Still in its infancy, the Portuguese government's securitization of unpaid tax and social security claims hit its first snag. Sagres 2004 stumbled after a reportedly wide collections deficit triggered a Fitch Ratings negative watch on all six classes under the 1.43 billion ($1.80 billion) structure.

The transaction reports on a semi-annual basis, making it tough to monitor. "At the moment we are looking for more detail to try and better understand the nature of the underperformance - is its late collections based on a slow collection process or lower collections, as people may not be able to pay everything they owe," said Markus Krebsz, a Fitch analyst covering the deal

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