Corporate or municipal bonds that were investment-grade when they were issued but have been downgraded are called fallen angels. Bonds are downgraded by a rating service, such as Moody's Investors Service or Standard & Poor's (S&P).
Downgrading may occur if the issuer's financial situation weakens, or if the rating service anticipates financial problems that could lead to default.
The term fallen angel is sometimes used more generically, to refer to stocks or other securities that are out of favor with investors.
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