improving the quality or performance of something by making changes. For example, a computer's storage capability can be upgraded by adding a larger data storage disk.
increase in the quality rating of a security. An analyst may upgrade a company's bond or stock rating if its finances improve, profitability is enhanced, and its debt level is reduced. For municipal bond issues, upgrading will occur if tax revenues increase and expenses are reduced. The upgrading of a stock or bond issue may in itself raise the price of the security because investors will feel more confident in the financial soundness of the issuer. The credit rating of issuers is constantly being evaluated, which may lead to further upgradings, or, if conditions deteriorate, downgradings. The term upgrading is also applied to an entire portfolio of securities. For example, a mutual fund manager who wants to improve the quality of his bond holdings will say that he is in the process of upgrading his portfolio.
