Billionaire activist Carl Icahn came under fire Tuesday after ratings agency Standard & Poor's downgraded his firm's credit rating to BB+ from BBB-, crossing the standard industry threshold between investment-grade and so-called junk-rated debt.

The agency primarily cited "weak" performance among securities held by Icahn Enterprises and a hike in the fund's loan-to-value forecast to 45%-65% over the next 12 months.

"While part of this increase in leverage has come as the portfolio (most notably CVR Energy(CVI) - Get Report , Federal Mogul (FDML) , and the investment segment) has deteriorated in value over the past year, it has also resulted from a substantial decrease in the amount of cash at Icahn Enterprises, "which we net against debt in our loan-to-value calculation," the report states.

CVR Energy and Federal Mogul shares are down 48.5% and 33%, respectively, over the past 12 months.

The ratings agency also notes that the downgraded rating is "stable," but highlighted concerns that Icahn is not expected to decrease his loan-to-value ratio in the near term and the fund's leverage tolerance remains "unclear."

Even if Icahn Enterprises completes any divestitures (such as Fontainebleu) or upstreams cash from portfolio companies (such as Pep Boys), we would not expect Icahn Enterprises to keep a meaningful amount of the proceeds in cash on a sustained basis, states the report. "Instead, we believe Icahn Enterprises would very likely redeploy proceeds into new or existing portfolio companies or contribute to the investment segment."