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12066

LEBANON'S BANQUE du Liban et d'Outre-Mer (BLOM) this week became only the second Middle Eastern credit to issue subordinated debt in the international bond markets when it launched a $75m eight year bullet transaction via SBC Warburg Dillon Read. With a 9% headline coupon, BLOM's debut Euromarket issue was priced to yield 300bp over Treasuries at the issue/fixed re-offer price of 99.517. This represented a 25bp-30bp pick-up over the first subordinated transaction from the region -- the $75m 10 year non-call five issue for Lebanon's Banque Audi launched in mid-October via Merrill Lynch, which this week was trading at 255bp/250bp over Treasuries to its five year call.

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THE ESTONIAN Compensation Fund (ECF) tapped the international bond markets for the first time this week, launching a DM30m two year floating rate note via Salomon Smith Barney. The transaction was priced to yield 110bp over three month Deutschmark Libor on an issue price of par. ECF bucked the trend of Estonian issuers fighting shy of bond issuance since the outbreak of spread volatility in emerging market debt at the end of October.

BANKERS REPORTED a strong retail and institutional bid returning to the dollar market this week as investors selectively picked up bonds either on an asset swap or value basis. This considerable buying provided a much needed lightening of lead managers' heavy inventories, and created a much healthier new issue environment. Credit spreads in both the five and 10 year sectors have tightened by as much as 10bp, and swap spreads by 2bp.

THE SUCCESSFUL completion of a $358m GDR offering by India's Mahanagar Telephone Nigam Ltd (MTNL) this week defied the spillover from the Asian currency crisis and the country's troubled political scene, providing fresh impetus to its notoriously slow privatisation programme.

THE SUCCESSFUL completion of a $358m GDR offering by India's Mahanagar Telephone Nigam Ltd (MTNL) this week defied the spillover from the Asian currency crisis and the country's troubled political scene, providing fresh impetus to its notoriously slow privatisation programme. Many bankers had expected the deal to be withdrawn after a proposed $700m offering from the Gas Authority of India (Gail) failed to make it to the market in early November.

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BOTSWANA'S first ever bond -- a Pula50m ($13.5m) seven year issue for Botswana Development Corporation -- received an enthusiastic reception from domestic investors this week, closing nearly 50% oversubscribed. Priced to yield 14% semi-annually, the transaction offered a 220bp pick-up over 12 month Bank of Botswana certificates yielding 11.80% on an equivalent basis.