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Kelda Group this week announced plans to create a mutual entity to acquire the assets of its subsidiary, Yorkshire Water, raising questions over the credit quality of bonds issued by the holding company and the utility. Kelda announced a strategic review of its business in April, since when its bonds have widened sharply. The July 2006 euro denominated issue for Yorkshire Water has widened from a low of Euribor plus 35bp early this year to around Euribor plus 81bp.

Argentina Barclays Bank (Miami) is in the market with a $75m USCP backup facility for Banco BI Creditanstalt SA, which is 50% owned by Bank Austria Creditanstalt International.

Bahrain Arab Banking Corporation has signed its $400m bullet five year term loan, after increasing the total from $300m.

Dresdner Kleinwort Benson and CA IB were forced to scale down Lietuvos Telekomas' $160m IPO this week citing poor international appetite for telecom stocks despite the recovery in sentiment toward the sector in recent weeks. The Global Depository Receipts (GDRs) were priced at $7.875 from a range of $7.50-$9.50 with each representing 10 shares. The offer was originally intended to sell 35% of the government's stake in the national fixed line operator. In the event, just 25% was sold in the first major privatisation from Lithuania.

Bankers at Deutsche Bank and ING Barings are confident that the $330m IPO of Mobile Tele-Systems (MTS) will be a success, despite concerns over valuation. A price range of $19-$22 has been set for the 15.01m ADS sale (with each ADS representing 20 shares) and MTS will list on the New York Stock Exchange on June 30. Pricing and allocation will be on June 26 and there is a 15% greenshoe.

Neuer Markt in brief * Gontard & Metallbank will bring media company IN-motion to the Neuer Markt next week with a Eu74m-Eu84m IPO.

Nomura International's principal finance group has opened a full German branch and hired David Pascall, a former senior manager at British Petroleum, to head it. Guy Hands, head of the principal finance group, has long hoped to replicate the group's UK success in Germany, and Nomura has had a presence in Düsseldorf since 1998 through Deutsche Annington Immobilien, a branch of its Annington Homes business.

Croatia The Republic of Croatia is looking to launch its ¥30bn seven year Samurai deal via Daiwa SBCM shortly after the June 20 presentation in Tokyo. The deal is likely to have a coupon of between 3% and 3.5%.

Finland Unified messaging systems provider Tecnomen will raise Eu91m-Eu119m with an IPO which will list on the Helsinki Stock Exchange on July 4. The offer of 14m shares consists of 7.3m new shares, with 5m sold by parent company Kyro, and a greenshoe of 1.7m primary shares.

Market report: Compiled by Glenn Blackley, RBC DS Global Markets, Australia. Tel: +61 2 9373 0431

THE Department of Finance of the Republic of the Philippines and Korea Electric Power Corporation (Kepco) plan to raise yen denominated bonds, as global market volatility continues to leave the euro and dollar bond markets unappealing for issuers. The potential borrowers said the relative stability of the yen market had heavily influenced their decision to finance through yen.