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FOLLOWING last week's successful tender for residential mortgages, the Hong Kong Mortgage Corporation may buy a portfolio of mortgages privately in the next two weeks, to be followed by a possible further public tender. The corporation's decisions will depend partly on movements in Hong Kong interest rates. A week ago three month Hibor came down below Prime, and it has since stayed below 9% -- on Thursday the rate was 8.375%.

MERRILL LYNCH roadshowed a new asset class in London and Milan this week -- film library revenues. The bank will likely sole manage a Lit450bn bond the week beginning February 23 for Italian media group Cecchi Gori, backed by earnings from a library of 1,200 films. The portfolio comprises both Italian films to which Cecchi Gori has rights, including many which it produced, and international films which Cecchi Gori has the exclusive right to distribute in Italy.

* DKB International, the London investment banking arm of Dai-Ichi Kangyo Bank, will likely launch its first asset backed bond on February 23. Oscar Funding Corp is a securitisation of Japanese auto loans originated by Orient Corporation, the country's second largest independent consumer credit company. The deal will probably total $300m, and will mature through a 5% clean up call on March 10, 2003, with an expected average life of 1.8 years.

* CSFB will next week sole manage the first CLO backed by project finance loans. Project Funding Corp 1 will offer $617m of three month Libor floaters in five classes. The senior tranche, rated triple-A, will comprise 87% of the deal.

SALOMON Smith Barney brought its most successful student loan deal yet with $923.47m of floating and fixed rate notes for the Student Loan Finance Corporation. Since its formation late in 1997 the house has cornered the market in European targeted student loan securitisations -- Smith Barney had a leading position in the US domestic student loan market, while Salomon Brothers brought its placement power with European Libor-based investors.

SOCIÉTÉ Générale this week issued the second repackaging of Australian mortgage backed securities from its HOMES MTN programme in a search for ever better arbitrage. Home Owner Mortgage Enhanced Securities Ltd Series 98 came in two tranches, rated triple-A by Standard & Poor's in line with the underlying collateral. Both are callable at one year with a step up coupon to reassure investors of the soft bullet maturity.

THE £343m private placement for Capital and Income Group (CIT), reported in EW 358, has put securitisation on the London map -- literally. The second largest commercial property securitisation in Europe after 1997's Canary Wharf deal, the UBS-arranged transaction is backed by six landmark office buildings in central London. These include Sea Containers House, rented by the UK Customs and Excise and Sea Containers; Farringdon Court, occupied by Merrill Lynch, and British Telecom's headquarters at 120 High Holborn.

In a previous learning curve (DW, 1/5), we introduced a notion of convexity cost in the option adjusted valuation.

COUNTRYWIDE Corp Ltd (Hong Kong), the offshore funding vehicle of New Zealand's Countrywide Bank, has mandated UBS to arrange a $1bn Euro-MTN programme. Branch manager Mark Giulianotti told Euroweek that the A rated group -- which has launched two Euro-Asian bonds through its Hong Kong branch over the past two years -- had set up the programme to diversify its investor base further and facilitate a more opportunistic borrowing approach.

A BORROWING programme of around $3bn announced by the Philippine government this week has generated confusion among the Asian banking community, with few participants aware of any firm mandates or imminent launch dates. Under the terms outlined by Banco Sentral ng Pilipinas (BSP) governor Gabriel Singson, the republic is planning to source up to $3.4bn from a variety of capital markets and banking instruments.

THE HONG Kong Mortgage Corporation has bought mortgages worth HK$1bn in a tender competition open to its 14 affiliated banks. Dao Heng Bank, First Pacific Bank, International Bank of Asia and Orix Asia Ltd were successful in a competition which generated HK$2.45bn of offers.

INVESTOR conversion of utility company Huaneng Power International's (HPI) New York-listed 'N' shares into 'H' shares got off to a slow start despite the steady performance of the Hang Seng Index for much of the week. Although no figures for conversion were available, it was widely accepted that existing shareholders were adopting a wait and see attitude.