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Canada made a welcome return to the global arena this week with a sell-out $2bn five year bond - one of the few dollar transactions this year to be placed on a truly global basis. Relinquishing the now traditional several day premarketing period, Canada surprised the market on Wednesday by announcing its intentions, which initially took the form of a $1bn five year bond to be priced at the 50bp area over Treasuries. CIBC, Deutsche and Merrill Lynch were mandated bookrunners. The issue was launched in the New York time zone to gain momentum from US demand, expected to be the backbone of distribution. After being marketed overnight in Asia and throughout the morning in Europe, the book had been built to a point where the deal size could be increased to $2bn and the pricing tightened to 49bp over Treasuries.

The European asset backed market hit a patch of calm this week after a fortnight of frenetic activity in which 12 deals were issued, worth a total of Eu5.4bn. The only transaction to emerge was a Eu55.5m bond for the universities of Alicante and Valencia in Spain (see separate story), but some structured finance bankers say the market could keep going as late as mid-December.

The Italian treasury last Friday (November 12) mandated Caboto, Merrill Lynch and Paribas to underwrite its Eu4.65bn securitisation of delinquent social security contributions after a fierce competition in which at least four powerful consortia of banks submitted bids. The leads aim to launch the deal in the middle of next week, and hope that the transaction's close association with the government will allow them to price the bonds a long way inside typical spreads on asset backed securities.

An agency of the government of Georgia has mandated structured finance boutique Fredell & Co to arrange finance for a new oil terminal on the country's Black Sea coast. The terminal, Supsa 2, will be at least four times bigger than the existing facility, Supsa 1, and is expected to cost some $200m. The project financing will be backed by the terminal's future oil transit fees.

Joint bookrunners Bankinter and Société Générale this week launched a Eu55.5m bond for two universities in Spain's autonomous community of Valencia, backed by payments from the region's government. Universidad de Alicante borrowed Eu24.7m and Universidad de Valencia Eu30.8m with identical bonds, issued by the universities themselves and wrapped by monoline bond insurer MBIA-AMBAC International.

Nomura's principal finance group is once again confident of success in its long running campaign to buy the housing estate of Germany's national railway company Deutsche Bahn. The PFG offered DM8.1bn (Eu4.1bn) for the 112,000 homes last July, but its bid was rejected in favour of a lower tender from a group of German investors (see EW 562). The sale was delayed by the country's general election and then by a series of disputes, but Nomura now believes it has made an offer the government will find it difficult to refuse.

Since the summer of 1997, when the first weather derivatives transaction was recorded, we have witnessed the development of a new derivatives market in the United States, which is gradually expanding across the globe.

Does Value at Risk (VAR) measure risk?

Energy markets around the world are rapidly being deregulated, exposing participants to potentially enormous risks. In response to this there has been an explosion in the use of derivatives for managing these risks.

Jardine Fleming and Morgan Stanley Dean Witter increased Gas Authority of India's (Gail) GDR sale to $218m this week in response to strong demand for the shares. Following downward pressure on the underlying stock during the last week, the GDRs were priced at $9.67 - the equivalent of Rs70 a share from a close yesterday (Thursday) of Rs79. That is a discount of 12% to yesterday's close or a 9% discount to an four-day average.

Korea Tobacco & Ginseng began roadshows this week for a $790m equity fundraising with Credit Suisse First Boston and Warburg Dillon Read at the helm. Investors are thought to be enthusiastic, although with pricing not due for a fortnight there have been few orders to date.

Barclays Capital has sold a $260m FRN for the Republic of the Philippines, tapping strong appetite among investors for Asian sovereigns amid a deficit of supply from the region. The issue is the 10th this year from either Bangko Sentral ng Pilipinas or the republic and confirms the Philippines as Asia's most prolific, if opportunistic, issuer. The country has borrowed $3.186bn this year.