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Despite continental Europe-wide holidays and Golden Week in Japan, underwriters are cramming a surprising amount of business into next week. Roadshows are in abundance and the new issue calendar looks busy, especially in euros. This week the credit market digested the Eu6.5bn equivalent issue RWE launched last Friday (April 19), which included the largest ever sterling offering, of £1.55bn. It was priced just before E.On named ABN Amro, Barclays, DrKW and Goldman Sachs as leads for its intermediate and long dated euro and sterling bonds worth between Eu5 and Eu7bn.

Rating: AAA Amount: Eu100m Öffentlicher Pfandbrief series 266

European high yield investors have been left almost windswept by three roadshows in the last week, from high yield issuers SC Johnson Wax, Sanitec and Britax. But they have also been drawn further into the cross-over credit market. WorldCom, whose senior unsecured long-term debt was downgraded by Moody's on Tuesday from A3 to Baa2, has seen considerable trading turnover. Moody's said the downgrade reflected WorldCom's revised earnings forecast for 2002, which was well below expectations. Around $30bn of debt securities is affected, including around Eu1.25bn in euro issuance. "It is trading more like a single-B, giving yields of 15% to 18% depending on whether you're buying the 2003s or 2008s," said one high yield salesman.

Patrick Sollinger, head of index trading at Commerzbank in Tokyo, has resigned, according to officials at the firm. He reported to Tim Reed, Asia head of derivatives in Tokyo. Reed declined all comment and Sollinger could not be reached.

Morgan Stanley has appointed Jordi Visser, a managing director in its index options trading group, as a managing director and head of hedge fund sales for its equity derivatives group in New York. Visser, who confirmed his appointment but declined further comment, replaces Bill Levy. Levy left Morgan Stanley in early April to become the co-head of the global equity derivatives marketing group at Lehman Brothers in New York (DW, 4/7).

Deutsche Bank has released price talk for BMORE, a Eu100m securitisation for Banco Mais, Portugal's largest independent auto loan financier. The 4.5 year triple-A floater, worth Eu87.5m, will come at 32bp over Euribor, while the Eu7m and Eu5.5m 6.7 year subordinated tranches, rated A1/A and triple-B respectively, will be priced at 80bp and 150bp.

Westdeutsche Immobilienbank, a subsidiary of WestLB, this week launched its first synthetic securitisation, a Eu957.932m deal backed by commercial mortgages from across Europe and North America. Almost 58% of the loans are on US properties. The investors, all European, expressed concern over exposure to prime New York business districts in the wake of September 11. "For synthetic CMBS transactions we see most of the investor demand coming from Germany, primarily banks," said Glenn Davies, director in the WestLB debt syndicate in Düsseldorf. "Investors were concerned by the amount of US properties but the portfolio statistics are very strong and overall diversity is good."

Pacific Investment Management Co (Pimco) this week launched its first European collateralised debt obligation, a Eu358.5m fund pooling predominantly investment grade leveraged loans, mezzanine loans and high yield bonds. Lead managed by Deutsche Bank, Intercontinental CDO is Pimco's second CDO in as many weeks. Last Tuesday the asset manager launched a $250m investment grade deal in the US, via Lehman Brothers.

Investors flocked to Portuguese lease backed paper this week as Banco Internacional do Funchal and Banco Espírito Santo launched repeat securitisations via Deutsche Bank and BNP Paribas. The surge in Portuguese issuance follows a four month hiatus, despite the passing of a new securitisation law in November 2001 designed to make the securitisation process less complex. A third Portuguese deal will come from Banco Mais later this month via Deutsche Bank

The credit problems that have pervaded US arbitrage collateralised debt obligations (CDOs) for the last two years are beginning to eat into the European market. Fitch this week downgraded the three lowest rated tranches of Eurostar I CDO, a Eu327m deal managed by DWS Finanz-Service, a subsidiary of Deutsche Asset Management.

UK non-conforming mortgage lender, Kensington Group, this week brought its 14th structured finance transaction to the market with the £360m RMS12 via WestLB. Kensington continues to meet with success and tight pricing in the market. Like RMS11 of October last year, this deal included a senior dollar piece sold to US money market funds under rule 2a7 of the Investment Company Act, an unusual technique for a non-US issuer. All investors on this tranche were new to Kensington.