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Posted September 23, 2025 at 10:00 am
The historically low default rates in U.S. investment-grade (IG) asset-backed securities (ABS) can be ascribed to consistent underwriting standards and several investor protections inherent within ABS structures.
Source: S&P Global Ratings, as of 31 August 2025.
Default rates for IG ABS have compared favorably to IG corporate credit since their inception. From the late 1990s through 2025, no AAA ABS has defaulted, while 2002 was the only year in which the AA tranche experienced a default. There has not been a single default in IG ABS since 2010. Even at the height of the Global Financial Crisis, ABS held up well despite severe stress in financial markets.
-John Kerschner, Global Head of Securitized Products
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Originally Posted on September 18, 2025 – Chart to Watch: US investment-grade ABS exhibit low default rates
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