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The last two Learning Curve articles described a multi-factor model for energy prices based on the observed forward curve and showed how energy derivative prices can be calculated.

Citicorp and Salomon Smith Barney were awarded the lead manager roles for a debut international bond offering by Manila Electric (Meralco) this week - a sign that the combined talents of the merged Citigroup could prove a formidable power in winning Asian mandates. Citicorp's ability to provide aggressive bridge financing for the Philippines utility, and Salomon's distribution capabilities, made for a winning combination given that the group has ambitions to launch a bond deal but may be compelled by time constraints to first put a bridge facility in place.

KOREAN finance company Daewoo Capital this week closed the first South Korean domestic asset backed deal to be structured without recourse to the seller. Chase Securities structured the W229bn securitisation of auto loans, which was lead managed by Daewoo Securities. "The closing of this transaction for Daewoo demonstrates the growing interest in local currency asset backed structures among Korean borrowers," said Paul Burke, head of global securitised finance for Chase in Asia Pacific. "Financing in won is becoming as viable an option in the asset backed market in Korea as it is for straight debt. This allows sellers to take advantage of the historically low won interest rate environment, the strengthening of the won against the dollar and the active support of the Korean regulators."

JAPAN'S fifth largest leasing company, Diamond Lease Co, entered the asset backed market this week with the largest ever international term ABS offering from Japan, apart from collateralised loan obligations. The $416m deal, sole managed by Tokyo-Mitsubishi International, parcels 13,648 equipment leases extended to 4,911 Japanese companies by Diamond Lease, a member of the Mitsubishi group.

Australia Ecorp rocketed 58% during its first day trading and closed yesterday (Thursday) at A$1.960 from a launch price of A$1.20. Merrill Lynch lead managed the A$161m offering, which was substantially oversubscribed. Of the institutional tranche, two thirds went to domestic investors with the remainder going overseas.

The development of Malaysia's domestic capital markets took a new step forward this week with the launch of what is believed to the first bond issue by a non-Asian company. Raising funds for its local operations, US computer group Hewlett-Packard became only the third issuer in the domestic bond market this year with a M$160m ($42m) five year fixed rate offering.

The Korea Electric Power Corporation (Kepco) looks poised to achieve its long held ambition of launching a first euro denominated bond from the republic. Roadshows for its transaction are scheduled for the second week of July. Although the Baa3/BBB- rated group has not yet received final clearance from the Ministry of Finance and the Economy (MoFE), the issue is likely to be approved provided proceeds are not immediately swapped out of euros.

Presentations for the inaugural international borrowing programme from Hong Kong's Kowloon-Canton Railway Corporation (KCRC) will kick off in Germany next Tuesday. Although the new quasi-

n Japanese finance company Aplus Co completed its third domestic auto loan securitisation this week, as Sanwa Securities lead managed a ¥13bn deal through Aplus Asset Back Corp The Third Series. The deal offered nine tranches of soft bullet bonds, one of which matures every six months until December 2003. All the notes are rated Aaa by Moody's - pricing ranged from 0.275% on the shortest tranche to 1.275% on the longest.

The recovery in Asia's equity capital markets will shift up a gear next week with the launch of New World China Land's $600m IPO and the fourth attempt at listing for Shangdong International Power Development (SIPD). HSBC Investment Bank is expected to launch the New World China Land $525m (plus 15% greenshoe) deal next week following an announcement to existing convertible bondholders in the local press.

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JAPANESE property company Sumitomo Realty & Development Co is on the verge of launching - perhaps late this week - a groundbreaking securitisation of commercial real estate. Joint leads Daiwa Sumitomo Bank Capital Markets and IBJ Securities will sell ¥24.5bn of five year domestic bonds backed by five office buildings in Tokyo and Kawasaki, that Sumitomo Realty has placed in trust with Sumitomo Trust & Banking.