Downrate

To assign a lower rating or grade to something than previously held, often in financial contexts. This action reflects a decreased assessment of value, creditworthiness, performance, or potential. It can apply to various subjects, including investments, loans, corporate bonds, and even individuals or services. Downrating often signifies heightened risk or diminished prospects. The motivation usually is to reflect changed circumstances and offer a clear perspective on how the item is viewed by the rating agency or other entity involved. The effects are often perceived through a lowered value, increased borrowing costs, or decreased investor confidence.

Downrate meaning with examples

• Moody's decided to downrate the corporate bonds of the struggling tech firm due to the plummeting stock value and mounting debts, sending tremors through the financial markets.
• After a series of missed deadlines and product recalls, the consumer protection agency chose to downrate the company's customer service, leading to a decline in the business's standing.
• The economic downturn forced analysts to downrate the country's sovereign debt, making it more expensive for the nation to borrow money from international investors.
• Due to the poor financial health, the banking system began to downrate the value of many small businesses, creating additional financial problems for the owners.
• Concerned about the rising inflation, the central bank chose to downrate the economic growth of the economy, resulting in a lower investment confidence.