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THE SINGAPORE government suffered an unusual and embarrassing setback this week when it was forced to almost halve its planned $1.3bn divestment of Development Bank of Singapore (DBS) shares through Finlayson Global Corp. As the first deal from an Asian issuer to have a euro component bankers said it was an inauspicious start to the Chinese New Year. The Goldman Sachs-led multi-currency exchangeable issue was cut to $765m after investors questioned the complex structure and one day marketing period. Bankers also argued the execution of what would have been the largest ever convertible from Asia raised questions about Goldman's market judgement.

A debut bond issue by Singapore's Housing & Development Board (HDB) closed this week with marginal undersubscription of the S$300m deal's retail tranche. Having offered S$270m to institutional investors and S$30m to retail investors, bankers said that the slight shortfall was a symbolic marker of the limitations of retail participation.

COMMONWEALTH Bank of Australia this week launched a new product designed to offer the benefits of the swap market to investors whose internal rules forbid them engaging in swaps. The Coupon TIC is named after an existing product, the Transferable Investment Certificate, which CBA created for investors reluctant to buy zero coupon bonds for tax reasons.

China Euroweek incorrectly attributed Shanghai Matsuoka's 'B' share placement to Shenyin & Wanggua Securities. Nomura was lead manager for the 110m share issue which raised around $30m. The IPO is the only share debut offering to be completed from China this year.

WARBURG Dillon Read succumbed to market volatility and reduced Taiwan's Delta Electronics seven year convertible to $100m from $120m this week. Allocation was said to be tight despite market suggestions that some of the deal remained on the bank's books. Some syndicate bankers had been sceptical of the selling points of the new issue when contrasted with an outstanding CB yielding around 250bp over Treasuries, compared to the 75bp over Treasuries offered at year three and the 125bp over Treasuries offered at year five for the new issue.

CROATIA and Turkey both start marketing campaigns next week in support of debut euro offerings which will provide important tests of the investor appeal of their credit stories. Starting in Vienna on Monday, February 15, Croatia's roadshow will move on to Zurich, Frankfurt, Paris, Milan and Madrid, before finishing in London on Friday, February 19.

* As foreshadowed in EW587, Russia's Uneximbank has scooped the unwelcome prize of being the first Russian bank to default on its Euromarket debt. The bank, once a leading light of the Russian banking sector, last week failed to make the $12.4m coupon payment on its $250m 9.875% August 1, 2000 issue, which fell due on Monday (February 1), having already missed the January 27 interest payment date on a $50m three year floating rate note private placement from 1997. Both issues were lead managed by Merrill Lynch.

THE REPUBLIC of Colombia confirmed yesterday (Thursday) that it plans to tap the international bond markets for $400m in the first quarter, lending credence to talk that it was about to launch a Eu400m seven year Eurobond. Paribas and Warburg Dillon Read are believed to have been mandated by Colombia to issue the Eu400m to Eu500m deal, a size which some bankers argue is too ambitious for the market in its

A CALENDAR of around $3bn of securitised Latin American bond issues will take off in the week ahead when Pemex plans to bring the second $1.5bn tranche of its oil receivables deal. The Mexican oil concern launched a $1.5bn four tranche issue late last year, and the second portion, led by JP Morgan and Goldman Sachs, will be very similar in structure, with two triple-A wrapped tranches and two unwrapped triple-B portions.

THE REPUBLIC of Argentina continued to show the rest of Latin America how to run a successful funding programme, launching a Eu300m five year euro bond to bring its overall capital raising to over $1bn in little over a week. The offering, led by CSFB and Deutsche Bank, was the first plain vanilla public euro deal by a Latin American borrower this year and follows last week's Eu100m three year private placement (led by CSFB), a Eu350m nine year step down deal (MSDW) fungible with three other deals done last year in Deutschmarks, guilders and French francs, and a $200m reopening of its 2017 global bond (JP Morgan).

* Goldman Sachs has been appointed to advise Scottish Power, the UK utility, on its plans to list its telecommunications subsidiary, Scottish Telecom. The division includes Demon, one of the UK's largest internet providers. After a difficult start-up phase, Scottish Telecom has begun making money and its management is keen to see this reflected in the issue price of the group's shares. Early indications from analysts in London put the group's assets at between £1.1bn and £2bn.

THE SALE of stock in United Pan-European Communications has attracted overwhelming interest from international institutions despite the slight weakening of global equity markets. The deal also demonstrates the huge interest in telecoms stocks from international equity investors and the fact that, despite their caution about high growth sectors, they are still keen to acquire exposure to the right groups.