Standard & Poor's assigned a junk rating to Twitter's debt on Thursday, saying the company had a "fair" risk profile.
S&P's unsolicited rating of "BB-" is three notches below investment grade. The company sold $1.8 billion worth of convertible notes in September.
S&P holds a "stable" outlook on the social media firm as it expects it "to experience very strong growth and not encounter a significant increase in competitive pressure," the ratings agency said in a note.
Twitter shares closed down nearly 5.9 percent Thursday. Twitter's 1 percent Sept. 15, 2021 convertible note was last trading at 90.4272, down 0.8 percent from Wednesday's close.
"We could raise the rating if Twitter broadens its revenue sources through international expansion and new product launches, maintains its market position, continues to improve its profitability, and achieves positive and sustained discretionary cash flow in excess of $100 million in 2016," the note said.
However, S&P noted that it could lower the rating if Twitter failed to achieve positive discretionary cash flow, revenue growth or if revenue actually contracts.
"This could indicate that the business model may be facing significant risks...," the statement said.
Earlier this week, the stock gained more than 7 percent after Twitter CEO Dick Costolo laid out a range of possible product changes that he said would improve the company and spur long-term growth.