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For many investors seeking high quality paper amid extreme volatility last year, supranational debt was an attractive option. But borrowers still had to address issues such as liquidity and competition from other triple-A credits. EuroWeek finds out how successful they have been.

With questions over government support now largely resolved, the agency market has emerged stronger than before. Louise Herrle, treasurer, Freddie Mac, and Stephen Abrahams, chief of the capital markets division at IADB, spoke to EuroWeek about their funding strategies for the future.

Volatility in global equity markets and a spate of corporate defaults in recent months have sparked a flight to quality among investors. And as government supply has been scaled back, demand for agency paper has grown. EuroWeek asks several borrowers how they have sought to position themselves as an alternative to government debt.

Australia Standard & Poor's has placed Ansett and Air New Zealand's BB+ rating on CreditWatch. The rating agency said that although the company has A$1.2bn of available funds, it has suffered substantial losses because of competition on fares in Australia which has dented the share price.

Australia Boutique firm KTM Capital is arranging the IPO of Globe International, which is raising A$74m. Market capitalisation is expected to be A$360m, and the valuation indicates a 2002 Ebitda multiple of 8.5 times.

The Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, returned to the public international debt capital markets for the first time in over 18 months when it launched a $130m 2-1/2 year floating rate note this week. JP Morgan is sole lead manager of the Ba1/BB+ rated issue, which was launched at a spread of 275bp over six month Libor.

The Commonwealth Bank of Australia is back in the market with a blockbuster $1.1bn global and A$600m domestic mortgage securitisation to raise the equivalent of A$2.85bn. Salomon Smith Barney is to lead manage the global portion, while CBA will place the domestic bonds.

Cable & Wireless surprised the market this week by selling down its entire remaining 14.7% stake in Pacific Century CyberWorks (PCCW) through a jumbo $1.5bn exchangeable bond lead managed by UBS Warburg. Investors and rival bankers almost universally disliked the deal, reporting little primary market buying and claiming UBS Warburg still has a large portion of the deal on its books.

Heritage Building Society Ltd has entered the Australian mortgage backed market with its first term securitisation. The Toowoomba, Queensland-based building society launched a A$250m deal earlier this week to term out mortgages warehoused by SG.

With three issuers launching transactions this week to take advantage of relatively quiet primary markets and a 50bp overnight interest rate cut by the Reserve Bank of Australia, Australian bankers hope to see a strong corporate pipeline in the second quarter. Eurofima, the triple-A rated supranational, entered the market on Monday with a A$200m two year transaction. RBC DS was sole lead manager for the deal and ABN Amro, Commonwealth Bank of Australia (CBA) and Westpac Banking Corp participated as co-managers. The transaction, which pays a coupon of 5%, was priced to yield 4.995%, flat to the quarterly bank bills swap rate (BBSW).

Fifteen Spanish savings banks will today (Friday) price the first securitisation of cédulas hipotecarias, the Spanish equivalent of mortgage Pfandbriefe, in a Eu2.048bn deal.