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Rating: A2/A- Amount: Eu450m (increased 13/11/02 from Eu300m)

Rating: A1/A- Amount: Eu200m lower tier two capital

Fintech, a South African office equipment financier, this week reinforced the growing popularity of securitisation in South Africa by launching a R653m ($66.4m) deal backed by office equipment leases, lead managed by JP Morgan. Fintech is part of a small but growing number of domestic corporate issuers to emerge since a regulatory change in December 2001 broadened the existing framework to allow corporates to issue asset backed securities. The deal provides the funding for a wider corporate restructuring, allowing Fintech's management and Genbel Securities to acquire 66% of the business. Altron, the company's previous owner, will retain a one-third share in the business, as well as the equity in the securitisation vehicle through a R27m subordinated tranche.

Well known Dutch issuer SNS bank is returning to the market before the end of the year. ABN Amro and JP Morgan have started roadshows for Hermes V, the fifth securitisation of residential mortgages from the programme. The Eu1.1bn transaction comprises three tranches of notes with a legal maturity of October 2034. A Eu1.02bn triple-A tranche has an average life of 5.33 years. An Eu62.5m single-A tranche and Eu17.5m triple-B layer have average lives of 8.17 years. Coupons step up in January 2011.

KBC Financial Products this week closed its second managed synthetic collateralised debt obligation, a Eu1bn transaction led by joint bookrunners HSBC and KBC Bank. The deal, called Broad Street Finance plc, was similar in structure to the group's first transaction, the Eu1.3bn Finsbury Finance this June. It offers exposure to US and European corporate bonds and loans.

Portuguese assets made a welcome return to the asset backed market as Banco Comercial Português (BCP), one of Portugal's leading private banks, closed a Eu320m securitisation of unsecured consumer loans. Lead managed by BNP Paribas with BCP Investimento, Nova Finance 3 follows a modest quarter in the Portuguese loan ABS market with just one deal launching, Banco Mais' Eu100m BMORE tap in September.

The European structured finance market struggled this week under the weight of deals waiting to be launched before the end of the year. Investors and bankers have begun to voice concerns about the volume of paper that will need to be absorbed. "It is very crowded and this will have an impact on deals getting out - it is a buyer's market," said one London-based syndicate official. "Nobody wants to go into year end significantly long on primary but you have to be level headed about it."

ABN Amro, Banca Nazionale del Lavoro, Citigroup/SSSB and JP Morgan have begun marketing a Eu6.6bn securitisation for the Republic of Italy, one of the largest ever transactions in the European structured finance market. Originally mandated in early summer, the deal was expected to total around Eu3bn, but was doubled after a ruling by the European Union's statistics arm Eurostat forced Italy to reconsolidate the previous SCIP deal, worth Eu2.3bn.

ABN Amro this week brought an unusual mortgage pool to the securitisation market with the launch of a Eu217m transaction backed by loans originated by the Municipality of the Hague. Most of the borrowers are civil servants, offering investors unique exposure to strong collateral. The transaction was in the market for a short period as investors snapped up a unique opportunity.

Salomon Smith Barney was rumored to have traded $20 million of WorldCom bank debt this week with the paper jumping from the low teens into the 22 1/2 to 23 1/2 range. This follows the release of promising numbers in its latest monthly operating report, including EBITDA of $416 million. One trader noted that recent reports indicating that the company would be sold at the end of the bankruptcy process have also contributed to the boost. "If you do the math, the recovery value could be as high as 60," he said. Calls to WorldCom were not returned by press time.

Market professionals in Australia are furious over the government's proposal to buy back its debt, fearing the damage it will do to the interest rate swaps market. At first sight proposing that swaps become the risk-free benchmark looks like a gift for the instruments, but market professionals warn that removing the underlying liquidity could damage the AUD2.6 billion (USD1.46 billion) swaps industry.

Bank of China International, the investment banking arm of the Bank of China, has recently begun trading and marketing equity derivatives. "We've launched our Hong Kong platform," said Warren Kwan, head of equity derivatives in Hong Kong.