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Reserve capital instruments (RCIs) are to be treated as liabilities, the UK's Accounting Standards Board (ASB) confirmed yesterday (Thursday). As the EU directive on capital instruments does not allow liabilities to count as tier one, the board's pronouncement, on the surface at least, may create a problem for the RCI structure. Last October, the urgent issues task force (UITF) of the ASB issued a preliminary assessment of the direct issue tier one structure, which recommended that it be treated as a liability, rather than as shareholder funds. Now the ASB has issued an "abstract", to confirm the UITF's initial analysis.

Qantas Airways is believed to be looking to tap the market for a dollar aircraft financing. The borrower recently completed a similar deal to finance the purchase of four aircraft and the new facility will finance the delivery of a further five planes from a total consignment of 15 the borrower ordered last year. The planes are to fill the gap created by the collapse of Ansett Airlines last year and most will be used for domestic flights serving Sydney, Melbourne, Brisbane, the Gold Coast, Adelaide, Cairns and Ayres Rock (Uluru).

Just six trades were announced in US dollar, as Monday saw the US market go quiet for the Presidents' Day holiday. Landesbank Sachsen issued a $45 million one-year FRN. Dresdner Kleinwort Wasserstein was the bookrunner and the note pays a monthly coupon linked to $Libor flat. It is the issuer's ninth dollar trade of 2002. Other notes for amounts between $1 million and $35 million were issued by HSBC Investment Bank (a $20 million six-week trade), Unibanco - Uniao de Bancos Brasileiros (a $1 million six-month note) and UBS (Jersey), which issued a $5.40 million 10-year trade.

Just over $1 billion was announced off 23 trades in US dollar. Rabobank Nederland issued two trades: a $25.85 million seven-year range accrual step-up note via Salomon Smith Barney and a $35.90 million multi-callable range accrual note via JPMorgan. Salomon Smith Barney also led trades for World Bank (a $20 million 20-year note), European Investment Bank (another $20 million 20-year trade) and for Abbey National Treasury International (a $8.80 million seven-year deal). Two German landesbanks were also in the market, and were led by Salomon Smith Barney. Norddeutsche Landesbank did a $100 million one-year trade and Bremer Landesbank Kreditanstalt Oldenburg closed a $70 million note, also in the one-year sector.

New rules for US research analysts, drawn up by the National Association of Securities Dealers (NASD) and the New York Stock Exchange (NYSE), are set to crack down on potential conflicts of interest and restore Chinese walls. NASD chairman Robert Glauber unveiled what he described as "a tough and comprehensive set of rules" at a conference attended by senior legislators in the US Congress as well as SEC chairman Harvey Pitt.

Austria Some 20 banks have joined syndication of the Eu500m five year revolving credit facility for OMV.

New rules for US research analysts, drawn up by the National Association of Securities Dealers (NASD) and the New York Stock Exchange (NYSE), are set to crack down on potential conflicts of interest and restore Chinese walls. NASD chairman Robert Glauber unveiled what he described as "a tough and comprehensive set of rules" at a conference attended by senior legislators in the US Congress as well as SEC chairman Harvey Pitt.

The success of GECC's $3.5bn five and 10 year global bond early this week paved the way for a revival in the dollar new issue market. By the end of the week, more than $11bn of issuance had come to market, including a blowout aggressively priced debut $3.5bn five and 10 year global bond for General Mills. Although primary issuance was thin in the fixed rate euro market, bankers report a calmer sentiment and an increase in investor activity, with spreads having remained firmer over the week.

