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Recently there has been lots of reported interest in the interest rate model of Brace, Gatarek, and Musiela (1997) (BGM), but anecdotal evidence suggests that it is proving difficult to implement.

Japanese asset backed issuance reached a crescendo this week, as finance companies hastened to fulfil funding targets before the end of the financial year on March 31. Five deals were launched this week without any apparent sign of investor fatigue - and significantly, only one transaction was swapped into a foreign currency. Market watchers said that while most Japanese investors are still unfamiliar with securitisation, demand is on the increase.

The Hong Kong government budget this week heralded a number of capital markets friendly measures including the HK$30bn ($3.8bn) privatisation of metro system MTRC, a reduction in the government's blue chip share portfolio and the merger and listing of the Hong Kong stock and futures exchanges as measures to boost the flagging economy. Most equity capital markets bankers saw the steps as positive. Said one: "These are a series of bold moves and what is more important is that the timetable for most of the measures looks to be fairly rapid." The decision to improve the speed and accuracy of the clearing system was singled out by a number of bankers as a positive move for primary market offerings.

A A$100m two year deal for Ford Motor Credit is expected to be priced today (Friday) by lead manager Commonwealth Bank of Australia. Launched off the group's MTN programme, the issue is expected to have a semi-annual coupon of 5.5% to yield about 50bp over Commonwealth Government bonds. A A$100m issue for Schroders Property Trust Pty Ltd has been launched by Deutsche Bank. With a three year maturity, the A- rated issue was priced with a semi-annual coupon of 6% to yield 97bp over government bonds, or 62bp over swaps, against an indicative range of 60bp to 63bp.

Sumisho Lease, an affiliate of Sumitomo Corp, this week launched a $290m securitisation of Japanese equipment leases through Goldman Sachs. With an average life around two years and a five year maturity, Cygnus Funding Corp was rated triple-A by Moody's and Standard & Poor's. The deal's coupon of one month Libor plus 70bp and issue price of 99.90 give an effective spread of 75bp over Libor.

Macquarie Securitisation, the unit of Macquarie Bank which finances mortgages for Australian non-bank lenders, returned to the Euromarkets this week with its first term securitisation since the Russian default, and its largest since December 1997. Lead managed by Deutsche Bank, the $800m issue for Puma blew out, as dollar based investors in Europe leapt at a credit story they know well, and which offers diversification away from US, European and Japanese assets.

The Republic of Argentina is considering an issue of $500m-plus five year bonds, possibly as early as today (Friday). Investors in the US said yesterday they had been approached by a number of underwriters with proposals this week and believed a deal of at least $500m in size was imminent.

Salomon Smith Barney and Macquarie Bank enjoyed a successful first week of roadshows in Europe marketing the A$150m equity issue for AAP Telecommunications, which is hoping to lure investors with news of its recent internet acquisitions and new internet focused strategy. A final size has yet to be set for the deal; as with all Australian issues that will depend on the bookbuild which will not officially start until the final days of roadshowing. Pricing is expected on March 10 at a slight discount to the share's market price.

The Nordic Investment Bank (NIB) and European Bank for Reconstruction & Development (EBRD) signalled a new spate of international activity in the Singapore dollar market, with the launch this week of debut transactions. Bankers believe that March is shaping up to be a particularly busy month as a handful of international borrowers accelerate deals in the belief that widening swap spreads will allow them to meet their sub-Libor funding targets.

India Infosys Technology's ADR issue is between 15 and 20 times oversubscribed, according to syndicate bankers. The company now faces the unusual prospect of potentially having to reduce the size of the NationsBanc Montgomery-led issue to comply with Indian government restrictions.

Merrill Lynch priced the landmark securitisation of Hong Kong commercial property for The Wharf (Holdings) Ltd last Friday, at spreads well inside initial price talk. The deal's nine tranche structure, offering a choice of floating rate US dollar, floating rate Hong Kong dollar and fixed rate Hong Kong dollar paper at each of three rating levels, proved the key to unlocking investor demand around the world.

The STALLED recapitalisation of the Thai banking sector looks set to resume next month with Salomon Smith Barney heading a strong syndicate line-up for the $1.75bn equity raising for Siam Commercial Bank (SCB), while a string of smaller names are also making fresh capital calls. The SCB deal is an important one for the region's moribund equity new issues market, and so its fate will be closely watched by professionals.