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The poor performance of many subordinated debt issues in 1998 deterred investors from moving down the credit curve.

Investment banks have quickly realised that, to compete in the new credit markets of Europe, they have to provide constant research on the credits which form it.

The pace of new issue activity in Europe's nascent high yield markets is still more akin to the snail than the hare. And its range of credits lacks diversity, with investors keen to buy paper outside the start-up telecoms sector.

The combined effect of a new currency regime in Europe and the stabilisation of the markets after last year's emerging markets crises has been to slacken demand for supranational and government agency paper.

The new European corporate market has got off to a flying start, with record breaking deals and volumes ensuring the sector has grabbed the headlines this year.

Pfandbrief issuers have ridden a wave of demand this year as portfolio reallocation in the euro zone has led to strong demand for almost all types of spread product.

The development of a credit culture among European fund managers took a long time to get underway. The advent of the euro has made its momentum unstoppable.

Devolution and the need to diversify their sources of funding are prompting Europe's regional and municipal credits to consider the new euro bond market.

The issuers facing arguably the toughest challenges in euroland are EU sovereigns. Aside from the benchmark issuers, Germany and France, state treasury officials have suddenly found themselves as a part of Europe's credit markets.

Everyone knew that the introduction of the euro would kickstart the development of a credit market in Europe. But few could have predicted the speed at which it would take off.

After a month of marketing on three continents, Hong Kong real estate company Sino Land Co Ltd launched its $301.3m property securitisation last Friday. The deal blew out, as investors leapt at the opportunity to buy Asian risk through an unusually conservative structure. "Demand was overwhelming - we could easily have placed all the bonds in either Europe or the US," said KV Prabhakar, head of asset backed syndication and trading at sole manager Deutsche Bank in London. "The triple-A tranche was more than three times oversubscribed, and the double-A between two and 2-1/2 times."

An imminent new issue from Mahanagar Telephone Nigam Ltd (MTNL) is set to breathe new life into the sluggish Indian privatisation process. Deals are also expected from Essar Steel and Gujarat Adani Port despite political instability in the country. Bankers said beauty parades should begin within the next two weeks for a further selldown of the Indian government's stake in MTNL. A total of 19m shares will be sold as GDRs, raising around $92m.