Moody's Investors Service found the number of downgrades of asset-backed securities rated by the agency decreased 50% in the first quarter of 2004 compared to the prior quarter, according to its soon-to-be released quarterly update. The data is encouraging, backing up mainstream commentary that the economy and the capital markets have indeed turned a pivotal corner.
Of the 84 upgrades during the first quarter, securities backed by auto loans made up nearly half, or 41 of that amount, the agency said. In fact, upgrade activity in 2004 is poised to easily surpass that of 2003, said Moody's analysts. The equipment lease sector saw its first upgrades since 1998, for a tally of l6. Furthermore, three structured settlement transactions sponsored by J.G. Wentworth represented the first such deals to be upgraded by the agency.