Aug. 3 (Bloomberg) — Standard & Poor's, frozen out of thecommercial-mortgage bond market since last year, is changing itsmethod for rating the instruments in a way that may produce highergrades for some securities.

The preliminary criteria that S&P released in June wouldresult in higher rankings for the three deals that it has ratedsince then, according to reports distributed to investors by thecompany. For a $340 million offering of mall debt that MorganStanley sold yesterday, S&P said its new methodology would ratethe entire deal investment-grade, while the old criteria resultedin $29.7 million of unrated debt.

Wall Street banks have been bypassing S&P's ratings forcommercial-mortgage bonds since the company derailed a $1.5 billionsale by Goldman Sachs Group Inc. and Citigroup Inc. last year bypulling its grades on the securities. Since then, S&P hasn'trated a so-called conduit deal composed of loans from multipleborrowers, the biggest part of the market, according to datacompiled by Bloomberg. The three deals rated since June are linkedto single property owners.