International credit-rating agency Moody's Investors Service has cut its rating for ASAT Holdings - a 43.05 per cent owned unit of QPL International - by two notches on concerns about the company's deteriorating cash flow. Moody's trimmed ASAT's senior implied rating and its US$100.75 million 2006 guaranteed senior notes to B3 from B1. The credit-rating agency also downgraded ASAT's issuer rating to Caa1 from B2, representing the increased risks in investing in ASAT's debts. Moody's cited the continued weakness in the technology sector and its impact on ASAT's operating cash flow, the length of time needed to execute its corporate strategy, and the high leverage and diminished liquidity of the company. ASAT is Nasdaq-listed and engaged in semiconductor assembly, package design and testing. 'The rating action reflects the company's poor operating performance over an extended period of time, with little sign yet of recovery,' Moody's said. Since its listing in July 2000, ASAT has announced eight consecutive quarters of losses. Three weeks ago, ASAT announced a US$71.98 million net loss for the nine months to January 31. 'Although ASAT has not taken on further debt since 2000, its weak financial performance has increased the burden of the reduced amount of debt relative to the company's ability to service it,' Moody's said. With a US$29.4 million cash balance, analysts believe the company does not face an immediate cash crisis. But Credit Lyonnais Securities analyst Kenny Lau sees the losses continuing for a few quarters. He expects ASAT's net loss for the year ending April 30 to reach US$78 million.