A rating upgrade happens when certain material facts about the financial position of the issuer or the bond improve. Maybe the issuer managed to raise fresh capital to pay down it’s debt or something similar happened. The rating agency will then move the rating up to reflect the new position of the issuer. Credit rating upgrades may make a previously high-yield bond become high-grade. This event may bring in more money from investors looking at high-grade investments. Investors who specifically want lower-credit quality exposure may choose to exit the bond. An upgrade should therefore improve the liquidity of the bond in the secondary market.