{"id":222538,"date":"2025-04-22T16:34:24","date_gmt":"2025-04-22T20:34:24","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?post_type=glossary-terms&p=222538"},"modified":"2025-04-22T16:34:26","modified_gmt":"2025-04-22T20:34:26","slug":"downgrade","status":"publish","type":"glossary-terms","link":"https:\/\/www.interactivebrokers.com\/campus\/glossary-terms\/downgrade\/","title":{"rendered":"Downgrade"},"content":{"rendered":"\n

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.<\/p>\n\n\n\n

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