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Lloyds TSB demonstrated the remarkable new depth of demand in Europe for capital securities this week when it raised $2.8bn of upper tier 2 debt in a five tranche transaction lead managed by Goldman Sachs.

Lloyds TSB demonstrated the remarkable new depth of demand in Europe for capital securities this week when it raised $2.8bn of upper tier 2 debt in a five tranche transaction lead managed by Goldman Sachs.

Citibank this week completed the first collateralised loan obligation backed by pan-European corporate loans, as Salomon Smith Barney sold Eu280m of bonds in a Eu4bn synthetic securitisation. "The target customer base for our global relationship bank is the top 1,800 corporates in the world - about 40% of those are in Europe," said Marcus Giancaterino, head of new asset classes in Citibank's London securitisation group, which structured the deal with the bank's credit derivatives team. "We have freed up regulatory capital on a very high quality portfolio of loans."

THE FRENCH Trésor's privatisation sale of stock in Crédit Lyonnais has received an exceptional response from institutional and retail investors. The flotation of the bank, which has undergone a remarkable revival since its virtual bankruptcy a few years ago, was more than 20 times oversubscribed.

The Lloyds TSB group launched a five-pronged attack on the market, with three tranches of subordinated sterling debt and two tranches of subordinated euro debt. The total size of the deal was the equivalent to about $2.8bn. The sterling legs, all in the form of step-up callable perpetuals, were swapped at the call date to floating sterling, the borrower was reported to confirm. Each leg is expected to be called, as the step-ups are pretty punitive.

Any hopes Mannesmann had of avoiding the difficulties of the fixed rate euro credit market by launching a floating rate note were dashed this week as the latest leg of its loan refinancing was cut back to the minimum size of Eu1bn. Mandated to Balaba, Commerzbank and Paribas to re-offer Euribor plus 20bp last Wednesday, the deterioration in credit markets pushed out the centre of gravity of interest by several basis points, according to the leads, and the rumoured Eu2bn size proved unattainable.

Any hopes Mannesmann had of avoiding the difficulties of the fixed rate euro credit market by launching a floating rate note were dashed this week as the latest leg of its loan refinancing was cut back to the minimum size of Eu1bn. Mandated to Balaba, Commerzbank and Paribas to re-offer Euribor plus 20bp last Wednesday, the deterioration in credit markets pushed out the centre of gravity of interest by several basis points, according to the leads, and the rumoured Eu2bn size proved unattainable.