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IPO ACTIVITY continued apace on Itaty's Nuovo Mercato this week with a slew of offerings, including EPlanet, CTO and TC Sistema, taking the total of new issues on the fledgling market to over 20 since the beginning of 2000. Bankers said that while the steady flow of offerings into August was encouraging, the high volume of new issuance was partly due to delays by the COB. "The closer we have got to August, the slower it has become," said one disgruntled banker.

Peter Jackson has been with Salomon Smith Barney (SSB) for 11 years. He is now heading the desk, which was awarded best Euro-MTN house of 1999, by MTNWeek. As the bank swallowed up the retail distribution capabilities of Nikko and Citibank under the mergers with Travelers group, it grew to become an MTN machine. Jackson arrived in MTNs via two-and-a-half years each in derivatives research and Eurobond trading. One thing that Jackson is grateful for after six years in the market is the development of efficient systems both technical and non-technical in the market. He says: "In the old days we would get enquiry from Japan and deal with it over-night. But it wouldn't be traded until three days later. Nowadays it all happens intra-day. It's a much more efficient market now. When I started we used to write down everything we knew about a borrower in a little black book. For the last few years it's all been database driven. The need to retain information in your head is much less. That's a big change." But as the market became more sophisticated, so too did news reporting techniques. And the level of transparency is increasing year on year. But a small margin of trades still fall between the cracks of information services such as Capital NET and MTNWatch. Jackson believes keeping a low profile on some trades is not only preferable from a profit-making point of view, but also necessary to please certain investors. He says: "The market's far less secretive than it used to be but this is not something that's particularly desired by arrangers or investors. It's a private market for a reason. Investors don't want what they're doing to be advertised. Plain vanilla is reasonably transparent but there is still some degree of clandestine transactions going on in structured business. These are the most profitable trades so you obviously don't want them publicized." As for the future, Jackson sees a clear distinction between what will happen with plain vanilla business and how the structured market will develop. E-commerce has started to affect MTNs. He says: "[Online trading] will partially revolutionize the market. It will definitely increase market efficiency generally and especially on the plain vanilla side which is volume-driven and not that profitable. And I believe it will mean marketing ideas will be done electronically. But trading structures is much too complex for internet trading. We [as dealers] operate in an advisory role and the way you add value is by understanding the customer and his needs. That's done verbally."

? DePfa Deutsche Pfandbriefbank AG Rating: Aa3/AA (Moody's/Fitch)

Banque Nationale de Paris (BNP) and Paribas officially merged on May 23 this year and the two MTN desks have had to reorganize. Two of the eight traders had to go and BNP must move its staff from Paris to Paribas' dealing headquarters in London. After six weeks the team is still separated by the Channel, but it has every reason to look forward to establishing a significant presence in the international market. BNP Paribas is the biggest bank in France with 77,000 employees working out of 83 countries. It can now also claim to have one of the most experienced MTN desks in the market. But the battle that took place will have left deep scars, and it is vital that the merged entity makes the most of its extra resources. The new bank ensured members of the team were committed by having the traders re-apply for their positions. Daniel Cogoi, previously head of the Paribas desk, now global head of MTNs at BNP Paribas, says: "It was a soul-searching exercise. It reminded me very much of a firm starting up a new MTN desk. And we should all see it as joining a brand new team. It's not BNP here and Paribas there, it's BNP Paribas." But many issuers are concerned that a trend of mergers like this could lessen competition for dealerships by decreasing the number of banks. And as dealers increase their client base, the time spent on each particular issuer will inevitably fall away. BNP Paribas is a dealer off European Investment Bank's (EIB) two active Euro-MTN programmes, and is co-arranger off one. Joseph Vogten, head of division, capital markets, at EIB, does not think issuers will suffer from a lack of attention. He says: "We have very little experience of this happening. Even if it does you can increase the level of communication and eliminate any worry." Cogoi moved to Paribas from Citibank in 1993 and has a clear idea of how to run the new desk. He intends to give the team members their own areas of responsibility, specializing by issuer nationality and issuer type. Benedicte Guerin-Cribier, ex-head of private placements at BNP, now deputy-head of MTNs at BNP Paribas, says: "It's a very efficient way of working because a request from an issuer can be dealt with by a specialist." BNP Paribas is on the dealer panel of 24 of the 71 programmes signed this year, according to MTNWare, and is consistently in the top 10 for volume traded, according to MTNWeek criteria. This year it has done trades raising $3.27 billion, taking a 3.77 ket share. Cogoi says: "Frankly I've been positively surprised that volumes and client business have been so robust throughout the merger process." In April last year Paribas entered the MTNWeek top 10 bookrunners. It shot up the ranks to a market-share high of 6.88 n July. But in the last few months of 1999 the bank saw a drop in trading volumes that then levelled off at around 3.85 This is around the time BNP would have been getting involved. Though this may have been a natural dip after the hard, fast climb, other areas of the merger were a strain. Cogoi says: "The toughest part is the time it takes. We are all smart, motivated people and want to get on with the job. The wait was what was killing us." Deutsche Bank and Dresdner Bank's bust-up earlier this year was due to disagreements over the future of Dresdner's investment-banking arm. Similar overlaps existed between BNP and Paribas, but everything has moved forward smoothly. Guerin-Cribier, who was with BNP for three years, says: "We face the same problems as every MTN desk. This merger is just one step. We will all work to our strengths and there is no reason why we won't be able to handle it." But job cuts are expected, mostly in the IT departments, as one of the two computer systems is to be abolished. The biggest change, however, will come in the new areas accessible to the desk. BNP Oakreed is a subsidiary based in Hong Kong, and is likely to be a key player in the team's efforts to access this side of the market. As yet it has not touched the MTN sector and Cogoi is keen to urge it to do so. Other Asian currencies will also be available for increased trading, and the US market is another area the team will be trying to expand into. And the M&A activity is far from over. With calls for consolidation in Europe bouncing around the market, banks are flirting with each other. SG, after its embarrassing knock-back, forged an alliance with Spain's Banco Santander Hispano. And HSBC's presence in France after acquiring Credit Commercial de France could spur a flurry of activity. But Cogoi does not think BNP Paribas will get involved. He says: "As far as external growth is concerned, the focus is more on acquisitions within certain businesses we want to develop, rather than on a full-blown merger." The bank is trying to buy out the Belgian holding company Cobepa, but seven of Cobepa's 23 board members are unhappy with the offer. And there are plans to team up with supermarket chain Carrefour to offer on-line financial services. It has also set up a UK corporate trust department, practising the big-is-best philosophy that convinces so many banks. And issuers seem happy with the way things are going. Vogten, at EIB, says: "The market is still fertile and dynamic enough for the parties involved to make promises and be able to deliver them. Mergers like this always increase knowledge and expertise."