

A fallen angel is a bond or issuer that was originally rated investment grade but has been downgraded to below investment grade status. This downgrade usually occurs due to financial stress, declining performance, or increased risk.
The term fallen angel is commonly used in bond markets and credit analysis. It describes securities that move from lower-risk investment grade categories to higher-risk high-yield or junk bond categories.
Fallen angels are closely watched because the downgrade can trigger selling by investors who are restricted to holding only investment grade bonds. At the same time, these bonds may attract investors seeking higher yields.