These days, the mantra in the mushrooming asset-backed securitization market can be summed up: If it's got cash flow, it can be securitized.

Although investors are demonstrating an almost insatiable appetite for new offerings in this market, a Wall Street analyst said that rising credit problems and diminishing volumes of reliable assets could present risks to buyers in the future.

"I'm not saying it's definitely going to be a crisis next year or tomorrow," said Judah S. Kraushaar, a banking industry analyst at Merrill Lynch & Co. during an roundtable discussion sponsored by American Banker. "But just because we have securities markets that have become a major source of funding for corporations or banks doesn't mean that we're going to avoid the risk someday of crises of confidence."

Asset-backed securitizations have boomed because banks and other businesses have discovered investors eager to buy their receivables in credit cards, home equities, auto and student loans, and a host of more esoteric offerings. Selling these receivables enables businesses to remove the assets from their books and gain inexpensive funding.

According to Chase Securities, $111 billion in asset-backed securities were sold on the public market through Sept. 30 - a record volume versus the $119 billion sold in all of 1995. Offerings on the private markets, where newer, more risky issues are offered, are also moving at a record pace - $7.5 billion so far, Securities Data Co. said.

While the securitization good times may be rolling, but Mr. Kraushaar is not the only one raising yellow flags.

Sam Tillinghast, managing director of SunAmerica Corporate Finance, a Los Angeles-based buyer of asset-backed securities, said at a conference in Miami last month that as more parties seek to enter the securitization market, they are increasingly failing to structure deals properly.

He warned in the newsletter Private Placement Report that increased competition, greater volume, and exotic classes of assets could prompt "stupid and irrational behavior."

Joseph A. Lorusso, president of the Farmington, Conn.-based Structured Finance Advisors Inc. and a longtime broker in the securitization market, said investors have become so eager to buy securitized assets that they don't require the assets or companies behind them to prove their reliability anymore.

"People seem to be getting more comfortable with these transactions after they're done once or twice. The idea of these deals experiencing some stress first is virtually nonexistent," Mr. Lorusso said.

At a conference in New York last week on emerging asset classes, brokers who used to originate the now-routine home equity securitizations discussed how they are delivering new securitizations to market on health club memberships, health care bills, airline tickets, catastrophe insurance, and even defaulted credit card debts. Some of the deals are so speculative that they are not submitted to bond-rating agencies for investment grading.

The nature of the securitizations isn't necessarily cause for concern, says Marcia Scheiner, managing director of asset securitization at CIBC Wood Gundy, because the most risky are the domain of only a few investors.

Nevertheless, brokers at the emerging assets conference noted that once- taboo offerings on the public market, such as subprime auto loans, are now commonplace. "The time it takes emerging assets to become commodities has really shortened," Mr. Lorusso observed.

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