1

downgrade

noun down·grade \ ˈdau̇n-ˌgrād \
Updated on: 1 Dec 2017

Definition of downgrade

1 : a downward grade (as of a road)
2 : a descent toward an inferior state
  • a career on the downgrade

Examples of downgrade in a Sentence

  1. a downgrade in the company's stock prices

  2. a singing career on the downgrade

Recent Examples of downgrade from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'downgrade.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of downgrade

1857


2

downgrade

verb

Definition of downgrade

transitive verb
1 : to lower in quality, value, status, or extent

Examples of downgrade in a Sentence

  1. The restaurant was downgraded from three to two stars.

  2. She didn't intend to downgrade the importance of her colleague's work.

Recent Examples of downgrade from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'downgrade.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of downgrade

1930

downgrade Synonyms


Financial Definition of DOWNGRADE

downgrade

What It Is

A downgrade is an announcement of an analyst lowering their opinion on the desirability of a company as an investment. It can apply to either debt or equity.

How It Works

Downgrades can come from a variety of sources: brokerage firms, research firms, ratings agencies, etc.

Downgrades of equities can happen for several reasons, but usually they center on industry, regulatory, technology, or management changes that the analyst feels will hinder the issuer's future performance. These factors create fundamental shifts in the analyst's outlook, making the security appear either fully valued or overvalued.

Debt downgrades generally come from ratings agencies such as Moody's or Standard & Poor's (S&P). A downgrade from one of them is a major signal that an issuer is more likely to default on its debt. If a bond is downgraded to a level below investment grade (aka, "junk"), there is often a serious sell off of those bonds, because most institutional investors are forbidden from owning junk bonds.

Why It Matters

Ratings have a large influence on the demand of a security. Downgrades (or even rumors of downgrades) tell investors that a security is now believed to be riskier, which may have a negative impact on the security's price. In turn, downgrades often lead to less trading activity and lowered liquidity.


DOWNGRADE Defined for English Language Learners

downgrade

noun

Definition of downgrade for English Language Learners

  • : an area or surface that goes downward : a downward slope

  • : an occurrence in which something becomes worse, less valuable, etc.


downgrade

verb

Definition of downgrade for English Language Learners

  • : to give (someone or something) a lower rank or grade

  • : to cause (someone or something) to be thought of as less valuable, important, etc.


DOWNGRADE Defined for Kids

1

downgrade

noun down·grade \ ˈdau̇n-ˌgrād \

Definition of downgrade for Students

: a downward slope (as of a road)
  • I lost my brakes on the downgrade.

2

downgrade

verb

Definition of downgrade for Students

downgraded; downgrading
: to lower in grade, rank, position, or standing
  • The hurricane was downgraded to a tropical storm.


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