Standard & Poor's (S&P) slashed the credit rating of Parmalat by seven notches to double-C, less than a day after cutting the Italian foods group's rating to junk. It is understood to be the first time that the rating agency has downgraded a company twice in 24 hours.

The rating agency cited the "clear and present risk" of Parmalat defaulting on its debt as the reason for the further downgrade, which stunned the financial markets and heightened fears that Parmalat could default on its bond repayments.