The pace of CLO upgrades may be leveling off. Standard and Poor's said in a short note this morning.

The rating agency upgraded 1,906 CLO classes in the first three quarters of 2012, which is higher versus any full year to date.

According to S&P, the number of upgrades in 3Q12 dropped versus the previous two quarters. S&P increased 450 U.S. structured credit ratings during 3Q12 compared with 750 for 1Q12 and 706 in 2Q12.

Meanwhile, S&P downgraded 242 ratings during 3Q12, for a 1.9 upgrade-to-downgrade ratio, dropping from the record ratio of 3.3 in 2Q12. The year-to-date upgrade-to-downgrade ratio is 2.7, the rating agency said.

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