In what seems to be a rare event, another Bluestone Group subprime and non-conforming RMBS issue had three classes of notes upgraded and one affirmed. Ratings on the Class M, BA and BZ notes issued by Sapphire II NZ Series 2005-1 were raised to 'AAA', 'AA' and 'A-' from 'AA', 'A', and 'BBB', respectively. The 'BB' rating on the Class CA notes was affirmed.The upgrades reflect the considerable credit support that has built up within the transaction for the senior tranches and that will continue to increase due to the sequential payment structure. Outstandings have fallen below 10 per cent of the original balance.  Partially offsetting this is the high concentration risk that now exists in the significantly reduced mortgage pool.