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A handful of telecommunications names took a hit last week, each dropping about 10 points, with dealers saying a revenue projection by Global Crossing sparked the trading. Global Crossing's debt traded in the high 50s while McLeod USA traded in the low 50s. Bank debt for Level 3 hung in and traded flat at 60. "Their bonds are holding up because of a bond tender offer," a dealer said, noting this in turn is supporting bank debt levels. Exact volume could not be determined, but dealers said it was minimal. Late last week Moody's Investors Service lowered the rating on Global Crossing's bank debt to B1 from Ba1 due to the company's recent financial guidance that projects a revenue shortfall. The telecommunications company is based in Hamilton, Bermuda.

Land O'Lakes will carry significantly higher debt and have weaker debt protection measures following its acquisition of Purina Mills, putting pressure on the company's new $375 million senior secured bank deal. Moody's Investors Service assigned a Ba2 rating to the new credit. Land O'Lakes is paying $243 million for Purina and is also taking on $120 million in Purina Mills debt. Peter Abdill, senior credit officer at Moody's, said timing was an issue for Land O'Lakes. "Land O'Lakes did [the acquisition] at a difficult time in the agriculture cycle," said "Sometimes an acquisition in a downturn is the right thing to do; you can buy on the cheap. But they did it at a bad time in their business life." Land O'Lakes, based in Arden Hills, Minn., is a branded dairy food and agricultural supply cooperative.

Corporate bonds from the beleaguered industrial manufacturing sector are being pitched as good total return plays by investment-grade players, who argue that the recent spread pullbacks are overdone, given the income stream diversification in several of these names.

Stephen MacLennan, head of interest-rate derivatives trading at Standard Chartered Bank in Hong Kong, recently resigned in the midst of a reorganization of its interest-rate derivatives desk. Reasons for the departure could not be determined by press time. Mike Bass, head of interest-rate derivatives in Singapore and to whom MacLennan reported, declined all comment on MacLennan. MacLennan could not be reached.

BNP Paribas has hired Alan Dunne, a foreign exchange technical strategist at Bank of America in Singapore, as a London-based strategist for the major developing currency markets in the European time zone. Dunne said he will cover currency and local debt market strategy, including foreign exchange derivatives strategy and interest-rate swaps, for Poland, Hungary, South Africa, Turkey and the Czech Republic.

The collapse last week of U.K. rail operator Railtrack is causing credit derivatives professionals to reconsider their positions in other companies regulated or subsidized by the U.K. government. The Railtrack collapse is significant because it is the first investment grade default in the European market. Since the company was put into administration traders are revaluing credit-default swaps that are priced with an implicit government guarantee on the reference credit, according to credit traders. For example five-year protection on National Grid widened 15bps to 40-45bps last week. Although National Grid does not have explicit backing, the company's rate of return is determined by the government.

China Standard & Poor's has affirmed the BBB long term foreign currency rating and A-3 short term ratings for the People's Republic of China. The agency said that it expected the sovereign to continue economic liberalisation in the coming years, despite the downturn in global growth, with efforts to build new social welfare, legal and regulatory systems helping to strengthen the country's weak institutions.

Australia The possibility of a rapid resurrection of the jumbo Enex Resources float diminished this week as coking coal prices weakened and analysts downgraded their outlook for prices.

As reported in EuroWeek last week, the Korean government is pressing ahead with its $500m combined convertible (CB) and Global Depository Receipt (GDR) offering to sell down the next stage of its Korea Tobacco & Ginseng shareholding. The roadshow began yesterday (Thursday) in Hong Kong and will end with pricing on October 24.

The IPO of the Japanese unit of US coffee shop chain Starbucks Corp attracted overwhelming attention from investors and the media in Japan this week, despite the deal's relatively small size. The disproportionate attention commanded by the deal is a sure sign of the weakness in the global equity markets.

The Kingdom of Thailand is to invite five banks to submit proposals for a $300m equivalent Samurai bond issue, a decision that could result in the first public international transaction from the sovereign for over four years. Bankers familiar with Thailand's plans said the sovereign wanted to issue the three tranche deal by mid-November. However, some Japanese bankers expressed doubt over the plans, noting that difficult market conditions and the conservative outlook of Japanese investors will pose challenges to the launch.

Goldman Sachs, JP Morgan and UBS Warburg have emerged as joint holders of the mandate to lead manage a $500m bond from Korea Deposit Insurance Corporation (KDIC). The deal structure remains secret but the objective is clear: to monetise the state holdings of two financial groups, the listed Cho Hung Bank and the unlisted Woori Financial Holdings. Bankers close to the deal told EuroWeek that now the mandate has been awarded, the parties on the transaction are set to engage in a series of discussions to forge the final structure of the transaction.