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A fallen angel is an investment instrument or company whose rating has fallen below investment grade.
After LightBear bonds were downgraded to BBB, many commentators have identified the issue as a potential fallen angel.
Fallen angels typically comprise bonds, stocks, or companies themselves. There are many potential reasons why a rating agency may downgrade a title from investment grade to speculative grade, such as an unfavorable change in company operations, negative market trends, or other poor prospects. Because an instrument’s price tends to decline after such downgrade, fallen angels can be attractive investments for vulture capitalists. Such investments, however, carry a high risk of failure because the instrument may not successfully revert back to investment grade and its value may continue to fall – perhaps even to zero.
Padlý anděl je investiční nástroj nebo společnost, jehož rating klesl pod investiční stupeň.
Poté, co byl rating dluhopisů společnosti LightBear snížen na BBB, řada komentátorů emisi nazvala potenciálním padlým andělem.
Padlí andělé jsou typicky dluhopisy, akcie, nebo samotné společnosti. Existuje řada potenciálních důvodů, proč ratingová agentura může snížit rating titul z investičního stupně na spekulativní stupeň, například nepříznivá změna v provozu společnosti, negativní tržní trend, a jiné špatné vyhlídky. Protože cena nástroje obvykle po takovém snížení ratingu klesá, mohou být padlí andělé atraktivními investicemi pro investory – mrchožrouty. Tyto investice ale nesou vysokou míru rizika selhání, protože se nástroj nemusí úspěšně vrátit zpět na investiční stupeň a jeho hodnota může dále klesat – třeba i na nulu.
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Simply subscribe to receive our Business Term of the Day at no charge to your inbox each business day, with explanation in English and Czech.
