Italian securitization SCIP 2 has become synonymous with struggle. Last week, headlines heralded another round of shortcomings in the transaction's payment schedule that could trigger a ratings downgrade on the notes (see ASR 11/1/04).

"The notes are a speculative buy/hold for investors betting on the bail out by the Italian government," reported analysts at Dresdner Kleinwort Wasserstein last week. "After all, it would be the first transaction not to be refinanced/supported - however, that is a lot to bank on." Nevertheless, the launch of SCIP 3, postponed last year, is expected to surface in the 2005 pipeline, said market sources.

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