Record Wave of Likely Fallen Angels

The video discusses the significant downgrades in debt ratings, with $300 billion worth of issuers affected, the most since 2015. S&P Global warns of further downgrades, with 111 issuers at risk of losing investment grade status. The pandemic and falling oil prices have exacerbated the situation, affecting companies like Virgin Money and Peugeot. The Federal Reserve and ECB are stepping in to support at-risk companies, with the Fed even entering the junk bond market. Companies like Royal Caribbean are adopting creative strategies to manage downgraded statuses and raise funds.

What is one of the main reasons for the increase in debt downgrades according to the transcript?

• Rising oil prices

• The coronavirus pandemic

• Increased consumer spending

• Government bailouts

What action has the Federal Reserve taken to support companies at risk of defaulting?

• Provided direct loans to consumers

• Reduced taxes

• Stepped into the junk bond market

• Increased interest rates

Which type of bonds is the ECB buying to support the market?

• Government bonds

• Triple A rated bonds

• Triple B rated bonds

• Junk bonds

How are companies like Royal Caribbean responding to their downgraded status?

• By reducing their workforce

• By becoming creative with bond offerings

• By increasing ticket prices

• By selling off assets

What is a potential consequence for companies that lose their investment grade status?

• Easier access to loans

• Higher stock prices

• Difficulty in raising money

• Increased market share