Downgrade
Decrease in rating of an asset
A downgrade is when an asset, company or government has it’s rating lowered. Typically this will represent either a lowering of the quality of the asset, or the increased likelihood of default on a corporate or government bond.
Equity downgrades are usually done by equity researchers, whilst bond ratings are done by the main rating agencies.
Free Resources
To continue learning and advancing your career, check out these additional helpful WSO resources:
- Retained Earnings
- Fraud Triangle
- Accounts Receivable Turnover Ratio
- Marginal Cost Formula
- Nash Equilibrium
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