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With only four months left in 2002, lending banks are running out of time to meet budgets for the year. With volumes in the European loan market heavily down on last year, some banks are hoping that the Eu16bn of leveraged loans to be syndicated in September will provide a buying opportunity when that debt hits the secondary loan market. Banks which do not have the resources to buy big pro rata tickets of leveraged loans offered in primary syndication, will have the opportunity to buy small pieces of the high yielding assets in the secondary market to help fill gaps in their budgets.

Amount: A$400m Legal maturity: September 18, 2028

Mandated arranger Bank of Tokyo-Mitsubishi has signed banks into the $150m multi-tranche facility for the Central Bank of the Republic of Seychelles. Barclays Bank and Standard Chartered have joined as lead arrangers. Belgolaise Bank and Mauritius Commercial Bank have joined as arrangers and Nouvobanq as a co-arranger. Alpha Bank has joined as a lead manager and African Export-Import Bank as a manager. Co-managers are Banque Inter-nationale des Mascareignes, Banque Misr and Habib Allied International Bank.

EuroWeek hears that the UK Ministry of Defence's £1.6bn Skynet 5 satellite communications project will be financed by a £1.05bn credit facility. BNP Paribas, CIBC World Markets and HSBC, which were considering a wrapped bond financing, have instead opted to arrange a bank loan.

The first mandate from a Slovakian financial institution since 1999 was awarded this week. EuroWeek understands that Vseobecna Uverova Banka (VUB) has awarded the mandate to arrange its Eu50m-Eu60m five year facility to Raiffeisen Zentralbank Oesterreich (RZB) which will be sole mandated arranger for the facility - the bank's first for six years.

Sole mandated arranger Sumitomo will close syndication of the Eu97m five year facility for Slovak Telekom at the end of August. The deal has been well received and an oversubscription is expected. The facility carries an EIB guarantee and pays a margin of 85bp over Libor. Two levels of participation are on offer: lead arranger for a take of Eu15m for a ticket of 75bp; and arranger for a ticket of Eu10m for a fee of 65bp.

Nova Ljubljanska banka has returned to the market to secure a Eu50m-Eu60m facility. A small number of banks have been invited to bid for the mandate, which will be awarded in the next two weeks. The borrower last tapped the market in October 2001 with a Eu100m five year term loan. Bank Austria Creditanstalt, ING, Crédit Lyonnais and Mizuho were mandated arrangers for that deal which paid a margin of 30bp over Euribor and amortised in 10 semi-annual repayments. The mandate to arrange the Eu50m five year facility for Slovenia Export Corporation (SID) has been awarded to Bank Austria, Citigroup/SSSB, Sumitomo (bookrunner) and WestLB.

Volkswagen Financial Services, the finance arm of the German car maker, this week tapped the UK ABS market for the first time with a £600m securitisation of auto loan and lease receivables through its UK subsidiary. Lead managed by RBS Financial Markets, the deal was funded through the bank's multi-seller conduit TAGS (A-1/P-1), which issued the first batch of monthly CP for the deal on Tuesday. The transaction is thought to be the largest UK auto receivable securitisation to date.

NIB Capital Bank this week launched the first synthetic securitisation of shipping loans, a $663m transaction lead managed by Merrill Lynch and NIB Capital. Deals backed by transport are rare and this one could pave the way for further shipping companies to use the technique for capital relief. Securitisations of big ticket leases are often hindered by the process of transferring the assets to an SPV. By using a synthetic structure the arranger avoids such complications.

The Australian structured finance market has continued to be active while most of Europe slumbers through August. Bank of Queensland this week launched its ninth domestic residential mortgage securitisation, a A$400m deal lead managed and arranged by Macquarie Bank. Series 2002-2 REDS Trust offered three tranches of notes rated by Fitch and Standard & Poor's. A A$110m triple-A tranche was priced at 26bp over one month bank bills with an average life of 0.8 years. A second triple-A layer came at 36bp with a 3.91 year average life.

German banks threatened by future regulatory changes are looking to third party investors to take the first loss layer of risk in synthetic mortgage transactions. German synthetic securitisations usually incorporate a sub-participation feature, designed to allow the originator to retain the first loss risk without attracting heavy regulatory capital charges.