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Over the past year a succession of new or rare Korean credits have graced the international markets, underlining the hope that Korea will cement its role as a high profile source of high quality borrowers in the Asian debt markets. Observers believe that corporates can take advantage of this year's economic rebound to diversify their funding, using the international bond market to raise financing. But officials warn that the liquidity of domestic demand and a continued oversupply in many industries leaves little incentive for Korean issuers to look offshore. Richard Morrow reports on the market expectations for the Korean international bond market.

Over the past year, the Republic of Korea has weathered the economic slowdown and achieved a high degree of success with its restructuring programme. And with a positive economic outlook, the country is much closer to solving its remaining corporate and financial difficulties.

Korea's domestic bond market is in rude health. With the country's economy recovering, optimism is high that the next year will see investor demand increase and dealflow improve. In the past, investors tended to view the corporate market as a sideline of the main Treasury bond market. But as yields in T-bonds during last year fell to historic lows of 5% or under, investors have started to look for yield in other areas, namely the corporate market. Richard Morrow reports on what should be a benchmark year in Korea's domestic markets.

Global Crossing's bank debt experienced significant movement this week with more than $20 million changing hands in the 20-23 range as credit holders weighed the value of new bids for the bankrupt telecom. A $10 million piece traded at 22 1/2 early in the week, but traders said $5 million pieces had been moving all week. Market players debate takeover bids for the name and the value of the company's assets in the case of liquidation. Last week FleetBoston Financial filed a proposal stating that liquidation was its preference. That's the general sense among lenders, who stand to do better in liquidation than any other creditors.

The $650 million term loan "B" on Goldman Sachs' and Citibank's $1.2 billion credit for SC Johnson Wax has been fully subscribed after launching last week in New York and London. The "B" contains a $100 million Euro tranche, and depending on the level of European demand this could be upsized to $200 million, said a banker. The pro rata has snared a handful of banks for the $550 million pro rata and this is said to be progressing smoothly.

Kmart's $2 billion debtor-in-possession facility jumped into the market this week as $25-35 million traded in the 101 3/4 to 101 1/4 range. Dealers said J.P. Morgan was selling and that both dealers and institutional players were among the buyers. A J.P. Morgan spokesman declined to comment. One trader attributed the popularity of the paper to the asset-backed nature and attractive coupon on the deal. "It's a no brainer," he said. J.P. Morgan, Fleet Retail Finance, Credit Suisse First Boston and General Electric Capital Corp. led the deal, which includes a $200 million institutional piece. The name's original $1.5 billion credit facility took a back seat to its younger cousin. Dealers said the name scarcely traded in the mid-60s. Calls to John McDonald, executive v.p. and cfo of Kmart, were referred to a spokesman did not return calls by press time.

Mishawaka, Ind.-based National Steel has been provided in principle with a $450 million DIP facility by a group of lenders after filing for Chapter 11. Terry Fahn, a spokesman for National Steel, said Citicorp, CIT Group, Heller Financial, Fleet Capital, GMAC and Fuji Bank are among the lending group. The banks are part of the pre-petition facility, he added. Hisashi Tanaka, Chairman and ceo, said in a statement that the "historically low steel prices and a weak economy impeded the company's ability to service its debt and make investments in the business necessary for continued growth."

On the run names Adelphia Communications, Charter Communications, and Nextel Communications, firmed up this week on positive market sentiment echoing reports of economic growth and stronger equity and bond markets. Adelphia's term loan "B" ticked up from a 99 1/2 street trade last week as $5-10 million traded in the 99 1/8 to 99 7/8 range. Roughly $10 million of Charter's "B" term loan traded in 97 3/8 to 97 5/8 range compared the 96 1/2 range three weeks ago. And Nextel's bank debt also revived as $60 million traded up to the 86 range at week's end with $2.5 million pieces trading at 85 1/8 and 85 5/8 by midweek.

Société Générale have landed the lead role on two bank deals for the Pittsburgh Penguins of the National Hockey League and the National Basketball Association's Charlotte Hornets, the first deals being led by SG since the departure of Sal Galatioto and his sports advisory group to Lehman Brothers last year. Randy Campbell replaced Galatioto last year from Morgan Stanley to re-launch the sports advisory group.

UBS Warburg plans to soon expand its foreign exchange options trading Web site to include pricing and trading exotic options, said Ed Hulina, head of marketing for fx in London. "Now it's able to trade standard options but it will be soon able to trade basic knockouts and knock-ins," he said. Investors can now use the tool, dubbed the FX Options Trader, to calculate prices and place trades in vanilla options through the firm's Web site. UBS is expanding the variables that can be incorporated in the trading portal now because of client demand and as more business is shifted toward the portal. This allows UBS to concentrate its sales force on more complex structured products, according to Hulina.