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CREDIT SUISSE First Boston launched its Triangle Funding II collateralised loan obligation this week, but had to scrap the deal's intended five year series of tranches, and divert six subordinated tranches into the private placement market. CSFB cut the overall size of the deal from $3bn to $2.5bn. "Sentiment in the market has got worse since last week, and spreads are widening across the board, whether you look at senior credit card deals or straight investment grade bonds," said John Fleming, director of syndicate at CSFB in London. "Even though our deal, like UBS's, is delinked, there is a lot of anxiety about banks.

MORE DETAILS have emerged about JP Morgan's latest leveraged CLO, Bistro Trust 1998-4, launched late last week. The deal's $282.5m of public bonds comprised $127.5m of triple-A rated floaters paying 20bp over three month Libor and a Baa2 rated tranche. That piece divided into $95m of fixed rate bonds yielding 225bp over Treasuries with a coupon of 6.96% and $60m of floaters at 164bp over Libor. Maturity for the whole deal is September 2001.

* Paribas has added the first new transaction in over a year to its French domestic asset backed commercial paper conduit Thésée, with a Ffr500m facility for transport group Mory. The French company specialises in rapid delivery of parcels from 5kg to 2 tonnes, and has a turnover of Ffr2.5bn.

UK RETAIL finance company Paragon issued its third securitisation of the year this week, with a £181m deal that for the first time parcelled only Paragon's newly written mortgages. Paragon, formerly called National Home Loans, has altered its origination and underwriting practices since it ran into problems with high defaults after the UK's housing recession in the early 1990s.

In a credit contingent contract, payment is dependent on the occurrence of a certain credit event.

Malaysia Moody's Investors Services and Standard & Poor's downgraded Malaysia to just one notch above junk status this week, with Moody's dropping the sovereign's long term rating one notch from Baa2 to Baa3 and S&P by two notches from BB+ to BBB-.

Sanwa Bank will next week launch a ¥75bn ($556m) collateralised loan obligation, which breaks with the standard pattern for Japanese CLOs by securitising loans to Japanese corporates, and by primarily targeting Japanese investors. Cayman Islands special purpose vehicle Delphi Ltd will issue five series of Eurobonds, all maturing as bullets in March 2001. Lead manager Sanwa International will sell the ¥29.5bn class 'A1' floating rate notes to international investors with a rating of Aa1 from Moody's.

Ireland's First Active plc, the former First National Building Society recently converted to a bank, launched its third securitisation of Irish residential mortgages this week with a I£200m deal through Warburg Dillon Read. "As a bank, we no longer have to manage the ratio between share and deposit accounts that was a motive for securitising when we were a building society," said Tony Shanahan, deputy group managing director at First Active. "But securitisation allows us to free up capital and recycle the 25% liquidity we have to hold against our liabilities."

Fitch IBCA has downgraded several western banks due to concerns about their exposure to the Russian crisis. Others have been put on review with a negative outlook. Landesbank Rheinland-Pfalz's individual rating which assesses how the bank would be viewed if it were independent and could not rely on external support, has been downgraded from B/C to C in light of the bank's exposure to Russia and its low capital base. However, its triple-A long term rating was confirmed at AAA thanks to the state guarantee mechanism.

Morgan Stanley Dean Witter is poised to kick start Korea's stalled privatisation process with a sale of Korea Telecom shares that could raise around $600m. The move comes almost a year after a collapse of confidence in Korea stalled KT's last attempt at a global IPO. Both the company and the government are keen to complete the sale before the end of October and bankers said a research blackout will begin next Thursday, while filing with the SEC should be on September 27. Rival bankers said the sale might struggle in the face of continued market volatility.

Morgan Stanley Dean Witter has won the advisory mandate for the planned sale of Bangkok Metropolitan Bank and Siam City Bank, nationalised earlier this year, as the consolidation of the Thai banking sector continues apace. The factor which clinched the advisory role in the face of competition from Goldman Sachs, JP Morgan and Merrill Lynch was reportedly Morgan Stanley's willingness to cut its fee in the event of falling short on its promises.