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Salomon Smith Barney last week closed a highly innovative club funding vehicle for 29 small US banks, in which each bank issued a 30 year trust preferred security (TRUPS) to a special purpose vehicle, Regional Diversified Funding Ltd. All but one of the TRUPS has the same fixed rate coupon. The vehicle issued $225m of senior bonds rated A+ by Duff & Phelps and A1 by Moody's and $16.702m of subordinated, unrated income notes. Almost all the senior notes have been sold, and the equity was placed with a single investor.

In the last two decades, risk management has expanded its role from "in-house police" to a role concentrating on overall portfolio management.

This is the second part of an article on extreme Value-at-Risk. The first part ran in Derivatives Week's March 6 issue.

THE AUSTRALIAN domestic corporate bond market moved up another gear this week with the launch of the longest dated issue by a triple-B rated credit to date and the marketing of what could become the largest outstanding issue by any Australian entity. The marked step-up in activity is due to a likely supply shortage next month (set to be one of the peak months of the year) when A$3bn-A$4bn of government debt falls due, as well as a consequence of the corporate market's rapid evolution.

Australia * The bookbuild exercise on the sale by IBA Technologies Ltd of approximately 60m new shares and listing on the Australian Stock Exchange will start on March 22. The Australian retail offer closed on Monday, more than a week early, following strong demand.

WHAT A difference a week makes in Hong Kong's volatile stock markets. Shares in Sunday Communications slumped below their public offer price in Hong Kong yesterday (Thursday) as the local market suffered from the three-day fallout on Nasdaq. A total of 242m shares changed hands as the shares initially rose to HK$4.50 in early morning trade and then crashed back to earth in a dismal afternoon session, closing at HK$3.57. The Hong Kong public offer was priced at HK$3.78.

PREMARKETING of the simultaneous Singapore Stock Exchange IPOs of Singapore Airport Services (SATs) and SIA Engineering Company (SIAEC) is in full swing. Merrill Lynch and DBS are joint bookrunners and the syndicate comprises Crédit Lyonnais Securities Asia, Jardine Fleming and Warburg Dillon Read as co-lead managers for the international tranche, with OCBC as co-lead for the domestic public offering.

ROADSHOWS begin this week for borrowers at either end of the Korean credit spectrum, with Deutsche Bank running a $500m offering for the Korea Electric Power Corporation (Kepco) and joint leads ING Barings and Salomon Smith Barney a $300m-$400m deal for Cho Hung Bank. In advance of pricing towards the end of next week, Cho Hung's 10 year non call five deal was given a boost by a ratings announcement from Standard & Poor's (S&P) that placed the bank's subordinated credit one notch higher than Hanvit Bank. Assigning a BB senior rating and B+ rating to the prospective lower tier 2 tranche and B to the upper tier 2 tranche, the agency also placed greater emphasis on the bank's credit strengths rather than its weaknesses.

KOWLOON Canton Railway Corporation (KCRC) returned to the international bond markets last Friday to exploit a rallying Treasury market and price its second $1bn offering. KCRC, having previously launched a $1bn 10 year eurobond in July 1999, also viewed the new 10 year global SEC registered deal as a predetermined structure to match the prefunding requirements of its East and West Rail projects in Hong Kong's New Territories.

THE CRITICISM surrounding the Republic of the Philippines' $1.6bn global bond offering continued as pricing further undermined the Ba1/ BB+ rated sovereign's attempts to rebuild its reputation with international investors. Widening secondary market spreads across the sovereign curve prompted claims that lead manager Lehman Brothers had either failed to maintain any control over the deal syndication last Friday, or had walked away in the first days of secondary market trading.

THE attractive pricing of the PetroChina IPO has surprised some critics who believed that the timing of the issue and the recent technology fever in Asia augured badly for the big-ticket Chinese privatisation. PetroChina has scaled back the issue from 25% to just 10%, implying an issue size of between $2.8bn and $3.4bn - a more manageable size for the international markets to absorb. The market may enjoy further relief if, as anticipated, a strategic investor also emerges to take a stake in the Chinese giant.

Denmark The Eu50m five year revolver for Roskilde Bank should be increased to between Eu60m and Eu70m after raising a comfortable oversubscription. Syndication, being arranged by LB Kiel, will close early next week.