Noting that the auction market’s downturn will probably last longer and be more severe than expected, Moody’s Investors Service has downgraded Sotheby’s debt securities.

The auction house’s corporate credit rating was cut to Ba3 from Ba2, which means its debt issues are considered non-investment grade and are therefore a speculative risk for investors. A Moody’s vice president says it expects Sotheby’s credit metrics will be “very weak over an extended period,” but the house’s “good liquidity, strong market position, and balanced financial policies” indicate it will weather the auction market's current slump. Last month, Sotheby’s reported its first quarterly profit in a year.