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The Hong Kong dollar bond market has stood tall amid the carnage in Asian financial markets of the last few months. Despite a dramatic spike in short term interest rates as the territory's authorities battled (successfully) to defend the currency peg, new issuance has remained buoyant - with issuers attracted by the deep arbitrage opportunities and an increasingly broad range of investors drawn by the high returns on offer. To be sure, the Hong Kong debt market still has a long way to go if it is become a more consistent - and less fleeting - feature of the international capital markets. New issuers and investors are required, not least from China; a deeper commitment to market-making and liquidity is needed; and the range of market participants must broaden. But the market is starting to become more international in its reach. And, at a time when the development of Asian bond markets as an alternative to bank lending has never been more important, other Asian countries could do a lot worse than use Hong Kong's efficient and well run market as a model. Jackie Horne reports.

The recently established Hong Kong Mortgage Corporation will bring liquidity and innovation to the local capital markets and a new Hong Kong borrower to the international markets.

DRESDNER Kleinwort Benson's Silver Tower securitisation programme, which has been active for two years in the loan and private placement markets, will begin rated public funding next month with a DM2bn CLO for its parent bank. Dresdner has set up a Cayman Islands vehicle, Silver Tower Funding Ltd, which can issue Euro CP and Euro-MTNs. It has a Delaware subsidiary, Silver Tower US Funding LLC, to issue US CP.

THE US's second largest catalogue retailer, Fingerhut Companies, refinanced its portfolio of unsecured consumer loans this week in two $450m deals led by Chase Securities. Fingerhut, which has also securitised credit card receivables, last came to the market with its retail sales portfolio in 1994. The company sells household goods by mail order to some 30 million customers, typically middle aged and with low to middle incomes.

BANK Labouchere launched the second securitisation of retail share leases for its subsidiary Legio-Lease last Friday. At Dfl 1.2bn, Lease Assets Backed Securities II was three times as large as LABS I, launched in October. The larger size meant the rush for bonds was less spectacular than on that blow out deal, but the lead still comfortably placed all its paper.

SPANISH savings bank Caja de Ahorros del Mediterráneo this week issued a Pta25bn mortgage securitisation arranged by management company Titulización de Activos. TDA No 4 is the fourth deal from the company, owned by Bear Stearns, EBN Banco and six Spanish savings banks, including Caja del Mediterraneo.

* Belgium's Kredietbank is to launch its Bfr15bn debut mortgage securitisation today (Friday), through Deutsche Morgan Grenfell. The deal will comprise a single senior tranche, rated triple-A by Fitch IBCA and Moody's, and one junior piece. * European Mortgage Securitisations 2, ABN Amro's second parcelling of its own mortgages, is set for launch next week. The deal will offer triple-A rated tranches of Ffr1bn and Dfl 1bn, as well as a Ffr250m mezzanine rated single-A and triple-B rated Ffr50m junior tranche.

NOMURA'S groundbreaking principal finance group is in the midst of a shake up which could see up to 20 of its 70 staff depart, Euroweek has learnt. "We have been number one for a couple of years now," said a Nomura spokesman, "But it's not enough to be complacent."

UBS IS IN the final stages of preparing its second securitisation for UK buses to trains company Stagecoach. The £265m deal is backed by lease revenues from trains to be acquired by Porterbrook, the rolling stock company Stagecoach bought in 1996. That acquisition was financed with Rolling Stock Finance 1 and 2 - simultaneous deals totalling £545m, lead managed by UBS in October 1996. Whereas Rolling Stock Finance 1 parcelled government guaranteed leases, UBS entered territory with RSF 2, which was backed by unguaranteed leases.

UK RAIL operator Virgin Rail Group has invited bids to finance its £850m acquisition of new rolling stock. Last month Virgin named preferred bidders for design, build and maintain contracts for new high tech rolling stock to be used on its West Coast Main Line and Cross Country franchises.

A flexi-cap gives the holder the right to cap some but not all the period rates at a specified strike level over a given time span.

THE Kingdom of Thailand has raised to $4.5bn the amount of funds it intends to raise offshore during 1998, up from the $3bn it had pencilled in as late as last week. The 50% increase in the target reflects the inclusion of an overseas issuance programme for the Bank of Thailand's Financial Institutions Development Fund (FIDF), now under the Ministry of Finance's umbrella.