Rhinebridge, a Dublin-listed conduit set up by troubled German bank IKB to invest in debt securities, was put on "rating watch negative" by ratings agency Fitch last Wednesday.

The move comes less than a month after IKB almost folded due to credit problems at its other Irish conduit, Rhineland Funding, before securing an 8bn rescue package from German state bank KfW.

It also comes after the even more spectacular 17.3bn blow-up and bailout of Sachsen LB's Ormond Quay Funding just over a week ago . . . closely followed by liquidity problems at Sachsen Funding I, first marked last Tuesday when Standard & Poor's listed the vehicle as "credit watch negative".

The rating watch affects $2.4bn of Rhinebridge's commercial paper and capital notes, which it issues to fund investment in securities of repackaged home loans and other debt . . . including subprime mortgages.

The conduit was approved for listing on the Irish Stock Exchange on 27 June 2007.

Now, just two months later, Fitch has said there is uncertainty over Rhinebridge's ability to secure continued funding in the commercial paper market and that the vehicle may have to sell assets and/or liquidate assets quickly to meet maturing liabilities.

Rhinebridge's portfolio is made up of 81% residential mortgage backed securities, 16% other collateralised debt obligations and 3% cash, according to Fitch.

The portfolio has a 79% exposure to the US, which has been experiencing high default rates on subprime mortgages for months.

Currently 83% of Rhinebridge's portfolio is rated AAA by Fitch, 14% rated AA and 3% rated A. However, Fitch says the market value of the assets has been coming under extreme pressure as the subprime contagion spreads.

Sachsen Funding I, like Rhinebridge a conduit for investing in long-term asset backed securities such as mortgages, was approved for listing on the Irish Stock Exchange (ISE) only on 6 June 2007. But S&P determined last Tuesday that it could already be in a wind-down phase as a result both of its exposure to the deteriorating US subprime market and the possibility that it may be unable to meet its own borrowing obligations in the commercial paper market.

The bank had said that the line of credit extended to it by the country's associated savings banks to save Ormond Quay would also allow it to fulfil its financing obligations to both Sachsen Funding I and Georges Quay, its other Irish vehicle. But in a statement on Thursday, Sachsen raised the possibility of deleveraging or restructuring the fund and liquidating its investments.

The bank had initially made reassuring statements about Ormond Quay too which ultimately turned out to be false.

Just a week before accepting the multibillion euro bail out, Sachsen LB dismissed reports that its ailing Irish conduit was invested in collateralised debt obligations . . . essentially packages of mortgages and other loans. It has since emerged that about 20% of Ormond Quay's fund was invested in subprime mortgages . . . the riskiest kind of home loan.

Late last week Sachsen postponed the release of its results until this Friday.

The bank was scheduled to report sixmonth figures on Friday. The bank's head of capital markets, Stefan Leusder, also announced he would be resigning.