Lamanna Laundry Ltd. is a full-service laundry provider, focusing on high-end clientele. Lamanna Laundry has recently invested in new technology to improve efficiency. In order to finance the new technology, the company issued a 10-year bond on January 1, 2017. On issuance, the bonds were assigned a BBB-credit rating by Standard & Poor's, and the market rate for the bonds was 9%. During the year, competition heightened in the industry, and Lamanna Laundry experienced four consecutive quarters of increasing losses and deteriorating financial position in 2017.
(a) Discuss the potential impact on the bonds' credit rating, if any.
(b) Discuss the potential impact on investors' required yield on the bonds, if any.