What are fallen angels?

The term fallen angels (or fallen angels) refers to companies that issued bonds with a certain investment grade but have become "Junk bonds"due to the weakening of the financial situation of a country.

This happens if the income that was dedicated to a bond is reduced by external reasons. If to this is added the increasing level of debt, we can deduce that the reduction of the bond will be imminent.

For some companies, this lowering the price of bonos it can be a good opportunity to invest in them. One of the benefits of investing in corporate debt is being able to access theseángeles caídos which, in recent years, have outperformed high yield bonds.

If we want to invest in both fallen angels or high yield bonds, we need to be advised by experts. They will help us to diversify the risk of these bonds in the best possible way and make it safer for us to invest in them.

On the other hand, if you want to make a "forced sale" it usually creates a downgrade of the debt rating, and this in turn into a buying opportunity. This happens because the price change that the bond undergoes is taken advantage of.

So that we are not disappointed by the purchase of fallen angel bonds, it is advisable that we be advised, as we have said, by these financial experts in bonds. These will help us when it comes to diversifying the risk in the event that we want to acquire that bond or any other of the same characteristics.

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