Downgrade / Upgrade / Negative Watch / Positive Watch

An upgrade or downgrade in credit rating from a major ratings agency can be a big deal for a company, especially if they are near the line between “investment grade” and “high yield” – many investors don’t invest in companies ranked below investment grade. Before a company is formally upgraded or downgraded, it is often put on “positive/negative watch,” which is essentially a warning to investors that a rating change is going to occur unless the company’s financial situation changes.