A positive credit trend occurred in European CDOs in 2003 compared to 2002, according to Standard & Poor's latest transition study. Despite a higher overall percentage of downgrades last year, analysts say the increased number of upgrades should be an indicator of an improving ratings environment for European CDOs.

By S&P's count, the percentage of stable triple-A rated CDOs increased to just under 93% in 2003 from 84% in 2002, said analysts during a teleconference last week. This stability was displayed at almost every rating level in 2003.

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