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Moody's Investors Service reported last week that it downgraded only five collateralized debt obligation (CDO) tranches within four transactions in the third quarter of this year - the lowest number the rating agency has reported since the fourth quarter of 1999. Three of the five downgraded tranches were resecuritized deals, and one was a market value CDO. Meanwhile, Moody's upgraded 17 CDO tranches across 11 deals. Moody's attributes the positive performance to the series of call options exercised in the quarter, as well as improved credit quality of underlying collateral.