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Bankers working on the $500m offering to sell down the next stage of the government's Korea Tobacco & Ginseng (KT&G) shareholding, have reported strong investor interest. The combined convertible bond and GDR offering is due to be priced on October 24. The roadshow began last Thursday 11 in Hong Kong and books on the convertible bond have already closed. The bonds are quoted in the grey market at 101.75%-102.25%. "This is a clear indication that the market thinks we are on the button on the pricing," said a banker close to the deal.

As reported last week, pre-marketing began on Monday for the IPO of the Petroleum Authority of Thailand (PTT), after the government last week gave the firm permission to sell up to 30% of the company. Final details of the offering have yet to be decided but it is hoped that, despite volatile markets and the weakness in Asia, the deal can proceed. "We are proceeding cautiously and methodically, given the current climate," said one banker working on the transaction. "Nothing is certain in the current market and geopolitical environment. Pre-marketing is producing an encouraging response and the equity markets are clearly open for the right deal, at least for the moment," he added.

Despite the gloomy picture for world air travel, Deutsche Bank, Merrill Lynch and UBS Warburg were jubilant yesterday (Thursday) as the A$300m surprise placement they launched was increased to A$450m due to strong demand. "You would not have imagined that an airline stock would be in the market in these times, yet alone increasing the deal size by 50%," said a banker working on the deal. The result of the issue, including allocation, will be known before the markets open in Sydney today (Friday). Qantas stock closed on Wednesday trading at A$3.24 and the initial A$300m new share offer was in the market with an indicated range of A$2.90 to A$3.10.

QBE Insurance Group, the largest Lloyd's of London underwriter, has raised A$663m ($338m) in a new share sale managed by Credit Suisse First Boston (CSFB), Macquarie Bank and Merrill Lynch. The funds are to shore up finances and to deal with claims from last month's terrorist attacks on the US. QBE sold A$542m of stock to institutional investors at A$5.50 a share and will sell a further A$121m of new shares to individuals. The deal helped QBE shares recover 17% as the market acknowledged that QBE had restored its capital ratios and its ability to write new business.

Singapore Telecommunications (SingTel) could be the first Asian telecoms operator to launch a global bond issue since September 11. The Singapore telecoms company is considering following up its successful acquisition of Cable & Wireless Optus with a jumbo transaction that could be priced in the coming months. SingTel announced this week that ratings adviser Goldman Sachs and Salomon Smith Barney (SSB)have been appointed joint advisers to evaluate the corporate's alternatives on refinancing its short term debt, with an international bond issue being one possibility.

Bouncing back from its failed attempt to launch a $2.5bn, 10 and 30 year dollar global bond issue in July, Pacific Century CyberWorks (PCCW) successfully delved into the long dated Japanese yen debt market this week. The controversial Hong Kong telecoms and internet operator privately placed a debut ¥30bn, 30 year non call five Euroyen transaction, with Merrill Lynch sole lead manager and bookrunner. The BBB rated issuer gained competitive pricing compared with dollar bonds issued by its regional and international peers. PCCW also beat the estimated 30 year spreads of its own postponed global bond issue.

After a quiet year in the Asian primary bond market, two Korean bank mandates have been awarded within days of each other and Salomon Smith Barney (SSB) is involved in both. Korea Development Bank has appointed Barclays Capital and SSB to lead manage its long awaited $500m global bond offering, while SSB has also been appointed sole lead manager of a $150m, 10 year Eurobond for KorAm Bank, awarded late last week.

Angola The $600m oil-receivables backed facility for Sonangol - the state owned oil producer - has been launched to sub-underwriters.

Hong Kong The HK$3.8bn 4-1/2 year fundraising for Salisburgh Co, mandated to ABN Amro, BNP Paribas, BOCI Capital, Citibank/Salomon Smith Barney, HSBC, SG and Standard Chartered Bank, has been closed. The facility was oversubscribed but not increased.

Asia Pacific * REISMAC 2001-2

Australia Australia Magnesium Corp's A$932m multi-tranche project financing arranged by ABN Amro, ANZ Investment Bank, JP Morgan and WestLB will be relaunched next week.

Japanese issuers were once again most popular in the yen sector yesterday, but in terms of volume it was the Swedes who took top spot. Spintab was responsible, announcing a ¥20 billion ($164.7 million) deal with Salomon Smith Barney as bookrunner. It matures in October next year and has no structure, paying a straight coupon of 0.1%. Svensk Exportkredit did three trades. One was a ¥1 billion note that goes out to November 2026, the others were a ¥180 million deal and a ¥300 million deal. Both have terms of 30 years and pay a final coupon of 6%. Rabobank Nederland announced its 79th yen trade of 2001. It was a ¥1 billion note, with Merrill Lynch as dealer and has a 15-year tenor. Its coupon is fixed at 2% for the first year and then turns into a step-up inverse floating rate note (FRN). It is callable every 6 months. It was the only Dutch borrower doing yen business yesterday, but France had its usual spate of trades. CDC IXIS Capital Markets announced a ¥600 million trade and a ¥1 billion 20-year trade. The first was led by Merrill Lynch and has a fixed coupon for one year then becomes a PRDC. It is callable every year. The second has a fixed coupon of 2% for the first year then becomes a reverse FRN. It is callable at every coupon payment date, which is semi-annual. Credit Agricole Indosuez did a ¥100.55 million trade and a ¥500 million trade. They have respective maturities of 6 months and 15 years. And Caisse Nationale Des Caisses d'Epargne et de Prevoyance announced a ¥1 billion 150year deal with a coupon of 2.5%. Nomura was bookrunner for a Hypo Alpe-Adria Bank issue. The ¥500 million note goes out to November 2021 and has an initial coupon of 2%. After a year this turns into a PRDC, callable semi-annually. And Nomura also led a trade for KfW International Finance. The ¥1 billion deal was quickly increased to ¥1.1 billion, and has a tenor of 25 years. The coupon of 5.2% lasts a year, and then becomes An Australian dollar - yen PRDC. It is callable after one year and semi-annually thereafter.