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While officials in the loan market were looking out for a super-jumbo acquisition financing for France Télécom or another of the largest European telecoms players, British Telecommunications has emerged with what could be the first of this year’s super-jumbo telecom deals.

While officials in the loan market were looking out for a super-jumbo acquisition financing for France Télécom or another of the largest European telecoms players, British Telecommunications has emerged with what could be the first of this year’s super-jumbo telecom deals.

BNP Paribas and Natexis sold a Eu157.4m five year convertible for Bull this week with the deal closing six times oversubscribed. The French computer services company's first appearance in the bond markets came at favourable terms.

Credit Suisse First Boston this week launched a Liquid Eurobond Index (LEI) designed to measure the performance of liquid, tradable issues through pricing based on actual transactions and the market-making activities of the bank. The rationale for the new index is to offer investors an alternative to indices which include many bonds that may qualify for an index because of their size, or for other reasons, but which rarely trade and can distort the performance of an index.

Deutsche Bank’s goal in taking over its rival Dresdner was to create a European powerhouse capable of competing on a global stage with the leading US investment banks. But with Deutsche’s direction now unclear and Dresdner in disarray, the real benefactors of the merger that never was are banks such as Merrill Lynch and Lehman Brothers. With German corporates growing increasingly uneasy about relying on the leading German commercial banks, or Landesbanks under threat from the European Commission, investment banks around the globe are battling for their business. But will the new opportunities of the euro corporate market and pressure from non-German houses be tempting enough to cut the ties of relationship banking?

DEUTSCHE Telekom's Eu10bn-plus secondary offering will establish a new benchmark for retail offerings with the government's third selldown in the European giant to be sold worldwide for the first time. The Deutsche Bank, Dresdner Kleinwort Benson and Goldman Sachs-led deal continues a tradition of innovation from Deutsche Telekom. In June 1999, the DT2 deal sold shares to more than 600,000 private investors outside Germany.

Czech Republic Arranger Sumitomo has signed banks into the Eu85m EIB guarantee facility for Czech power utility Cez. The facility raised around Eu130m but was not increased as it is tied to an EIB loan. Arrangers are San Paolo-IMI and the European Investment Fund.

Argentina * Argentina

Moody's has downgraded the juniormost tranche of Chêne Finance Ltd, the securitisation of French apartment blocks for property firm Compagnie Vauban. Greenwich NatWest lead managed the Eu228.67m deal in February 1999. The Eu53.357m 'D' tranche was originally rated Ba3 by Moody's only, but has now been downgraded to B1. Moody's has confirmed ratings of Aa2, A2 and Baa3 on the other three tranches. "Net rental receivables generated by the property portfolio have remained unchanged since closing," Moody's said. "However, net cash flow available for debt service has been impacted negatively due to capital expenditures and other refurbishment costs that have been, and will continue to be, higher than originally contemplated. At closing, a capital expenditure reserve fund of Eu5.3m was established, which has been completely utilised."

Moody's Investors Service has restructured its European structured finance group after the departure of two senior officials. Managing directors Robbin Conner and Catherine Gerst, two of the group's three co-heads, have both left in the last few weeks for careers with other companies, believed to be outside the rating industry.