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When a firms debt rating is lowered from BBB to BB grade (in other words, from investment grade to junk), the firms access to new
When a firms debt rating is lowered from BBB to BB grade (in other words, from investment grade to junk), the firms access to new capital in the primary market for debt will become more expensive, meaning that it will have to pay a higher rate when it issues new bonds (relative to what it would have paid if it had not been downgraded).
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