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If A Credit Rating Is Downgraded, Does It Mean That A Default Is Imminent ? |
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Answer» Not necessarily. In most cases, a downgrade does not mean that a default is anticipated. All it INDICATES is that the RISK ASSOCIATED with the DEBT obligation is RELATIVELY higher than what it was before the downgrade. Not necessarily. In most cases, a downgrade does not mean that a default is anticipated. All it indicates is that the risk associated with the debt obligation is relatively higher than what it was before the downgrade. |
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