A couple of days ago Standard & Poor’s Ratings Services announced that the “rapid” deterioration in credit conditions has forced the rating agency to review its assumptions and methodologies for assessing collateralized loan obligations, or CLOs.

While the review will likely raise CLO enhancement levels and ratchet down some ratings on certain outstanding securities, that wasn’t the story of the announcement. Buried in S&P’s announcement was the following jewel:

“Despite worsening economic conditions, we expect that most ‘AAA’ and second priority ‘AA’ rated classes to withstand the scenarios currently envisioned by Standard & Poor’s Global Fixed Income Research. … At this time we believe that any classes we downgrade due to deterioration of the CLO collateral will primarily be the more subordinate notes.”

Sounds like good news to me. As everyone gropes for a bottom to this credit mess, S&P’s pronouncement seems to say as such. Whether S&P is correct is a whole other story, but at least the rating agency has offered a glimmer of light in the distance.