While corporate credit and equity analysts are skeptical about the financial condition of Sears, Roebuck & Co., most ABS researchers believe that headline-induced widening represents a buy opportunity. Despite rising delinquencies and loss reserves, the Sears credit card portfolios rival those of the leading finance companies that dominate the sector, analysts said, and there is ample capacity in the ABS market to fund Sears through this and next year.

Though ABS analysts painted Sears a relatively rosy picture, the company no doubt has challenges ahead, as troubles in the broader debt and equity markets have led to wider spreads. Sears fell into the camp of having "perceived headline risk," according to Credit Suisse First Boston, following the October dismissal of its head of credit and financial products division and the disappointing third-quarter earnings that followed.

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