Bondholders of ABB, the Swiss engineering company, have suffered another blow after the company's credit rating was downgraded further into junk territory by Moody's Investors Service, the rating agency.

Moody's cut ABB by two notches to B1 from Ba2 late on Friday, and maintained a negative outlook on the rating, prompting fears of further downgrades for the Swiss company, which has been under pressure to reduce debt and improve its business in 2002.