Moody's put the rating at "Baa1," down from "A3" previously, citing continued difficulties in Disney's financing of ABC Family, the cable network acquired from News Corp. (NWS) last year.

Disney's (DIS) difficulties with its ABC Television Network and its theme-park business also were cited by Moody's. The ratings agency, however, said the company's debt outlook is "stable" -- the first time that Moody's has given such a designation to Disney in more than a year.

"I think their plan and focus is achievable," said Glenn Eckert, Moody's vice president and senior analyst. "Obviously, the big concern is the external environment."

Lower debt ratings are likely to make it more costly for Disney to obtain debt financing.

Earlier this month, Standard & Poor's made a similar downgrade on Disney's debt.

With both Moody's latest move and S&P September downgrade, the rating left Disney's debt three notches above a "junk" rating.

S&P rated the company's outlook as "stable" as well, indicating any further downgrades aren't imminent.

And in August, Fitch Ratings made the same ratings cut, although it assigned a "negative" rating on the outlook for Disney. Fitch did credit Disney, however, for trying to improve its credit profile.

Moody's originally reduced Disney's credit rating from "A-2" to "A-3" in September 2001 in light of the company's ABC Family purchase, citing the financing of the $5.2 billion deal with debt.

A month later, Moody's gave Disney a "negative" outlook in the wake of the Sept. 11 terrorist attacks and the resulting impact on advertising and travel businesses.

Then in August, Moody's said it was reviewing Disney's debt for another possible downgrade.

In a statement, Disney said: "We have worked to reduce our leverage this year, and we are committed to further reductions. We see this rating action by Moody's as the result of short-term business conditions, and we remain optimistic about (our) prospects."

Disney is struggling to boost ratings for ABC, currently in fourth place among the broadcast networks. In his report, Moody's Eckert said he was encouraged by advance bookings for advertising spots prior to this fall season as well as spot-market purchases but is awaiting viewer ratings.

Meanwhile, theme parks remain hindered by the economic climate and concerns over air travel, according to Moody's.