Qwest

(Q)

got slapped with another downgrade Thursday after a credit rating agency warned of rising risks for bondholders who were pushed to the back of the IOU line.

Just a day after Qwest secured new terms from bankers on a key $3.4 billion loan, Moody's trimmed its rating on Qwest Communications International and Qwest Capital Funding bonds to Caa1 from B2.

Citing a roster of concerns from criminal and securities investigations to the pending sale of its lucrative directory business, the credit agency left the rest of Qwest's bonds at their current junk rating and reiterated its review for a downgrade Thursday, meaning it expects any future changes to be negative.

One of the terms of Qwest's loan renegotiation announced Wednesday was that bankers will receive the first $1.4 billion in proceeds from the two-part $7 billion sale of the QwestDex yellow page business.

As early as Wednesday, debt watchdogs like Gimme Credit's Carol Levenson had highlighted the new pecking order among Qwest creditors, which thrusts the 29-member banking syndicate ahead of some bondholders. One's place in line is key if Qwest goes into Chapter 11 restructuring and creditors seek paybacks for their investments. Typically, bondholders near the back of the line have less claim to debt settlements than their asset-secured counterparts.

"This leaves bondholders shouldering virtually all the remaining risk of a company with questionable accounting, SEC and criminal investigations, a dismal business outlook and not much more in the way of saleable assets," wrote Levenson in a Thursday morning report.

Qwest shares fell 10% to $3.25 on news of the Moody's report, giving back Wednesday's 10% gain from the post-bank-agreement

rally.