hard · Debt Capital Markets bond-instruments-structures
When an issuer crosses the 'investment-grade' boundary to become a 'fallen angel,' how do rating agencies often adjust the notching for existing senior secured debt?
- They only notch based on interest coverage ratios
- They notch the secured debt down to match the new junk status
- They remove all notches to simplify the rating
- They may introduce or increase upward notching
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