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Market commentary Compiled by Glen Blackley, RBC DS Global Markets, London. Tel: +44 171-865 1759

In the run-up to the single currency in Europe, more and more cities and regions in Europe are starting to look at the international capital markets as a potential source of funding. Italy's larger local authorities are no exception. A few have already tapped the international capital markets -- such as Naples, Sardinia and Lazio -- and several more are looking at the possibility, among them the City of Rome which is setting up a Euro-MTN programme.

Italian borrowing in the international capital markets is growing rapidly in the run-up to European monetary union. A wider range of corporates is starting to use the bond markets, diversifying away from bank financing and providing new investment opportunities for the increasingly institutional investor base in the domestic market. New Italian bank issuers are starting to emerge in the MTN and bond market, while local authorities are becoming increasingly frequent and adventurous borrowers in international markets.

BANKGESELLSCHAFT Berlin, Bayerische Vereinsbank and Deutsche Bank have closed general syndication of the DM120m five year term loan for Ceskoslovenska obchodni banka. Syndication was well supported with many bankers suggesting that this has been one of the region's most successful deals of the first six months of 1998.

Croatia Arrangers SG and UBS are preparing to close syndication of the $70m dual tranche facility for Pliva dd which is already oversubscribed. A couple of slower banks are to join before the deal is fully closed. The credit, priced at 80bp over Libor, is split between a $50m three year extendible term loan and a $20m three year tranche. The $50m tranche refinances a syndicated bridge loan signed in December 1997. The smaller tranche will fund an employee share ownership plan.

Denmark ABN Amro and Crédit Lyonnais have launched general syndication of a Dkr2.4bn,10 year loan for Mobilix, the Danish telecoms subsidiary of France Télécom. The debt will be used for to expand the company's network. Finland

SOLE arranger UBS has signed and closed syndication of the £718m limited recourse financing for the UK's largest independent gas fired merchant power project -- the 1,200MW Saltend cogeneration plant. The deal is remarkable in demonstrating that there is a growing number of banks with credit committees willing to accept limited recourse merchant risk and also that there is appetite for subordinated project finance debt.

The banks and their roles in the $10.9bn debt facilities backing Texas Utilities' acquisition of the Energy Group are as folllows: Joint lead arrangers are Chase Manhattan, Lehman Brothers and Merrill Lynch International Bank.

Angola SG (New York) has arranged a $87m US Eximbank guaranteed loan for Halliburton Energy Services, a subsidiary of Halliburton Co of the US. Halliburton will use the loan to part finance development of the Cabinda concession, a project developing the Cabinda oilfield off the coast of Angola. The total financing is about $200m and will be secured by the proceeds of the oil sales through an escrow account.

Australia The A$85m loan for Signature Security Group launched by Toronto Dominion Bank in December 1997 is being restructured and re-syndicated. The original five year deal paid a margin of 275bp over bank bill swap rates.

Austria Arrangers Creditanstalt, HSBC and UBS have launched general syndication of the Asch7.5bn Connect Austria mobile telecoms project. The eight and a half year deal is split into two tranches. Tranche 'A' is a Asch6.5bn amortising term loan. Tranche 'B' is a Asch1bn revolving credit. The project is lightly leveraged with a debt to equity split of 60:40 and is priced at 100bp from the outset.

India Sumitomo Bank has been mandated as financial adviser for the 100MW Atria Power project in the state of Karnataka. Sumitomo will advise the sponsor, Atria Group, on raising around $20m in equity and $70m in debt.