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INTERNATIONAL demand for the China Unicom placement and IPO is improving, according to sources close to the deal. Morgan Stanley Dean Witter is in the middle of a roadshow to promote the sale of 2.46bn Unicom shares, as well as the potential 369m share over-allotment option. Demand for Unicom is increasing due to the improving investor sentiment to Nasdaq technology stocks and the improvement in global telecommunication share prices.

FOR the first time in over a month, the Australian corporate debt market witnessed new domestic bond issues, suggesting that conditions have improved enough for local issuers to return to the domestic market. The placement of three bond deals - for St George Bank, Westfield Trust and The Bank of Queensland - after several weeks of no primary activity, demonstrated that there is still investor interest for new domestic issues.

Australia * Standard & Poor's (S&P) raised its corporate credit ratings on Comalco, the aluminium producer, to AA-/A1+ from A+/A1. S&P also boosted its short term rating on Comalco Finance's guaranteed A$650m commercial paper programme from A1 to A1+. The upgrades follow Rio Tinto's acquisition of minority stakes in Comalco that increased its holding from 72.43% to 98.45%. Rio Tinto will move to compulsorily acquire the remaining interests. The acquisition is consistent with Rio Tinto's strategy of focusing on its key minerals, including copper, gold, iron ore, coal and aluminium. The ratings of Comalco will now track Rio Tinto's.

Australia * Bankers close to the Vodafone Pacific listing believe that if the market rally continues, the deal could be back in the market in the next few weeks. However, parent Vodafone Airtouch and its bankers must start the transaction within the next two weeks if the deal is to be completed before the European and US summer holiday season.

AFTER the disappointment of the Vodafone Pacific postponement, all eyes are now on the pending flotation of the insurance operations of NRMA, the New South Wales motoring organisation and Australia's largest general insurer. Premarketing begins next Monday and should lead to a placement of at least A$1bn to create a newly listed entity with a market capitalisation of at least A$4bn. Bankers hope the shares will begin trading in late July.

* European Investment Bank Rating: Aaa/AAA/AAA

* Commerzbank AG Rating: Aa3/AA-/AA-

* Bayerische Landesbank Girozentrale Rating: Aaa/AAA/AAA

In spite of a flood of new debt this week, swap spreads bounced off their lows, and by yesterday (Thursday) 10 year spreads were trading only 5bp-6bp tighter than a week ago. The mid-point was about 126.5bp to the 6.50% 2010 Treasury, while the five year mid-point was about 102bp to the 6.75% May 2005 Treasury. Even in the midst of the busiest week of the year in the dollar bond markets, swap spreads demonstrated a reluctance to stay at the new, narrower levels. Early in the week, they fell to a low of about 118.5bp at 10 years, but from then on regained a bid.

After many months' preparation, the syndication of the project debt facilities for the $420m conventional term loan for Thuraya Mobile Satellite System was launched this week by mandated arrangers ANZ Investment (global co-ordinator and joint bookrunner), SG Investment Banking (global co-ordinator and joint bookrunner) and Union National. Ahead of the launch of syndication, Arab Banking Corporation and National Bank of Abu Dhabi joined as arrangers and Crédit Lyonnais, MashreqBank and Standard Chartered came in as co-arrangers.

THE REPUBLIC of Turkey spectacularly prised open the US dollar bond market for emerging market issuers yesterday (Thursday) with a $750m 10 year global issue via lead managers JP Morgan and Morgan Stanley Dean Witter. The issue was driven by an unusually strong European institutional bid.