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Total investment grade issuance clocked in at $7 billion for the week ended Thursday, bringing the January total up to $32 billion. The month is on target still to hit $40-50 billion in investment grade borrowing, although subsequent months are expected to drop into the $30 billion range as corporate America has less need to borrow this year. The primary market has lost its luster in line with the increased equity market volatility, dismal 4Q earnings, the widening of swap spreads and the rating agencies' downgrade rampage. After a record number of fallen angels in 2001, the agencies seem prepared to downgrade first and ask questions later. There were only 3, $1 billion plus deals last week as benchmark borrowers shied away from interest rate volatility.

Italian construction company Astaldi is considering buying its first credit derivative contract to hedge emerging markets exposure. Giorgio Bianchini, head of finance in Rome, said the company is looking into buying default swaps on sovereigns, such as Venezuela and Turkey, where it undertakes construction projects.

Bangko Sentral ng Pilipinas (BSP) re-opened its $550m 9% 2005 deal for the third time this week, adding another $250m to the issue. The re-opening follows the success of the Republic of the Philippines' $750m 10 year deal last week and bodes well for future issuance from the country - new transactions are expected from National Power Corp (Napocor) and conglomerate JG Summit in the next few weeks.

Hong Kong Following up its issuance programme in 2001, Hong Kong Mortgage Corp (HKMC) launched a HK$3bn three year bond this week. HSBC was sole lead manager for the bond, which was priced at par to offer a coupon of 3.8% per year. The deal is the largest Hong Kong dollar deal so far this year. HKMC has the largest Hong Kong dollar bond issue on record: a HK$5bn privately placed transaction arranged by HSBC in March 2001.

In what will be the first international issue by a Hong Kong borrower this year, Hysan Development is preparing to make its debut in the dollar market with a $200m 10 year bond. Merrill Lynch and Morgan Stanley are joint lead managing the Reg S but non-144A Eurodollar transaction, which will be launched through financial subsidiary Hysan (MTN).

Despite the closure of 20 of its 28 retail branches across Japan, Merrill Lynch said that its ability to arrange Samurai and Euroyen bond issues will not be affected. "We do not feel that our wholesale divisions will be damaged by the closure of the retail offices," a spokesperson for Merrill Lynch in Tokyo told EuroWeek this week.

As CapitaLand decides which banks will lead its revitalised property trust offering, news emerged yesterday (Thursday) that the company, part of the Singapore Technologies stable of businesses, had formed a team including former property consultant Steven Choo to spearhead the float. The deal, the first of its type from the Lion State, was originally expected last year. Singapore's efforts to grow and diversify its capital markets suffered a blow in the second week of November when CapitaLand and lead manager UBS Warburg were forced to cancel the float of the newly created SingMall Property Trust after demand for the issue failed to materialise.

With A$11bn worth of redemptions and improving secondary markets, the domestic Australian bond market is primed for a vibrant year of primary activity. "The Australian bond market really took off in 1999 and a lot of the transactions launched then were for three years, so they are maturing throughout this year," said an official at National Australia Bank. "It means that the primary pipeline already looks quite busy." In total, 44% of maturing bond issues this year were originally launched in 1999.

News of the postponement on Wednesday of the planned SK Corp $1.8bn exchangeable into SK Telecom shares came as little surprise to the investment banking community in Hong Kong and Seoul. "The company believes it might obtain more favourable pricing if it waits, given the upward impetus the Korean market has had in the past few months," said a senior ECM official in Hong Kong. "We question whether its judgement is correct, because some investors and analysts believe the Korean market might have priced in too much future expectation of state sponsored restructuring and economic growth."

The anticipated flurry of deals from Taiwan began to emerge this week as vendors try to catch the upturn in the local market. But fund managers, eyeing an avalanche of stock, are taking profits. The list of new deals, several of them Global Depository Receipt (GDR) issues, is unsurprisingly dominated by technology names. Nomura is marketing a block of 125m GDRs in electronics maker Benq on behalf of Acer. Citigroup/SSB moved to New York yesterday (Thursday) on the US leg of its roughly $225m GDR offering for Realtek. Morgan Stanley is trying to launch the $200m convertible for IC packager Siliconware Precision Industries. ChipPAC, listed only on Nasdaq, has awarded a mandate to Credit Suisse First Boston, while Deutsche Bank and Goldman Sachs are preparing for the late January launch of a $300m GDR for ProMos Technologies.

Westfield Holdings' shares surged A$1.33 on news that subsidiary Westfield America Trust had raised A$1.15bn ($700m) in an overnight underwritten bookbuild on Monday evening to part-finance its purchase of 14 US shopping malls owned by Rodamco North America. Westfield Holdings shares closed at A$18.16 on Tuesday, following the placement, which was handled and underwritten by UBS Warburg. The rise boosted Westfield Trust's market capitalisation to more than A$10.22bn. The company is roughly 30% controlled by the Lowy family and Westfield is now the 15th largest company on the Australian stock market.