One class of the Eaton Vance CDO III Ltd., managed by Eaton Vance Management, was downgraded today by Fitch Ratings today. The ratings on five other classes were affirmed.

The class D floating rate notes were downgraded to 'BB-' from 'BB+'. This was attributed to the deterioration of the credit fundamentals, the agency stated, noting the current weighted average rating factor of 56.09 relative to the initial WARF of 48.

The following notes were affirmed: class A-1, rated 'AAA'; class A-2, 'AAA'; class B 'A-'; class C-1, 'BBB+'; and class C-2, 'BBB+'.

Established in August 2000 at $400 million, the CDO contains a portfolio of diversified leverage loans and high-yield bonds. Over the last 18 months, the collateral manager reduced the level of high yield bond exposure, providing additional stability, said Fitch in its report.

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