Close Navigation
Learn more about IBKR accounts

Downgrade

Trading Term

In the context of economics and investing, a downgrade refers to the reduction in the credit rating of a company, government, or financial instrument by a rating agency. This change often signals increased risk, suggesting that the entity may be less likely to meet its financial obligations. Downgrades can lead to higher borrowing costs, as investors demand greater returns to compensate for the perceived risk. For example, if a bond’s rating is downgraded, its yield may increase to attract buyers.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.