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WorldCom excepted, the high-yield market was flat to slightly improved overall. Issuance continued to be solid, with two or -three European deals performing well (see story, page 1). Canadian telco Call-Net Enterprises' 10.625% notes were a big loser, dropping 20 points on poor numbers. Here was other selected action.

HSBC Securities has lost at least $45 million in its U.S. corporate bond desk trading operations, largely in telecom and Tyco International bonds, say fixed-income officials with knowledge of the situation. This hit, coming after a $15 million loss on the firm's U.S. Treasury desk and feeble bonus payouts for 2001, framed a dire picture for 2002 compensation and has prompted an exodus of senior staff of the corporate bond group over the past several weeks. There are just two people left on the capital markets origination desk, one of which is an associate. The decline in bonuses was particularly disappointing, say the officials, noting that expectations had been raised after the corporate desk turned an estimated $20 million profit in 2001.

Two portfolio managers are pointing to the shifting base of corporate bond investors, as well as the ancient Street practice of "pumping up the book" during deal pricing, to explain the recent ballooning spreads on new corporate issues.

Lehman Brothers allocated the $565 million "B" loan for Corrections Corporation of America last Tuesday, after upsizing the tranche and trimming the spread. The "B" was originally $495 million and priced at LIBOR plus 4%, but after massive oversubscription from investors, $70 million was added and pricing was slashed 1/2%. The "A" term loan was downsized $50 million from $125 million to $75 million, while the revolver stayed at $75 million. A banker said bids in the secondary are above par, but exact levels could not be confirmed. Pricing on the four-year pro rata is grid-based, also at LIBOR plus 31/ 2%. Deutsche Bank, UBS Warburg and Société Générale signed on for the pro rata, said the banker.

Kent Oz, head of financial institutional sales for BNP Paribas' equity derivatives group in New York, resigned last week, according to a firm official. Oz, who has been with the firm for more than five years, had been reporting to Vuk Bulajic, head of U.S. equity derivatives in New York. Bulajic resigned two weeks ago to join CDC IXIS Capital Markets North America as the head of equity derivatives sales and marketing (DW, 4/29).

Taking advantage of Korea's recovering credit story, Kumgang Korea Chemical (KCC) has opted to re-open its $100m 7.625% 2008 bond launched last year. The chemical, glass and paints manufacturer has appointed JP Morgan to arrange a $100m tap, with the issue likely to be priced early next week.

Two long awaited jumbo equity transactions from Malaysia are due to emerge in the coming weeks. The IPO of Malaysia's largest toll road operator is set to follow the float of one of the country's leading cellular telecom companies. The two deals should cement the return of Malaysia to the international equity markets.

Reports from the Asian markets this week suggest that Petroliam Nasional Berhad (Petronas) is to return to the dollar market and make its debut in euros with a jumbo international offering. Early reports suggested that the Malaysian oil and gas company is looking to launch a $3.5bn dual currency transaction in dollars and euros. At that level, the bond would be the largest non-sovereign deal from non-Japan Asia.

Hong Kong BondsInAsia and asiabondportal (ABP) have announced an agreement in principal to merge. The merger between the two electronic trading portals will mean that the combined entity keeps the name BondsInAsia and uses its trading platform, with ABP member banks ABN Amro, Bank of America, Deutsche Bank and JP Morgan joining BondsInAsia's existing shareholder group.

ING Bank Australia felt the shockwaves of GE Corp Australia Funding's A$41.7bn benchmark deal when it debuted on Australia's bond market this week. The Australian affiliate launched a A$300m five year transferable certificates of deposit (TCD) deal on Monday, but had to pay a wider spread than initially expected as a result of weakening secondary market spreads. By doing so, double-A rated ING Bank Australia ensured that it gained a strong market reception for the TCDs.

Lehman Brothers yesterday (Thursday) completed a $205m exchangeable bond for United Microelectronics Corp (UMC) that can be converted into shares of UMC subsidiary AU Optronics, Taiwan's largest maker of thin film transistor (TFT) panels for flat screen computer displays. The deal emerged a day after AU Optronics completed a US SEC filing for the imminent issue of up to $700m of stock in the form of ADRs through lead manager Citigroup/SSB.