U.S. ABS upgrades outpaced downgrades in the third quarter for the first time since 3Q01, according to a report by Moody's Investors Service. accounting for 114 of the 175 ratings actions throughout the quarter, with downgrades dropping off 38% from the previous quarter to finish with 61.

Moody's credits the auto sector - which had the most upgrades of any asset class with 46, representing 40% of total upgrade activity - for the overall increase in upgrades. The upgrades "were due to a build up of credit enhancement relative to expected future losses in the underlying receivables pools," according to Moody's.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.