing out its chief financial officer Oct. 24 in the wake of a Securities and Exchange Commission investigation of the partnerships, which saw Enron take a $1.2 billion hit in company equity.
Moody's said in assessing Enron's debt rating it now will "focus on management's success in lining up further liquidity."
Although Enron won't say how much credit it is seeking, the Wall Street Journal reported Monday the company is looking for $1 billion to $2 billion.
On Oct. 26 the company tapped into about $3 billion in credit.
"Clearly, both the stock and bond market view Enron as being in dire straits," said independent research firm Gimme Credit analyst Carol Levenson, who specializes in high-grade corporate bonds.
"We are not of the opinion that drawing down all of one's backup bank lines is a demonstration of financial strength, but instead it's an act of desperation." 
-- from staff and wire reports
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