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BANK AUSTRIA this week priced its innovative partially funded securitisation of bonds from its investment book. Lead managed by Citibank and Salomon Smith Barney, the transaction achieves substantial regulatory capital relief for Bank Austria on $1.2bn of bonds originally bought by Creditanstalt, which merged with Bank Austria in September. "Bank Austria has no shortage of capital, but this deal is part of our strategy to ensure that we can develop the business while retaining more than adequate levels of capital," said Mark Bowles, senior director at Bank Austria in London. "We have very good skills as an ABS investor, and can originate this kind of assets effectively, but we want to reduce the capital they absorb."

IMPERIAL Tobacco, the UK's second largest cigarette manufacturer, last week executed an innovative £1.452bn securitisation to finance its peak stock requirements. Arranged by Greenwich NatWest, the deal is a rare example of four asset backed commercial paper conduits jointly financing a single securitisation.

SHAREHOLDERS of Marston, Thompson and Evershed, the UK brewer that had planned to securitise 569 of its tenanted pubs through a £155m deal led by Nomura International, this week met to approve the deal -- but voted to adjourn their extraordinary general meeting. Marston's management recommended that shareholders take this course, to give them more time to consider the relative merits of the securitisation and a hostile takeover bid from Wolverhampton & Dudley Breweries.

COMMERCIAL Guaranty Assurance, a monoline insurer created in 1997 to focus on the commercial real estate market, launched the first public transaction from its $2bn Euro-MTN programme this week, with a deal of up to Eu100m lead managed by IMI Luxembourg and Merrill Lynch. Issued at 101.25 and re-offered at 99.75, the 10 year bond carries a 5% coupon until January 2000 -- then the coupon switches to 80% of the 10 year constant maturity swap with a floor of 4%. (See bonds section for market commentary on the deal.)

* A string of blow-out deals set the US asset backed markets on track for recovery this week. Commonwealth Edison priced its $3.4bn stranded cost deal last Friday through Goldman Sachs (books), Merrill Lynch and Salomon Smith Barney, and ended up several times oversubscribed.

RABOBANK quietly executed a $7.2bn collateralised loan obligation in late October. Atlantis Finance Two used a similar structure to Rabobank's first CLO. That deal transferred $5.5bn of exposure to corporate loans from Rabobank's Utrecht headquarters in December 1997. The bank set up a special purpose vehicle, Atlantis Finance, that issued $5bn of senior notes, rated AA- by Fitch IBCA and $500m of BBB rated junior bonds.

Though Indian entities are acquiring a greater awareness of hedging instruments for exchange rate and interest rate exposures, an active derivatives market has yet to develop.

THE EXPORT Import Bank of Korea (Kexim) is preparing to make its first foray of the year into the public bond markets with its long awaited securitisation of promissory notes. The Ba2/BB+ rated bank is hoping to launch the deal, which was originally mandated to Warburg Dillon Read, before the end of the year and possibly towards the end of next week.

THE FIRST Asian sovereign transaction to emerge from the raft of recent aid initiatives for the region is set for launch at the end of next week, pending the completion of final documentation. The ¥30bn ($500m) Euroyen transaction for the Federation of Malaysia -- backed by Japan's Ministry of Trade and Industry (MITI) -- will be the first bond issue to come under the $30bn Miyazawa plan and only the second time this decade that the sovereign has come to the international bond markets in its own name.