Large-scale downgrades in CLO ratings, resulting from changes in rating methodology by Standard & Poor’s, will not likely result in a wide-spread sell-off of CLOs, according to a report published Wednesday by Wells Fargo Securities.

S&P released its new rating methods for CLOs on Sept. 17, estimating that the changes would cause downgrades of one notch for AAA-rated notes, and two or three notches for junior 'AA' through 'BB' tranches.

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