* Japan Finance Corporation for Municipal Enterprises (JFM) Guarantor: Japan

The only trade over ¥1 billion ($7.42 million) issued on Friday was an increase of a ¥1.5 billion note announced by Pfandbriefstelle der Osterreichischen Landes-Hypothekenbank. The trade was pushed up to ¥2.5 billion and goes out to March 2027. After an initial coupon of 4.8% for two years the coupon is linked to the US dollar-yen exchange rate. The coupon is paid every six months, and the note is callable after two years and then semi-annually. Power reverse dual currency (PRDC) trades were favoured by the majority of issuers on Friday. KfW International Finance was another of eight triple-A issuers who announced deals on Friday. It did a ¥1 billion 30-year trade via Salomon Smith Barney with a coupon that is linked to the US dollar-yen exchange rate immediately. It is callable after a year and then semi-annually. Kommunekredit did a ¥500 million 25-year deal with Nomura as bookrunner. After paying 3% for a year the coupon is linked to the US dollar-yen exchange rate. World Bank did a ¥1.2 billion 30-year deal and Nordic Investment Bank went for a ¥1 billion 20-year trade. European Investment Bank did a ¥1 billion 25-year trade. Royal Bank of Scotland announced three deals, two for ¥500 million and one for ¥600 million. One ¥500 million trade and the ¥600 million trade go out to March 2017 while the other ¥500 million trade goes out to February 2022. BNP Paribas announced four small deals, three of which had 30-year tenors and one of which had a term of five years. Credit Suisse First Boston went for three small deal also, all of which have terms of under four months.

A couple of bigger-than-usual trades in yen pushed the daily volume up to $251.08 million yesterday, but most were concentrated around the ¥500 million ($3.71 million) to ¥1 billion mark. Bawag came to the market with its fourth yen note of the year, a ¥1 billion 20-year CMS-linked note. Nomura was the bookrunner and after a fixed coupon of 3.1% for the first year it is linked to the 20-year yen swap rate minus the two-year yen swap rate +110 basis points. It is callable after a year and then semi-annually. Hitachi Finance UK announced its second yen note of 2002. It was a ¥500 million deal done via Sanwa International. The maturity date is 25 February 2014 and it is also CMS-linked (20-year rate minus two-year rate +35 basis points). It pays a fixed rate of 2% for the first year. Sanwa International also led a trade for Mitsubishi Electric Finance Europe: a ¥1 billion three-month trade that has a fixed coupon of 0.15%. Pfandbriefstelle der Osterreichischen Landes-Hypothekenbank did three power reverse dual currency (PRDC) deals. Two were done via Mizuho and were for ¥500 million, though one was increased to ¥700 million shortly afterwards, and have terms of 21 years. The other was done via Daiwa SMBC Europe and has a term of 15 years. All three are Bermuda callables. SNS bank went for a ¥500 million two-year note via JPMorgan. It pays a fixed rate of 0.01% for its duration and was issued at 99.79%.

Japanese investors continue to avoid the corporate sector allowing the financial and government-based issuers to place yen paper at will. Kommunalbanken announced six trades yesterday, between ¥500 million ($3.77 million) and ¥1.1 billion, two of which had terms of 20 years and the rest terms of 30 years. A variety of dealers were used: Salomon Smith Barney, Daiwa SMBC Europe, Kokusai, Credit Lyonnais and Mizuho. Nederlandse Waterschapsbank did a ¥3 billion 20-year bullet trade via Nomura, and Export Finance and Insurance Corp went for a ¥1 billion 15-year deal with Salomon Smith Barney as bookrunner. Salomon also led deals for World Bank (¥2.1 billion - 29 years seven months, and ¥1.9 billion - 30 years) and KfW International Finance (¥1 billion - 30 years). The closest things to a corporate were Sharp International Finance (UK) and Suntory Capital, with a ¥2.6 billion five-year trade and a ¥1.8 billion six-month trade respectively. Salomon Smith Barney led the deal for Suntory. Svensk Exportkredit announced four notes between ¥250 million and ¥500 million in size and between 20 years and 30 years in length. Credit Lyonnais Finance went for three small and short-dated deals, while Banque et Caisse d'Epargne de l'Etat Luxembourg did two ¥500 million trades (both 20 years) and one ¥1 billion 15-year deal via Salomon Smith Barney.