U.S. MBS Outperform Overseas Peers

Outside of the troubled manufactured housing sector, the credit performance of mortgage-related securities in the United States has been relatively good compared to corporate credit performance both within this country and globally, the collective results of separate studies by the three major rating agencies here suggest.

Although global corporate credit generally has been improving, downgrades have still been outpacing upgrades, according to studies by Moody's Investors Service and Standard & Poor's.

"All regions - barring Europe - showed a relative improvement in corporate creditworthiness in the third quarter relative to the second, even though downgrades still substantially outpace upgrades in the largest regions," Standard & Poor's reported.

Following the global trends, the U.S. corporate credit market has seen more downgrades than upgrades. But it is faring better than, for example, Europe, according to S&P. U.S. corporate credits had a downgrade-to-upgrade ratio of 70% in the third quarter, compared to 76% in the second.

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