Upgrades Outnumber Downgrades!

Just read some good news in the Wall Street Journal this morning regarding commercial real estate.


They reported that in the first half of 2008, the bond rating firm Moody’s had 234 upgrades, 123 downgrades, and 1452 decision of “no change” with respect to bonds and other instruments backed by commercial real estate mortgages. 


While this was certainly good news with everything else happening in the economy, Moodys of course took great pains to stamp out and crush any enthusiasm or excitement that anyone might take from the announcement by including a disclaimer.


Despite the relatively strong first-half performance, we continue to believe that the overall upgrade to downgrade ratio will moderate as the weak economy impacts commercial real estate,” said Michael Gerdes, a senior vice president at Moody’s. “However, we maintain a slight bias favoring upgrades over downgrades.”


In this market, however, I’ll take a slight favorable bias any day and run with it.