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Debt levels/ratings can signal to investors that a company may be facing financial distress representing concerns regarding the company's ability to repay its contractual obligations.
Debt levels/ratings can signal to investors that a company may be facing financial distress representing concerns regarding the company's ability to repay its contractual obligations. In many cases, a company's stock can be negatively impacted by a 'downgrade' in their debt rating.
Insurance companies are a good example. Insurance firms are evaluated specifically by their debt ratings which represent a key indicator of the firm's performance and servicing of clients.
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