At the same time, the Fed's actions may backfire on healthy companies that choose to borrow now, because an improving economy could increase demand for capital and raise borrowing rates, making it costly to refinance. Nevertheless, companies are selling less short-term debt. Since October, Moody's, a credit rating agency, has downgraded 66 companies' short-term ratings and upgraded just 11.
Downgrades ordinarily make it more costly for companies to raise cash.
Downgrades to even lower levels often shut companies out of the short-term market. J.C. Penney Co. Slower earnings growth, equity buybacks and merger activity caused several other downgrades this year, Moody's said. That worm could turn, though, if the U.S. economy strengthens, Puchalla said. All rights reserved.