ABS downgrades in the US are still above historial average, says Moody’s

The frequency of US asset-backed security (ABS) downgrades fell to 7.8% in 2004 from 10.2% in 2003, but remained higher than the 5.4% historical average. The upgrade rate improved slightly to 2.1% in 2004 from 1.3% in 2003.

ABS securities backed by manufactured housing loans continued to experience a large number of downgrades, accounting for roughly 50% of all US ABS downgrades, and 27% of all structured finance downgrades worldwide in 2004. ABS securities backed by franchise loans, small business loans, aircraft and equipment leases, and tobacco settlements contributed roughly 40% of the US ABS downgrades.