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JP Morgan last week offered ABS investors rare exposure to emerging market sovereign risk, with a collateralised debt obligation worth $216.6m. Managed by Barep Asset Management, a division of SG, the deal will parcel fixed and floating rate bonds, loans and synthetic obligations issued by emerging market states, with a maximum concentration of 5% for any single obligor.

Securitisation specialists have begun to digest the surprise announcement two weeks ago from Eurostat, the EU statistics agency, that it planned to lay down hard rules for state securitisation accounting treatment in July. The move threatens to undermine one of the chief motivations for states to securitise - that EU governments can reduce debt to GDP ratios towards the target levels prescribed by the Maastricht treaty by using securitisation instead of normal borrowing.

ProLogis, the US-based property company that specialises in distribution warehouses, last week launched its second European securitisation. But in a change from the company's original plans the transaction was backed by a loan secured on only French properties in the outskirts of Paris. In 1999 the company set up the ProLogis European Properties Fund to run the European operations of the US ProLogis Trust. The fund now owns around Eu1.6bn of distribution warehousing in Europe and is expected to increase this to Eu3bn within the next few years, based on the fund's equity commitments.

This week saw the first securitisation of rents from student accommodation for over two years, when Unite Group plc securitised rental flows from a portfolio of student and NHS key worker accommodation. Investors were initially wary of exposure to the low income world of UK students and only six of the 47 properties are occupied by the NHS. In February, Moody's downgraded two tranches of notes from the first securitisation of UK student loans, Greenwich NatWest's £1.03bn THESIS No 1 plc of March 1998.

In a move to re-establish its weather derivatives trading business Swiss Re Financial Products has hired Mark Tawney, former head of the weather derivatives desk at Enron in Houston, and a team of four other weather traders from the bankrupt power company, according to a Swiss Re official.

Goldman Sachs and J.P. Morgan are preparing a $600 million "B" term loan for Pleasantville, N.Y.-based Reader's Digest Association, backing the $760 million cash acquisition of Reiman Publications. "The entire $760 million payment will be bank debt," said Michael Geltzeiler, senior v.p. and cfo for Readers Digest. "Readers Digest primarily chose to use bank loans to finance the acquisition as it enables us to use the free-cash flows of the combined business to reduce debt levels," said Geltzeiler. This should enable accelerated deleveraging, he said. "Based on the rather favorable interest-rate environment we're looking at LIBOR plus 2 1/2% to 3%," he noted.

Credit Suisse First Boston and Bank of America's deal for Flowserve, which backs the acquisition of Invensys' valve division, is expected to join the club of credits recently oversubscribed, according to bankers. The seven-year, $735 million "B" loan was launched to institutional investors on Tuesday and carries a LIBOR plus 3 1/4% spread. A banker explained the "B" backs the $535 million acquisition and refinances existing debt. It could not be ascertained if pricing will flex yet, as the credit has only just been launched, said a banker.

FleetBoston Financial and Bank of America are set to launch next Tuesday syndication of a $300 million credit for Team Health backing the $147 million acquisition of Spectrum Healthcare. The credit, which includes a $150 million "B" term loan, also refinances $110 million in existing debt led by the two relationship banks. A decision was made to finance the acquisition with bank debt, rather than bonds or equity, because of perceived investor appetite for health care in the bank market.

Société Générale is offering 1/4% for commitments to the National Basketball Association's Charlotte Hornets' $40 million term loan. Fees on the $35 million pro rata are 3/4% for $20 million and 1/2% for $10 million. The deal partially backs the proposed move to New Orleans, following a request to the NBA to relocate the franchise that is almost certain to go through at this point, said bankers.

KBC Bank has returned to the market with its $252 million Perryville Power construction loan for Mirant and Lousiana utility Cleco, and is looking for retail participants. A banker familiar with the deal said the original syndication was suspended last summer due to an issue over air permits, which have recently been received. About 15 banks are said to be looking at the loan, after 23 banks attended the meeting last week.

Magnum Hunter Resources has launched the retail round of its $275 million loan backing its merger with Prize Energy. The company has wrapped a successful bond offering and managing agent round and this is the final piece to be completed. According to a banker familiar with the situation, four banks have come in at the senior managing agent level, in addition to leads Deutsche Bank, CIBC World Markets and BNP Paribas. Pricing on the three-year borrowing-base facility is LIBOR plus 2 1/4%, but the borrowing base transaction still carries too low a spread to be of interest to non-bank players, according to the banker.

Adelphia Communications' bank debt fell this week with a couple of $2.5 million pieces trading in the 96 range following new reports that the company's off-balance sheet debt may be larger than previously believed. Early on Wednesday, dealers quoted the name in the 95 1/2 - 97 context. The company also announced that the Securities and Exchange Commission is conducting an informal inquiry into the matter. Calls to Jim Brown, company v.p of finance, were referred to a spokeswoman who did not return calls.