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XO Communications' bank debt shot up 10 points to the 68-70 range last week after its bank group agreed not to press default measures agreed upon in a December 2001 forbearance agreement. Dealers said only small pieces of the paper traded up from the 58-60 range where it had been quoted since the end of March. The forbearance agreement gave the company breathing room until April 15. After that date, lenders could have demanded immediate repayment of the debt and attempted to seize the company's assets. The company is still working with its creditors towards an acceptable balance sheet recapitalization.

The investment grade calendar trickled to just $4.5 billion for the week as the market was still very heavy from the active calendar in March and early April. The pattern of issuance has showed all the signs of late-cycle borrowing, with Yankees (South Africa for $1 billion, Chile for $600 million) accessing the market and the average deal size for the week dropping to just under $350 million, the lowest level since the market turmoil of early February. As is typical of this stage in the borrowing cycle, the high yield calendar has also now heated up, with about 11 junk deals priced for a total new issue volume of $2.5 billion. The weighted average rating for all borrowings for the week was BBB flat, the lowest reading since the onslaught of junk issuance in late 2001.

The investment grade calendar trickled to just $4.5 billion for the week as the market was still very heavy from the active calendar in March and early April. The pattern of issuance has showed all the signs of late-cycle borrowing, with Yankees (South Africa for $1 billion, Chile for $600 million) accessing the market and the average deal size for the week dropping to just under $350 million, the lowest level since the market turmoil of early February. As is typical of this stage in the borrowing cycle, the high yield calendar has also now heated up, with about 11 junk deals priced for a total new issue volume of $2.5 billion. The weighted average rating for all borrowings for the week was BBB flat, the lowest reading since the onslaught of junk issuance in late 2001.

Citic Ka Wah Bank asked Standard & Poor's (S&P) to withdraw its BBB senior debt and BBB- subordinated bond ratings this week, despite its plans to launch a $250m upper tier two perpetual debt issue. The move came as a surprise to the market, as the bank had been expected to launch the deal imminently. HSBC, ICBC and UBS Warburg are the three joint lead managers for the transaction.

CLP Power is looking to end an absence of Hong Kong credits from the international bond markets with the launch of a roadshow for a planned $300m 10 year Reg S transaction next week. The new issue will be the privately owned corporate's first international bond in six years. Given a dearth of recent issuance from Hong Kong and with regional investors clamouring for more deals, the timing of CLP Power's return to the market looks ideal.

China China's GDP grew 7.6% in the first quarter of this year as a result of improved investments and exports. This compares with growth of 6.6% in the first quarter of 2001.

Hutchison Telecommunications (Australia) has dominated a quiet week in the Australian equity capital markets, with the announcement of its plan to sell a $600m five year convertible bond with an unusually high conversion premium of 60%. The paper will carry a 5.5% coupon and is being launched to help fund the development of the company's high speed wireless internet network.

Origin Energy and Telstra are both aiming to take advantage of the quiet Australian fixed income markets and strong investor appetite by launching new bond issues. Origin Energy will be first to market, having already concluded a roadshow for its debut deal. The Australian oil and energy producer is looking to launch a A$150m five year transaction next week. National Australia Bank (NAB) and Citigroup/SSB are joint lead- managing the issue for the BBB+ rated corporate.

China The popularity of new issues in China among local investors seems to grow week by week. Shares in Cosco Shipping, a unit of China's premier shipping company, rose by more than 75% yesterday (Thursday) on their debut in Shanghai.

Compiled by Holger Kron Deutsche Bank, Frankfurt

Rating: Aaa/AAA Amount: Eu500m

Chile this week became the first Latin American issuer to price a dual currency global bond when it launched $600m five year and Eu300m three year transactions. The deal was originally marketed as a $500m five year dollar bond only, but during the European roadshow underwriters Citigroup/SSSB and Deutsche Bank found enough demand from cross-over accounts with euro-denominated portfolios to warrant an additional three year euro tranche.