Motorola Credit Rating Cut 2 Levels by Moody’s

Motorola Inc.’s credit rating was cut two levels by Moody’s Investors Service because of slack demand for communications equipment from the second-largest mobile phone maker.

Motorola, which posted its fifth straight losing quarter, was lowered to two levels above junk at Baa2 with a negative outlook, meaning the rating will probably be lowered rather than raised. The cut follows a similar action by Standard & Poor’s.

A further one-level downgrade would trigger clauses in two bank agreements that would require Motorola to provide collateral on one credit facility and may force repayment of a bank credit line.

Shares of Schaumburg, Ill.-based Motorola fell 14 cents to $14.28 on the New York Stock Exchange.