Investors holding on to debt issued by the struggling Avon Products Inc. are having to pay more for a little piece of mind — just as equity investors are starting to get more nervous.

Fitch Ratings said credit default swaps, which protect bond investors in case a company can’t make good on its debts, are trading at record levels. Fitch said the spread on a five-year contract widened 22 percent over the past month to 1,109 basis points.

Fitch noted that a dividend cut from the company would be good for creditors, but also a signal of pressure at the firm.

Stock investors clearly didn’t like that train of thought and pushed Avon’s stock down 11.7 percent on Thursday to $2.67 as the close approached on Wall Street. The company was left with a market capitalization of $1.16 billion.

The debt specialist noted that Avon’s “liquidity has tightened but remains adequate in the near term” and that the company continues to wrestle “the top line, margins and cash flow.”

Avon’s cash balance has fallen by more than $370 million since yearend and the firm recently said its free cash flow would below the $100 million it guided Wall Street to in July.

The beauty merchant is on pace to ring up sales of about $7 billion this year, down from $10.5 billion in 2012.

And while Fitch said Avon had access to nearly $1 billion, the rating agency said “the modest liquidity cushion does not allow enough flexibility to accelerate a cash restructuring that can better match costs to a much smaller company.”

Fitch noted that a financial hit from foreign currency exchange “has had an outsize impact on Avon, which has also been compounded by slowing emerging markets, particularly Brazil. Neither factor appears likely to turn around in the near term, further pressuring margins and cash flows.”

In September, there were reports that Avon might take an investment from a private equity company.

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