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The fallen angels is an interesting construct. At the end of the day, their ratings are considered junk. Classifying them as crap is appropriate. Without seriou
by A4ET8a8uTh0 7y ago
The fallen angels is an interesting construct. At the end of the day, their ratings are considered junk. Classifying them as crap is appropriate. Without serious infusion of cash there is a notable nonzero change they would fail. What is the point of those ratings if they are being ignored at the first sign of trouble?
- ipsum2 7y ago> Without serious infusion of cash there is a notable nonzero change they would fail This is an exaggeration. Many companies purposely have junk bonds so they can borrow more money at a low rate, compared to investment grade bonds.
- A4ET8a8uTh0 7y agoYes. Their purpose is to have funding. Do you think they pay higher interest rates out of the goodness of their hearts? I am not sure what you are arguing here.
- gruez 7y ago>Many companies purposely have junk bonds so they can borrow more money at a low rate, compared to investment grade bonds. What? Conventional wisdom says that risky (junk) bonds would have higher yields (aka costs for the borrower) than safer (investment grade) bonds.
- elliekelly 7y agoRecent history has shown that the ratings are calculated as a function of politics, market psychology, and the rating agency’s best hunch.
- foota 7y agoThere's a difference between a company that has always been junk and a company that is only rated junk because of the current crisis?