Dynegy's ( DYN) chances of avoiding bankruptcy appear to be fading.

Following a downgrade by Moody's, Dynegy is now saddled with a C-level credit rating that warns of likely default. Moody's cited concerns about Dynegy's ability to refinance $1.6 billion of bank debt, maturing over the next six months, when it downgraded the company's credit late Monday. Although Dynegy's senior debt is still clinging to B-level junk ratings, the debt of its primary operating subsidiary has officially slipped to Caa2.

Even after the downgrades, the outlook for Dynegy's credit remains negative.

"The rating agency is telling us that the chance that Dynegy survives for another 12 months is relatively low," said Jon Cartwright, a senior bond analyst at Raymond James. "Unfortunately, we have to agree."

Dynegy's stock tumbled 7.9%, to $1.05 in Tuesday morning trading as investors reacted to the downgrade.

Calpine ( CPN), another junk-rated energy company, escaped a lighter downgrade unscathed. Fitch dropped Calpine's senior debt by a notch, from BB to B+, over worries about the company's high debt level and ongoing weaknesses in the power sector. But Fitch considers the outlook for Calpine stable.

The market shrugged off Fitch's downgrade, which mirrored similar action already taken by Standard & Poor's. The stock actually tacked on a slight gain Tuesday morning, climbing 2.1% to hit $3.44.

Cartwright said the market had good reason to react differently to the Calpine and Dynegy downgrades.

"The risk for Calpine is not as high as it is for Dynegy," he said. "Quite frankly, we think the risk is relatively low."

Cartwright has a buy recommendation on Calpine's bonds and an avoid recommendation on Dynegy's. He has no stake in either company.