Difference between revisions of "Fallen Angel"

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A fallen angel is a bond that was rated as investment grade when issued, but has subsequently been rated as junk due to the deteriorating financial condition of its issuer. The bonds are downgraded to BB+ or below (junk) by at least two of the three major rating firms to be considered fallen angels.
 
A fallen angel is a bond that was rated as investment grade when issued, but has subsequently been rated as junk due to the deteriorating financial condition of its issuer. The bonds are downgraded to BB+ or below (junk) by at least two of the three major rating firms to be considered fallen angels.
  
The big rating firms that might downgrade the bonds are [[Fitch]], [[Moody’s]] and [[Standard & Poor’s]] (S&P). <ref>{{cite web|url=https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/fallen-angel/|name=What is a Fallen Angel?|org=Corporate Finance Institute|date=December 3, 2019}}</ref>
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The big rating firms that might downgrade the bonds are [[Fitch]], [[Moody's]] and [[Standard & Poor’s]] (S&P). <ref>{{cite web|url=https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/fallen-angel/|name=What is a Fallen Angel?|org=Corporate Finance Institute|date=December 3, 2019}}</ref>
  
 
Many fallen angels are from mature established firms that have fallen on hard times.<ref>{{cite web|url=https://www.bloomberg.com/news/articles/2018-12-23/why-fallen-angels-are-a-bond-market-preoccupation-quicktake|name=Why ‘Fallen Angels’ Are a Bond Market Preoccupation|org=Bloomberg|date=December 3, 2019}}</ref>
 
Many fallen angels are from mature established firms that have fallen on hard times.<ref>{{cite web|url=https://www.bloomberg.com/news/articles/2018-12-23/why-fallen-angels-are-a-bond-market-preoccupation-quicktake|name=Why ‘Fallen Angels’ Are a Bond Market Preoccupation|org=Bloomberg|date=December 3, 2019}}</ref>

Latest revision as of 11:54, 4 December 2019

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A fallen angel is a bond that was rated as investment grade when issued, but has subsequently been rated as junk due to the deteriorating financial condition of its issuer. The bonds are downgraded to BB+ or below (junk) by at least two of the three major rating firms to be considered fallen angels.

The big rating firms that might downgrade the bonds are Fitch, Moody's and Standard & Poor’s (S&P). [1]

Many fallen angels are from mature established firms that have fallen on hard times.[2]

References

  1. What is a Fallen Angel?. Corporate Finance Institute.
  2. Why ‘Fallen Angels’ Are a Bond Market Preoccupation. Bloomberg.