News surfaced last week that the fraudulent receivables sale found in PNC Bank's Market Street Funding (see ASR 4/29/02) was actually linked to a much broader scam currently under federal investigation, which could cost the global investment banking community as much as $1 billion, according to several published reports.

The headlines affected a second round of concern for the ABCP market, as participants wondered how much of the phony trades were financed via conduits. Reportedly, last Wednesday ratings officials were bombarded with inquiries concerning the scam. The good news, according to Sam Pilcer of Moody's Investors Service, is that the exposure was limited, not exceeding $200 million. All exposures were fully supported transactions, which have already been funded out of the market.

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