What a difference a year makes, particularly regarding structured finance. After cycling through a record wave of downgrades in 2002, the CDO market has finally begun to show some ratings stability.

On the new issue side, however, it looks like supply will fall short of 2002, despite an overall increase in securitization volume by more than 20%. While firm numbers aren't expected until early January, sources at Moody's Investors Service stated CDO volume was indeed down for the year. At mid-December, it appears the number of Moody's-rated deals is down 10% to 15% from the 160 U.S. CDOs Moody's rated in 2002, and volume is down about 5% overall. In 2002, Moody's recorded $65.1 billion in dollar volume for the CDO market, a number expected to be far lower in 2003.

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