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Three small Italian co-operative banks, located in the Piedmont and Tuscany regions, launched a Eu95.2m deal this week that may pave the way for many of Italy's smaller banks to use securitisation. Lead managed by Banca IMI, the deal, which combines the mortgage portfolios of Banca Cambiano, Banca Carru' and Banca di Credito Cooperativo di Fornacette, is the first to use a club structure of this type in Italy.

Italy's Locat SpA, one of Europe's largest leasing companies, last Friday launched a Eu400m securitisation of Italian equipment finance lease contracts. The notes were sold privately to the European Investment Bank (EIB). Arranged by Euro Capital Structures and rated by Fitch, Locat Leasing Series 2001A sold Eu400m of triple-A notes, with an average life of 4.4 years, to the sole investor. The legal maturity for the transaction is June 2010 and the expected maturity June 2007. Details of pricing remain undisclosed.

Speculation continues to surround the financing plans of Railtrack plc, the company that owns the UK's railway network. Railtrack plans to raise £2bn-£3bn in the bond markets with dollar, euro and sterling issues (see separate story in Credit News section).

Servizi Assicurativi del Commercio Estero (SACE), the Italian export credit guarantee agency, last Friday launched a $525m securitisation of Paris Club debt - rescheduled obligations of emerging market sovereigns. Lead managed by JP Morgan and UBS Warburg, this unusual asset class found a keen reception among investors willing to take emerging market risk.

Canary Wharf Group plc, which owns the eponymous high rise office development in London's Docklands, this week launched a tap of its second securitisation worth the equivalent of around £875m. Lead managed by Credit Suisse First Boston, Morgan Stanley and Schroder Salomon Smith Barney, the deal will add three new office blocks to the pool of assets. The three tenants will be the lead managers.

ABN Amro and RBC Dominion Securities this week sold a £239.5m secured bond issued by the newly created housing association, Sunderland Housing Group. The deal will fund the large stock transfer from Sunderland Housing Council to the new company, which was founded in March this year and will be a Registered Social Landlord.

Mizuho International, the London-based investment bank formed from the merger of DKB International, Fuji International Finance and IBJ International, is set to launch its first arbitrage collateralised debt obligation (CDO) next week. Eikos Ltd is a synthetic deal that will transfer the credit risk on about $1.5bn of high yield obligations.

The Italian government achieved a highly successful launch this week for its second securitisation of delinquent social security contributions to its agency INPS. The Eu1.71bn deal was lead managed by Banca IMI, Morgan Stanley and UBS Warburg, the banks that arranged the whole INPS securitisation programme. It was priced at the tight end of the range of 30bp-32bp over six month Euribor, and was oversubscribed, with about Eu2bn of demand.

Appetite for an energy credit has helped push up Dresser Equipment's terms "A" and "B" at over 100 this week. The "A" tranche hit 101 3/4 and the "B" hit 101 1/2. Dealers report that over $100 million has traded. Tapco Carpentry's debt, offered two weeks ago in the 96 1/2 range, has now moved up a full point. A $5 million piece of Charter Communications traded at 99 5/8.

Lehman Brothers is recommending investors sell U.S. dollar calls against the Taiwan dollar to take advantage of anticipated further weakening of the Asian currency. "The Taiwan dollar has hit post-crisis lows," said Ronald Leven, currency strategist at Lehman in Tokyo. However, further downside is limited as the central bank likely will intervene to halt a wholesale sell off. Lehman suggests selling a one-month U.S. dollar call struck at TWD33.70. The Taiwan currency was trading in the spot market at TWD33.45 on Thursday. Implied volatility stood at 3% for the one-month call option versus a historical level of 2.5%.

OTCex, a Paris-based equity derivatives broker formed by professionals from BNP Paribas and Fimat, has attracted 22 members and notched up 610 transactions since going live six months ago with an approach that blends on line and traditional voice brokering. Colin Jolly, coo, said the firm offers delta-neutral equity options on the German, Swiss, French, U.K., Dutch, Italian, Spanish and Belgian listed equity markets. Despite the popularity of the Internet some 90% of the transactions OTCex handles are closed by voice brokers at the firm, he noted. "It takes time to change habits," he said. "In the standard inter-dealer broker market people are used to dealing by phone," he continued.