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CZECH aircraft manufacturer Aero-Vodochody's debut international bond had to contend with a shock ratings downgrade for the Czech Republic yesterday (Thursday), but still managed to come to market at the tight end of its pricing range and enjoy a successful reception. Bookrunner CIBC Wood Gundy Oppenheimer and joint lead Deutsche Bank launched the $200m seven year Euro/144A deal on Thursday morning in London on indicated terms of 280bp-300bp over the 5.875% November 2005 US Treasury. They priced it at the start of New York trading with a 7.5% coupon and a 99.405 issue/fixed re-offer price to give a margin of 280bp over the US government bond benchmark.

GLOBAL co-ordinators BNL, Mediobanca and Schroders will launch the bookbuilding period for the sale of shares in Banca Nazionale del Lavoro next week. As foreshadowed in Euroweek two weeks ago, the Italian authority decided to proceed with the sale of shares in the bank after postponing the $4bn deal last month. "It was an entirely sensible decision to avoid the market at that time," confirms one Italian banker in Milan. "There was no need to subject the bank to terrible market conditions and risk selling the stock too cheaply or not at all. The markets have calmed considerably and are now widely viewed as in a recovery phase. Financial sector stocks will not be shunned automatically as they were last month."

* Merrill Lynch has begun trading in European equities by sector rather than by country in a move toward catering for the needs of investing clients after the introduction of the euro in 11 EU member states in January 1999. Similar moves will be made by other international investment banks in an attempt to bring closer the creation of a single market for shares of Europe's major companies. Most of the larger banks have already switched their research from a country to a sector basis and this is an important first step in ensuring a smooth change-over on trading floors.

CSFB AND Lazard Capital Markets executed a hugely successful Ffr1.15bn offering of exchangeable bonds this week on behalf of the French entertainment and media group, Pathé. The bonds are exchangeable into shares in British Sky Broadcasting. "Low interest rates and recovering global stockmarkets provide ideal conditions for issuers to raise equity-linked debt," said David Douglas, director for French equity capital markets at CSFB.

MERRILL Lynch and Merita are to price the Finnish government's sale of stock in telecom operator Sonera this weekend, in the most successful international equity sale of the current quarter. The roughly $1bn deal has bucked fragile market conditions. Although its two week bookbuilding period has coincided with stronger and more stable stockmarkets, the popularity of the stock proved a vindication of the lead managers' decision to press ahead when the markets were at their weakest.

LEAD managers Deutsche Bank and Banco Cisf will this week conclude the sale of stock in the Portuguese toll road operator, Brisa. The deal has sparked strong demand among international and local investors, with the local retail market already bidding for 16 times the number of shares on offer to this tranche.

FAR FROM being the aftermath of a melt-down, the last two months of 1998 represent a terrific opportunity for investors to search for bargains. "Emerging market funds and general international funds are looking for bargains among the current cheap trading levels throughout the emerging markets," says the global head of equity capital markets at a European firm.

THE INTERNATIONAL sale of stock in Hellenic Telecommunications Organisation (OTE) has closed to the relief and applause of international market participants. Run by CSFB, National Bank of Greece and Salomon Smith Barney, the deal was widely regarded as an acid test of the strength of the markets. Although the lead managers had luck on their side with recovering stockmarkets, the successful sale of OTE shares is an encouraging sign of the still strong demand for international equity.

THE FRENCH government is set to launch the Ffr40bn ($6.88bn) sale of stock in France Telecom next week. As predicted in Euroweek last issue, the government looks ready to dispense with a lengthy marketing period and push the button on a simple bookbuilding programme for the sale of stock and a capital increase by France Télécom itself in the form of a Ffr10bn to Ffr15bn convertible.

RADIO broadcasting and outdoor advertising company, Infinity Broadcasting, outlined the terms of its IPO this week, adding to the list of giant offerings slated to hit the US market in early December. The company, which is being spun off by parent CBS Corp, originally filed with the SEC in September, but did not specify the amount of shares to be offered. This week, Infinity revealed that a total of 135m primary shares will be sold globally. Some 20.25m of those shares will be offered outside the US.

MTN activity idled this week as the market prepared for the end of year rush. Swedish Match is signing a Eu500m programme next week, but otherwise there will be little issuance in the immediate future. Both Rome and Madrid are setting up programmes, but have yet to set signing dates. JP Morgan will arrange Rome's programme, while Madrid is still to mandate an arranger.