Enron Corp.’s shares continued spiraling down Monday on more bad news from credit ratings agencies.

Moody’s Investors Service, New York, lowered the long-term debt ratings of Enron Corp. from Baa1 to Baa2. Enron’s debt remains on the review list and could be downgraded further. The ratings agency first placed about $13 billion of Enron’s debt on review Oct. 16 when Enron disclosed a third quarter loss, a $1.2 billion write-down of shareholders equity, and a $1 billion write-down on impaired assets.

Moody’s said it downgraded the debt because of a “deterioration” in Enron’s financial flexibility. The loss of management credibility and investor confidence has led to the halving of Enron’s share price and difficulties in rolling over commercial paper, Moody’s said.

Enron reacted to problems in the commercial paper market by drawing down its entire revolving credit facility of $3.5 billion, according to published reports. Enron took those proceeds and paid off its outstanding commercial paper leaving it with about $1.2 billion in cash. The company told Moody’s it was arranging for another bank facility to back up its core trading operations.

Enron’s shares closed down 9.8% to $13.88/share Monday. Enron’s share price has fallen almost 60% in 2 weeks and more than 80% since late last year.

The ratings agency said it would monitor Enron’s progress in lining up additional liquidity and its ability to retain credit availability for its major trading counterparties. Moody’s also said it would review company plans to sell assets, especially the timing of those sales and the valuations of those assets on the sales block.

Finally, Moody’s said it will examine Enron’s off-balance sheet special transactions to determine the impact on the company’s equity or debt structure, if there are any shortfalls in these transactions.

Financial analysts have been critical of Enron’s refusal to release the financial details of a slew of off-balance sheet partnerships and trusts that have significant amounts of debt that might be contingent to Enron.

The first of the off-balance sheet transaction surfaced in the third quarter with a write-down of $1.2 billion in shareholder equity and other charges. Investors and the ratings agencies are concerned that more write-downs could be in the works, if other off-balance sheet transactions go sour, too.