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A chapter by Westpac Institutional Bank

Dealogic's league tables provide a snapshot of 2002. Find out which banks reigned supreme last year in terms of volume of deals.

Business travellers are sticking with the names they know and trust in Asia. The Ritz-Carlton Millenia in Singapore, the Oriental in Bangkok and the Peninsula in Hong Kong again rank as Asia's finest hotels, and Singapore Airlines continues to rule the skies. Poll research and story by Olivia Chow and Robert Law.

March 2003

Despite the general economic malaise, optimism abounds in the European real estate market - and for good reason: growth remains positive, research is improving all the time, depreciation is now factored in effectively, restrictions on excessive developments are in place, controlled inflation is central to government policy, and the capital markets have become a key provider of not only policy but also discipline.

Aareal Bank's Eu1.47bn Global Commercial One deal provides a talking point for German market watchers: it had a distinctive structure and an unusually diverse portfolio. The bank hopes to use the Global model again soon, only this time without the interest sub-participation allowance. How will the disappearance of this concession affect Aareal's plans, and those of other German issuers? For the most graphically illustrative example of Aareal Bank's buy and sell strategy, look no further than Global Commercial One, a Eu1.47bn synthetic securitisation of a portfolio of US and European commercial mortgages.

In 2001, Depfa Bank's securitisation of commercial mortgages on top hotels set a standard for deals in the sector. Those assets have held up relatively well, and a new portfolio is being prepared by Aareal Bank. The problem is, with the Iraq war under way and the global economy stalling, it isn't at all clear that the industry is robust enough for the deal's successor, Global Hotal Two. Henrik Bartl, head of Aareal's hotel financing team, discusses the waiting game. Given today's prevailing global macroeconomic and geopolitical climate, investors scarcely needed Moody's to remind them, in mid-February, that the hotel industry remained in poor shape. "Despite an initial improvement in occupancy rates and an upturn in travel in the first half of 2002, the plight of European hotels has subsequently worsened due to the geopolitical situation, the continuing economic situation, terrorist risk and the consequent contraction in the global travel business," Moody's commented.

With FDI levels still lagging far behind neighbouring China, the news of BP's record-breaking $6.75bn merger with TNK is doubly welcome. Will the news be enough to kick-start greater FDI inflows into Russia? Kathryn Wells reports. One swallow may not make a summer, as the saying goes, but then few swallows are as valuable as the $6.75bn merger recently announced between Russia's Tyumen Oil Company (TNK) and BP, Europe's second largest oil company.

Bankers are preparing themselves for an explosion in the CMBS market, as signs point to a fast-broadening investor base. And, as European buyers grow more sophisticated and add to their credit expertise, demand for asset backed securities, particularly commercial mortgage ones, is building. An assessment of the size of the cash investor base for CMBS in Europe cannot simply be based on the absolute size of the market, much of which is accounted for by writers of credit default swaps such as US monoline insurance companies.

It is fitting that the last to be announced should be the most sought- after award of all - the Star of Leak Table award for press exposure.

Another year, another covered bond market. While that may not be strictly true - on average, a new market appears roughly every two years - the opening of the Irish market by Depfa in February could easily have been dismissed as merely another variant on of a centuries old theme under the shadow of more weighty events elsewhere. However, a veteran of the international markets, Depfa made sure that its entrance could not be ignored. Neil Day reports. Depfa launched its Eu3bn minimum five year landmark at the end of February via Credit Suisse First Boston, Deutsche Bank and Morgan Stanley. Strong demand for the Irish debut and a Eu5bn book enabled the issuer to increase the size to Eu4bn at a re-offer of 4bp over swaps.

Land Nordrhein Westfalen set up its programme late last year but has won the respect of its dealers with an innovative and flexible issuance strategy. Jonathan Sibun reports on how Nordrhein Westfalen became the EuroWeek New Borrower of the Year 2002.