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Another hurdle was cleared yesterday (Thursday) on the slippery path to commercial and financial close for the London Underground Public-Private Partnership scheme. Stephen Byers, the UK's transport secretary, announced in the House of Commons late yesterday that the government would proceed with the PPP after being satisfied with initial reports from PricewaterhouseCoopers and a subsequent independent assessment by Ernst & Young that the PPP solution represented value for money against public sector alternatives.

Yokohama Finance (Europe) has been dropped as the arranger and as the dealer off Yokohama Finance (Cayman) ¥300 billion ($2.24 billion) subordinated guaranteed Euro-MTN programme. Nikko Salomon Smith Barney, already on the dealer panel, is the new arranger. The programme was signed on November 1 1995 and has $644.56 million outstanding off nine trades. The issuer has not traded since November 2000 when it closed a 10-year ¥1 billion note.

The first fresh loan mandate of the year for a Turkish financial institution is set to be awarded next week, assuming that the tough bargaining still under way this week is successfully concluded. Bankers expect that Türkiye Garanti Bankasi will be the first to award a mandate to tap the market. The bank plans to refinance its Eu350m facility signed last March. That deal paid a margin of 60bp over Euribor and was arranged by 18 strong bank group.

Forty-five percent of the volume in US dollar yesterday came from Germany issuers, in particular Landesbank Sachsen. It announced three deals for $10 million, $20 million and $40 million. All were led by Goldman Sachs and have terms of one year. The $20 million and the $40 million notes pay 1m $Libor, and the $10 million note pays 3m $Libor. Norddeutsche Landesbank was also active, announcing a $25 million 13-year deal. HypoVereinsbank acted as dealer, and the coupon is fixed at 6.26%. Abbey National Treasury Services did a $3.58 million three-year trade. Deutsche Bank self-led a $5 million seven-year issue, and Lehman Brothers self-led a $20 million three-year note. Lloyds TSB Bank went for a $6.1 million 10-year deal with Salomon Smith Barney as bookrunner. Salomon also led deals for Banque et Caisse d'Epargne de l'Etat Luxembourg ($7 million, five years), European Investment Bank ($20 million, 20 years) and Inter-American Development Bank ($50 million, seven years). Royal Bank of Scotland went for two deals, both for $10 million. They have terms of five years and two years. Bank of Scotland Treasury Services did a $70 million two-year deal. Lehman Brothers was the dealer and the note pays $Libor plus two basis points, and was issued at par.

BNP Paribas has arranged a £101.9m senior debt facility for the Allied Healthcare Group. The facility is divided into five tranches. Tranche 'A' is a £23.8m four year amortising term loan that pays a margin of 225bp over Libor. Tranche 'B' is a £12.5m five year amortising term loan that pays a margin of 275bp. Tranche 'C' is a £50m five year amortising term loan that carries a margin of 350bp. The deal includes a £5m four year revolver with a 225bp margin and a £10.6m six year mezzanine tranche that pays 350bp.

* Bank of Scotland Treasury Services plc Guarantor: Bank of Scotland

The ICI rights issue prompted jitters this week in the UK market, as investors speculated which company would be the next to announce a capital restructuring. Invensys, the controls and automation group, denied it was preparing a rights issue to reduce its £3bn debt burden. Analysts have long suspected that if Invensys is unable to make enough headway on its divestments programme, it may have to resort to a rights issue (see EuroWeek 713).

Globals n Fannie Mae

In an atmosphere of near panic, investors sought to reduce their exposure to credit this week and corporate spreads widened dramatically on any piece of negative news. DaimlerChrysler bonds widened by around 30bp after the company reduced its 2002 earnings target. The rest of the auto sector moved out in sympathy, with Ford bonds in particular encountering strong selling pressure. Ford's recent 6% 2005 bond widened to 264bp over mid-swaps, having been launched at 170bp over.

Twelve of the 13 trades announced in US dollar only just amounted to over $100 million, but with a single public deal from Nomura Global Funding the volume reached over $800 million. The $680 million three-year trade was led by Nomura International, and had Credit Suisse First Boston and Merrill Lynch as co-managers. World Bank's $30 million trade was the next biggest and goes out to February 2005. It has a fixed coupon of 3.3%. KfW International Finance announced two deals. One was a $10 million two-year trade with BNP Paribas as bookrunner, and has a fixed coupon of 3.325%. It has a single call option after six months. The issuer also went for a $20 million five-year step-up deal via Morgan Stanley. It has an initial coupon of 4.5% and then steps up by 25 basis points every year. Call options are available after year one and annually thereafter. Sigma Finance Corp went for a $4 million seven-year range accrual trade. BNP Paribas was the dealer. And Eurofima did a $11.9 million eight-year deal.

Dairy products and fruit juice manufacturer Wimm-Bill-Dann this week became the first Russian corporate to launch an initial public offering in the international equity markets since mobile telephony firm MTS in July 2000. Global co-ordinator and bookrunner ING Barings priced the American Depository Share (ADS) issue for the first Russian consumer goods company to list in the US after the close of trading on the New York Stock Exchange yesterday (Thursday).

Austria Arrangers Bank Austria (joint bookrunner), Citigroup/SSSB (joint bookrunner) and Dresdner Kleinwort Wasserstein (joint bookrunner, facility and documentation agent) are waiting for one laggard to join the Eu500m five year revolving credit facility for OMV before closing general syndication next week.