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The highlight of this week's activity in the European high yield market was a Eu500m issue for GTS Europe, formerly known as Hermes Europe Railtel. Investors proved keen buyers of the transaction which was upped from a planned Eu300m. The deal comprised Eu225m of seven year non call life senior notes with a 10.5% coupon and Eu275m of 10 year non call five senior notes priced with an 11% coupon.

The co-arranging phase of the £265m of loan backing the LBO of Ineos Acrylics (formerly ICI Acrylics) by Charterhouse Development Capital has been so oversubscribed that the arrangers, Deutsche Bank and Merrill Lynch, have cancelled general syndication. Some 15 banks have joined, and all have seen their commitments cut back exactly to target. They were invited to commit £30m for 112.5bp in fees. The success is despite reservations expressed by several bankers that the structure was too heavy in the final years.

Rating: Aa2/AA/AAA Amount: Eu150m (fungible with three issues totalling Eu1bn launched 08/01/98, 05/03/98, 23/06/98) Öffentlicher Pfandbrief series 105

Brazil WestLB has completed a $100m standby facility for its Brazilian subsidiary, BEAL (Banque Européenne pour l'Amerique Latine).

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.

INCREASING WILLINGNESS among US investors to go down the credit scale to pick up yield was demonstrated yesterday (Thursday) when Lockheed Martin, the US aerospace and defence concern, launched a blow-out $3bn bond offering. The transaction, led by JP Morgan and Goldman Sachs, was increased from an original $2bn and involved the issuance of $750m six year bonds at 190bp, $1bn of 10 year paper at 215bp and $1.25bn worth of 30 year securities at 225bp - all at the tighter end of spread talk.

GLOBAL co-ordinator Goldman Sachs has successfully executed the sale of stock in Terra Networks, Telefonica's spin-off internet company. Shares soared this week to Eu37 on the first day after the Madrid exchange held a special auction. The shares had been priced at Eu13.

Allocation levels on the £8bn facility for Mannesmann reveal that after syndication Deutsche Bank holds a ticket worth £1.3bn, about 40% bigger than the next largest ticket. Also in the arranging group are Merrill Lynch and Morgan Stanley, with final takes of £800m each, and Bayerische Landesbank and WestLB with takes of £700m each.

Hopes for the re-opening of the Samurai market for emerging market issuers were raised this week when the United Mexican States became the first Latin sovereign in over two years to issue Samurai bonds. The sovereign launched a ¥30bn four year offering via Daiwa, carrying a 3% coupon and priced at a fixed reoffer of 99.51 to give a spread of 220bp over Yen Libor.

Gulf Investment Corp (GIC) has signed a $160m five year term loan with arrangers Riyad Bank, Arab National Bank, Al-Bank Al-Saudi Al-Fransi, and Saudi British Bank. GIC was created in 1983 to promote economic growth and business among the Gulf Arab states.