KBRA releases a report examining the stability and transition patterns of our ratings over a 1-year, 3-year, 5-year, and lifetime period between 2011 and 2025. The ratings universe used in this study includes both published and unpublished long-term credit ratings (LTCR) assigned across all geographical regions.

Key Takeaways

• KBRA’s ratings have generally performed in accordance with their definitions, with investment-grade (IG) rated securities (BBB- or higher) exhibiting greater ratings stability than those rated non-investment grade (non-IG). For example, more than 99.3% of KBRA-rated securities initially assigned a AAA maintained that rating over a 1-year, 3-year, 5-year, and lifetime window.
• Regardless of the observation window, IG rated securities exhibited stability ratios of at least 94.9%, with high investment-grade (high-IG) rated securities (A- and higher) having a stability ratio of over 97.1%. Meanwhile, non-IG securities were stable 89.5% of the time over a 1-year window, 81.1% over a 3-year window, 72.3% over a 5-year window, and 88% over the ratings’ lifetime window. The relatively lower stability of non-IG ratings relative to IG ratings is to be expected, given the speculative nature of issuers and securities rated below BBB-.
• Since our prior study, ratings generally remained stable. Over a 1-year, 3-year, and 5-year time horizon, ratings stability changed -0.1%, -0.1%, and -0.3%, respectively, while the lifetime ratings stability changed +0.1%. The modest declines were driven by structured finance (SF), while corporate, financial, and government (CFG) ratings exhibited improvement in each of the respective windows.
• Based on KBRA’s aggregate 1-year transition analysis, 8.1% (13,169) of KBRA ratings transitioned to a higher rating between 2011 and 2025, while 2.3% (3,720) experienced a downward transition. Meanwhile, 82.7% (134,999) of our ratings were stable and 7% (11,365) were withdrawn during the study period—91.6% (10,414) of withdrawn ratings occurred after a full payoff of the debt.
• Lifetime rating transitions were overwhelmingly positive as upgrades outpaced downgrades by approximately 2.5x.
• Over the lifetime study period, 1.6% (775/48,123) of all assigned ratings experienced a downward transition to CCC+ or lower, where such ratings are deemed to be near default or in default. Of these, over 70% were initially assigned non-IG ratings (B- to BB+). Of the 775 ratings that transitioned to CCC+ or below, 153 were lowered to D, which KBRA defines as an issuer or a security in default; this equates to 0.3% of the 48,123 assigned ratings between 2011 and 2025. Notably, 90 of the 153 (59%) transitions to D were initially assigned non-IG ratings.

Click here to view the report.

Recent Publications

• KBRA Global Rating Stability and Transition Study: 2011-2024
• KBRA’s Global Rating Stability and Transition Study: 2011-2023
• KBRA’s Global Rating Stability and Transition Study: 2011-2022
• KBRA’s Global Rating Transition Study: 2011-2021
• KBRA’s Global Rating Stability Study: 2011-2021

About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

Doc ID: 1013769

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