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The Kingdom of Spain's securitisation programme of small and medium sized enterprises ended this week as Caja de Ahorros del Mediterraneo launched the last deal of the year, a Eu600m bond via SG. Each year the government agrees to wrap a certain portion of securitisation tranches, in this case Eu1.8bn, for SME (or pyme) securitisations, provided 50% of the proceeds are reinvested in the sector.

Westpac was on the verge of pricing a A$510.64m securitisation of Australian commercial property this week when the news struck of WorldCom's hidden losses. The deal, for financial services company Challenger International Ltd, derives about 7% of its revenues from a building rented by UUnet and OzEmail, subsidiaries of WorldCom.

GMAC Residential Funding Corporation (RFC) is expanding its structured finance activity into Europe for its latest securitisation, with a residential mortgage transaction from its Dutch subsidiary. Citigroup/SSSB is pre-marketing a Eu350m transaction for GMAC RFC Nederland BV. The group has been looking to enter the European market and this transaction is the first public evidence of that effort. The Dutch subsidiary began offering its mortgage products in May last year. Other recent investments include the acquisition of the German and French activities of mortgage broker Creditweb in February, through which the group hopes to learn about other European markets.

Unión de Créditos Inmobiliarios (UCI) returned to market this week with a Eu600m securitisation of residential and personal mortgages. Lead managed by BNP Paribas and Santander Central Hispano (SCH), the deal is UCI's second residential mortgage securitisation in under a year, following a Eu455m deal in November also lead managed by BNP and SCH, the bank's owners.

Meliorbanca, the Italian mid-cap investment banking group, this week brought a rare asset class to market - Italian public sector loans, via UniCredit Banca Mobiliare and UBS Warburg. The deal, which totals Eu246m, has few precedents. In August 2001 Morgan Stanley parcelled Eu394m public sector loans originated by Credito Fondiario Industriale (Fonspa), the bank it acquired in April 2000. The deal was designed to clean Fonspa's balance sheet as part of its development as a servicing platform.

The successful Provide programme sponsored by Kreditanstalt für Wiederaufbau (KfW) continued into its fifth transaction this week with a Eu1.508bn residential mortgage backed securitisation (RMBS) for Commerzbank AG. Like Provide GEMS of April this year, a Eu1.052bn deal led by Commerzbank Securities for Rheinhyp AG, the transaction transfers the risk of the portion of the mortgages with a loan to appraised value ratio above 60%. This portion is 100% risk weighted and so ineligible for Pfandbrief issues.

Restructuring in the UK water sector gathered momentum this week as Anglian Water Group prepared a £1.7bn bond, while two smaller water-only companies, Portsmouth and Dee Valley Water, launched or prepared to launch bonds of their own through a new RBS vehicle. All three deals highlight the demand for alternative means of financing at both ends of the water company spectrum.

At the risk of stating the obvious, it's safe to say that the market was engrossed with WorldCom's admission to more than $3.6 billion of accounting fraud and the subsequent fall out in the bank and bond markets. The company's $2.64 billion termed-out paper was quoted in the 12-16 range and the bids for the company's $3.75 billion paper set to expire on Sunday were quoted down to 15-18, but neither traded. The paper had been trading at 81. Calls to Brad Burns, company spokesman were not returned by press time.

Bids for WorldCom bank debt and bonds plummeted into the teens this morning following news of the company's fraudulent booking of more than $3.6 billion in expenses. The paper had been at 81. Rumors circulated around the bank debt markets of paper trading in the 12-14 range, as well as one trade of the $2.65 billion termed-out paper at the 22 level. Several major dealers denied the existence of those trades.

UBS Warburg has done an about-face on Herbalife International by canceling a Euro 100 million bond sale after investors pushed for too high of a yield. Instead, the $165 million "B" term loan has been upsized to $180 million and the $150 million U.S. bond portion has been bulked up to $165 million.

The Yorkshire Building Society is seeking an assistant treasurer who will have a prominent role in the company's hedging activities. Chris Parrish, group treasurer in Bradford, said the new hire will be responsible for the transactional hedging of its GBP9 billion (USD13.4 billion) fixed-rate saving and loan portfolio. Parrish explained that the building society uses plain-vanilla interest-rate swaps to hedge the notional value of the entire portfolio.

Bruce Nichols, director-equity derivatives trader at Barclays Capital in London, has assumed responsibility for the firm's Eurostoxx 50 book, according to Jerome Bussière, associate director in charge of single stock trading in Europe. The book was previously managed by Arnaud Fransioli, who recently joined Voltrex Options, a specialist derivative brokerage house in London. Nichols confirmed the move, declining further comment.