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* KfW International Finance

EARLY indications that appetite for Rexam debt has been strong have prompted observers to speculate that the deal is benefiting from a quiet syndicated loan market. The Eu550m deal was launched into the market two weeks ago and many bankers had feared for its safety in retail. But the dearth of deals in the market since the beginning of the year has, say some bankers, increased the financing's profile.

The birth of the euro has provided a powerful new boost for the already buoyant European equity-linked debt market, which is enjoying unprecedented growth and development. With interest rates low and stockmarkets high, a growing range of companies — from the blue chip and, increasingly, from the high growth sectors — are queuing up to issue equity-related finance and the investor base is expanding all the time. Now, with a single currency, deals can be done in size and with a frequency that is fast establishing European equity-linked debt as an asset class in its own right. And with the twin themes of corporate restructuring and shareholder value likely to dominate Europe’s financial markets for some while yet, the emergence of an increasingly deep, liquid and diverse equity-linked debt market in Europe looks like being a major feature in the development of the pan-European capital market. Rosie Shepperd reports.

Finland Finnair had quietly signed a $250m facility arranged by BNP (also the agent), Commerzbank, ING, Landesbank Kiel, and Paribas. The borrower is the Finnish national airline and is using the facility to buy Airbus aircraft, to be delivered over the next two years.

The Republic of Slovenia tested investor sentiment toward central and eastern Europe last Friday with the launch of a tightly priced Eu400m 10 year issue. Lead managed by Credit Suisse First Boston and Morgan Stanley, the A3/A rated transaction featured a 4.875% coupon to give a margin of just 86bp over the 3.75% January 2009 Bund at the issue/ fixed re-offer price of 99.165.

* Commerzbank SA

Salomon Smith Barney has launched the $325m sale of stock in Christiania Bank. The Norwegian government will sell 16% of the bank's equity to bring its ownership down from 51% to 35% through the divestment of 90m ordinary shares. Salomon is keen to execute the deal quickly and will price the shares at the end of next week. Although the local market looks strong, increasing stockmarket volatility is damaging investors' confidence in the long term prospects for equity investment. In these conditions, swiftly executed deals will be the safest way to ensure successful equity offerings.

Action in the swaps market this week was dominated by the continuing multitude of new issues in the euro bond market, although arbitrage in the dollar market showed signs of returning. By Thursday, 10 year dollar swap spreads were at a mid-market of about 77bp, a couple of basis points wider than the close last week. This opened some arbitrage opportunities for borrowers of dollars, but there were few issuers looking to step into the market. Japanese entertainment group Sony is poised to bring a $1bn 10 year global, a deal which is highly likely to be swapped.

Corporate credits continue to fill the pipeline of new issues in the coming weeks in both the euro and the dollar sectors, with investors' hunger for telecoms paper set to be satisfied by a host of jumbo issues from the market's hottest sector. AT&T is at the forefront of most syndicate managers' minds, with roadshows set to begin on Monday for its jumbo bond financing. AT&T and its lead managers Merrill Lynch and Salomon Smith Barney will spend three days with investors in Europe before heading to the US. Its multi-tranche issue, which is likely to comprise short, intermediate and long term tranches, should be launched the following week.

* Bank Nederlandse Gemeenten NV

GLOBAL co-ordinator Enskilda Securities has launched the sale of stock in Teleste, the Finnish supplier of cable network equipment. The lead manager, taking advantage of the fact that institutions have comparatively few holdings in this sector, is marketing the shares to local and international equity investors with a view to completing the sale in two weeks' time.

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