SFA Research Corner: A Good Year in Securitization Ratings; ESG-S Factors Continue to Impact
Provided by Structured Finance Association
Credit ratings activity has been overwhelmingly positive for the U.S. securitization market as upgrades have easily exceeded downgrades, in 2021, according to Moody’s Investors Service. Auto ABS was by far the best performer as an average of 81% of the tranches in this sector have been upgraded. Credit rating actions related to ESG factors continued in 2021, albeit at a slower pace than in 2020 when they represented roughly 25% of the structured finance rating actions that year. S&P Global reported taking 137 negative ESG-related credit rating actions in 2021.