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As the broader rally in corporate spreads continues the primary market in corporate debt has returned from the grave in the past week with over $13 billion of deals finding their way into the ready hands of investors and several billion more slated to come before the end of the month. Even with this late surge of issuance, volume for the full month of August will remain light ($25-30 billion) compared to the deluge of supply we were experiencing earlier this year but the latest deals provide a stark contrast to the frozen state of the market in July. Much of the recent buoyancy has been attributed to the passing of the relatively uneventful passing of the August 14 SEC sign-off deadline and although the impact of this is clear, there are other reasons as well for the stronger tone in the market. In particular, the recent vibes from the equity market have been supportive with month-to-date gains in the major indices (Dow +5.3%, S&P500 +7.3%, NASDAQ +10.1%) and a substantial drop in implied volatility levels.

Wells Fargo will expand its recently established European securitization services team in the coming months. Ian Hancock, v.p. and head of the London office, says the firm will seek to add between two and four analysts to its securitization transaction management team depending on how quickly the business grows. Hancock joined Wells Fargo in April from Bank One and opened the London office in May. The team focuses on portfolio administration for mortgage-backed deals and collateralized debt obligations.

Barclays Capital has hired Michael Keeley from Dresdner Kleinwort Wasserstein to join its structured capital markets group in London, which aids corporates seeking tax-efficient structuring. Keeley will report to Roger Jenkins, head of structured capital markets. Jenkins referred calls to the press office and Keeley could not be reached. Rowan Staines, spokeswoman at DrKW, and Caroline Rouse, spokeswoman at Barclays, both declined comment.

Terence Tsang, managing director and head of Asia Pacific debt markets at Merrill Lynch in Hong Kong, has resigned. Bob Sherbin, spokesman, said Antony Hung, head of the investor and issuer client groups in Hong Kong, has replaced Tsang. In recent months Hung was appointed as Asia Pacific head of the issuer client group, as the former head, Richard Stoddard, moved to a new role at Merrill in New York. "Hung's a rising star over there," said a market official, adding, "Now he's running the show." Hung was traveling and could not be reached.

Nea Capital is planning to launch its first hedge fund before year end and is currently looking for a prime broker. The fund, called Nea Capital Diversified Strategies, will be an equity market neutral fund and use options, said Michael Hanes, portfolio manager and trader. The London-based firm is currently negotiating with Barclays Capital, Deutsche Bank, UBS Warburg, Morgan Stanley and Bear Stearns as possible choices for a prime broker and will make a decision next month.

Qantas has secured A$600m in an institutional offer jointly underwritten by lead managers Macquarie Bank, Citigroup/SSB and UBS Warburg. The deal uses the new accelerated rights issue technology pioneered in last year's deals from Adsteam Marine and Macquarie Infrastructure Group.

Standard & Poor's (S&P) upgraded Malaysia's long term foreign currency rating from BBB to BBB+ on Saturday, underpinning the market's hopes that there will be a new flow of issuance from the country in the coming months. As reported last week (see EuroWeek 766), the agency had been considering improving Malaysia's rating as a result of the country's strengthening economy, restructuring efforts and strong external debt positions.

Australia Westpac Banking Corp will shortly embark on an Asian roadshow to update regional investors about its recent performance and strategy.

Wesfarmers launched its debut A$250m debut issue to a robust investor reception on Wednesday, taking advantage of a lacklustre Australian primary market. The conglomerate is already a darling of the equity market, but it proved itself to be a strong bond issuer too as investors flocked to buy up the debut transaction.

The Kingdom of Thailand's plans to launch a new benchmark dollar bond gained momentum this week when Standard & Poor's raised the outlook of the country's BBB- long term foreign currency rating outlook from stable to positive. The change is timely as the sovereign has only recently finished receiving bids for a potential $800m-$1bn new dollar bond. If the deal goes ahead, it will be the kingdom's first public dollar issue since 1997.

Carl Icahn's High River Limited Partnership has offered to buy all of XO Communications' outstanding senior secured bank debt at a price of 50, according to a memo obtained by LMW. The new offer is at a price 20 cents lower than Icahn's last offer, but Icahn is now offering to buy all of the bank debt instead of just one-third of it, which is what he had been after. As first reported last week on LMW's Web site, the deadline for the new offer is 5 p.m. tomorrow. Icahn could not be reached by press time.

Lenders are increasingly using credit default swaps to gain exposure to investment-grade loans, forgoing traditional participation in the primary market. Selling protection essentially gives the seller the same credit risk as direct participation in the loan, but the premium on the protection far outweighs the skinny pricing on investment-grade loans. Banks hurt by recent events in the investment-grade market are now looking at the same risk with better return, and LIBOR plus 12.5 basis points just doesn't add up.