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UK non-conforming mortgage lender Kensington Mortgage Co returned to the asset backed markets this week with a £150m deal lead managed by Morgan Stanley Dean Witter. Residential Mortgage Securities No 5 followed the innovative template Kensington established in June last year with RMS 4, by creating separate, tradable securities from every scrap of cashflow in the structure.

Fuji Bank launched the first securitisation of consumer loans by a Japanese bank this week, as Paribas and Fuji International Finance sold Eu230m of triple-A rated bonds in the Euromarkets. The transaction is one of the first to use Japan's new Perfection Law, enacted last autumn to allow true sales of assets regulated by the Ministry of Finance. The law could do much to ease securitisation for Japanese banks, which have so far struggled with the civil code requirement to notify obligors if assets are to be truly sold.

Last week's Learning Curve covered the fact that volatilities given by some data providers can not be taken at face value but have to be transformed to the required reference or accounting currency.

THE ASIAN Development Bank (ADB) launched its first major debt transaction of the year this week in an opportunistic bid to maximise recent spread contraction. ADB head of funding Peter Balon said that the main aim of the new $500m three year issue was to accelerate a tightening of spreads which has seen the bank's benchmark 2003 bond come down from 70bp over Treasuries at January 22, to a trading level of around 58bp yesterday (Thursday).

THE EXPORT-Import Bank of Japan led the return of the country's government guaranteed issuers to the international debt markets this week by launching $1bn of five year floating rate notes. Jexim's blow-out deal provided the first ray of light for Japan's beleaguered borrowers in months. The financial, economic and political weaknesses of Japan's credit led to a sharp repricing of Japanese government guaranteed issuers (JGGIs) throughout 1998, and culminated in the year end loss of the country's Aaa rating from Moody's.

THE INDEPENDENT State of Papua New Guinea (PNG) has appointed JP Morgan and Warburg Dillon Read as lead managers of a debut international bond offering. Having recently been assigned a B+/B1 rating, the government aims to raise $250m from a five year deal scheduled for a late second quarter launch.

WARBURG Dillon Read succumbed to market volatility and reduced Taiwan's Delta Electronics seven year convertible to $100m from $120m this week. Allocation was said to be tight despite market suggestions that some of the deal remained on the bank's books. Some syndicate bankers had been sceptical of the selling points of the new issue when contrasted with an outstanding CB yielding around 250bp over Treasuries, compared to the 75bp over Treasuries offered at year three and the 125bp over Treasuries offered at year five for the new issue.

China Euroweek incorrectly attributed Shanghai Matsuoka's 'B' share placement to Shenyin & Wanggua Securities. Nomura was lead manager for the 110m share issue which raised around $30m. The IPO is the only share debut offering to be completed from China this year.

THE INDIAN privatisation saga took off in the right direction this week with the completion of Videsh Sanchar Nigam Ltd's (VSNL) secondary GDR sale which raised $161m, albeit at a considerably lower price than expected. A total of 17.4m GDRs were sold at $9.25 -- a discount of 3.9% from Wednesday's close of $9.625 -- by global co-ordinators Credit Suisse First Boston and Salomon Smith Barney. Bankers said the most important achievement had been to convince the government to accept market pricing for the sale. As the GDR price fell below the psychologically important $10 level, there had been concerns that the government would insist on a price floor.

MERRILL Lynch held roadshows in Hong Kong and across Europe this week for the $575m commercial property securitisation by Wharf (Holdings) Ltd, one of Hong Kong's leading property companies. Merrill's salesforce will move to North America next week, and the bank expects to price the deal at the end of February.

COMMONWEALTH Bank of Australia this week launched a new product designed to offer the benefits of the swap market to investors whose internal rules forbid them engaging in swaps. The Coupon TIC is named after an existing product, the Transferable Investment Certificate, which CBA created for investors reluctant to buy zero coupon bonds for tax reasons.

Australia's fast-growing domestic corporate bond market gained another new name this week with a debut issue from Case Credit Australia, a finance subsidiary of farm equipment group Case Corporation of the US. The A$175m two tranche issue was launched under the borrower's A$1bn CP and MTN programme. Salomon Smith Barney was sole lead manager, with National Australia Bank acting as co-manager.