“Among the areas experiencing stabilizing trends are consumer finance asset quality, the credit markets–specifically for unsecured and asset-backed securities (ABS), and the performance of certain business development companies (BDCs). On the downside, the commercial real estate (CRE) sector continued its slide, which we expect will only worsen.”

“Consumer finance asset quality showed early signs of stabilizing during the third quarter. Early-stage delinquencies declined from the previous quarter for rated credit card issuers, hinting that asset quality deterioration may finally stabilize over the next several quarters. For captive auto financiers, such as General Motors Acceptance Corp, increased volumes due to the “cash-for-clunkers” program, industry-wide strength in used car prices, and stabilizing credit supported more-favorable results.