Fallen Angel
Also called: fallen angel bond, downgraded bond
A fallen angel is a bond downgraded from investment grade to high yield. The downgrade forces index funds and constrained institutions to sell into a market of buyers who know they must, so prices often overshoot downward — which is why fallen-angel strategies have historically outperformed bonds issued as junk in the first place. The mirror image is a rising star, upgraded into investment grade and bought by the same mechanical flows.