U.S. solar loan ABS index shows mixed monthly credit performance
Credit conditions in the U.S. solar loan asset-backed securities market are mixed in October 2026, with loss performance improving from the prior month while delinquencies edge higher. The latest reading also points to broader pressure over the past year, as losses and both early- and late-stage delinquencies worsen on a year-over-year basis.
Highlights
- Annualized net losses in the U.S. Solar Loan ABS Index decreased by 59 basis points month-over-month to 3.59% in October 2026.
- Early-stage delinquencies rose 6 basis points and late-stage delinquencies climbed 4 basis points month-over-month, reflecting continued borrower payment weakness.
- Year-over-year, annualized net losses increased 67 basis points, early-stage delinquencies rose 6 basis points, and late-stage delinquencies jumped 30 basis points, signaling ongoing credit deterioration.
October index readings and credit metrics
As reported by Kroll Bond Rating Agency, its U.S. Solar Loan ABS Index shows mixed month-over-month credit performance in October 2026 across key loss and delinquency measures.Annualized net losses fall 59 basis points to 3.59%, while early-stage delinquencies, defined as 30 to 59 days, rise 6 basis points. Late-stage delinquencies, defined as 60 days or more, increase 4 basis points, indicating that weaker borrower payment trends persist despite the monthly improvement in losses.
Year-over-year deterioration in sector credit trends
On a year-over-year basis, all three measures deteriorate, suggesting that the sector continues to face broader credit pressure beyond the month-to-month changes.Annualized net losses rise 67 basis points from a year earlier, early-stage delinquencies increase 6 basis points, and late-stage delinquencies climb 30 basis points. The combined trend indicates that investors in solar loan ABS are still contending with weakening collateral performance even as one monthly metric improves.
Sovereign borrowing risks in a higher-rate environment were the focus of our earlier coverage, noting that prolonged geopolitical strain and elevated fiscal spending can erode fiscal headroom and raise refinancing pressure. We also highlighted that emerging and frontier markets are particularly exposed because interest-service burdens tend to be high relative to narrower revenue bases, with persistent inflation shocks further complicating credit outlooks.
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