Shares in IndyMac Bancorp Inc. dropped nearly 10 percent Tuesday after the Pasadena-based lender’s credit rating was cut to “junk” status by a bond rating service.

Standard & Poor’s said that it is concerned about the lender’s “exposure to deteriorating housing markets,” and cut the rating to non-investment grade “BB+” from investment grade “BBB-.”

The Pasadena-based lender’s fourth-quarter nonperforming assets will likely increase “materially on both a percentage and dollar basis from third quarter’s already very high 3.65 percent of loans,” S & P; added. Continued losses would also negatively affect IndyMac’s capital, S & P; said.

S & P;’s outlook for IndyMac is negative, meaning the company has a one-in-three chance of being downgraded again in the next two years.

Last week, IndyMac said that it expected further losses until at least the second half of next year and rejected a shareholder proposal to raise its share price by buying back shares of the company from investors.

Shares in IndyMac closed down 9.7 percent Tuesday to $7.61 on the New York Stock Exchange.