Fewer U.S. structured finance bonds were downgraded during the first quarter than they were during each of the previous four quarters, excluding the second quarter of last year, according to the latest ratings transition study from Standard & Poor's. The study, which has not yet been released and encompasses collateralized debt obligations and asset-backed securities, finds just 1.07% of S&P's ABS ratings were lowered during the quarter, versus 5.29% in the year-ago period. Aircraft, manufactured housing and collateralized debt obligations with exposure to these sectors accounted for most of the downgrades, the report said. Globally, the downgrade rate was 0.50% for structured finance ratings during the time period, down from 1.23% during the first quarter of last year.
Overall, the majority of the activity came from a handful of sectors, with almost 10% of aircraft ABS ratings lowered and 2.44% of ABS CDO ratings cut. Meanwhile, rating changes on other sectors such as auto loan- and credit card-backed bonds were almost non-existent, with 0.71% of autos getting bumped higher and no rating activity on cards.