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INTERNATIONAL bond issuance from central and eastern Europe took another bold step forward this week when bookrunner Warburg Dillon Read launched a Eu150m three year issue for Estonia’s Hansabank — the first major Euromarket offering by a bank from the region since before the Russian crisis in August 1998.

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European high yield investors, who have been threatening to lose interest because of the parlous state of the US sub-investment grade bond market, finally reacted at the end of last week following the pricing of a $1.6bn offering from ISP company Winstar. The transaction was divided between three dollar tranches and a 10 year offering in euros, which came with a refreshing 12.75% coupon.

The International Finance Corp revised its plans of a 10 year maturity for its debut $1bn global this week, preferring to stick to five years and venture no further along the curve. Given the volatility in US markets, many observers thought this wise. Treasury officials at the IFC said the distress suffered by agencies had been crucial to the decision to go ahead. After Gary Gensler's comments last week, and Phil Gramm's announcement this week that Senate hearings on the status of agencies would be held this summer, capital has been exiting agency product rapidly. The major beneficiaries have been supranationals, and IFC's $1bn five year note also profited .

India The $180m one year fundraiser for Oil & Natural Gas Corp, arranged by BA Asia, has been launched to underwriters. Once the co-arranger group is formed the deal will be launched into general syndication.

That traditional investment banks are under threat in the internet era is clear: on-line brokers stealing a large chunk of share dealing and investors moving their money out of old economy stocks into internet start-ups are just two examples of how the web is changing financial markets. But perhaps the most immediate worry for banks is retaining employees tempted by the promise of making a fast buck in the dotcom world.

Goldman Sachs as sole lead bookrunner and BNP Paribas and Crédit Agricole Indosuez as joint arrangers have launched one of Europe's largest leveraged financings to co-arrangers. The deal is the leveraged recapitalisation of the Elis Group, the successful French laundry company bought out in 1997 by BC Partners, the US equity sponsor. The recapitalisation involves the raising of $1bn of senior debt and $130m of subordinated debt and will enable BC Partners to take its shareholder loans out of the transaction.

Bahrain The $300m five year term loan for Arab Banking Corporation has been launched to co-arrangers, offering 45bp for tickets of $15m. The loan pays a margin of 45bp.

Netherlands * Dresdner Kleinwort Benson and ABN Amro will launch the sale of between Eu500m and Eu1.5bn of Royal Dutch shares next week following the break-up of a holding company, Dordtsche Petroleum, whose only asset is the shares. The deal is likely to be an accelerated offer, according to bankers.

The Korea Development Bank completed its debut Eu500m five year bond issue yesterday (Thursday) - forcing European investors to prove their confidence in the recovery of the Korean economy and in the process forging an important benchmark for itself and Korea. Lead managed by Barclays Capital and Deutsche Bank, the offering carries an annual coupon of 6%, an issue price of 99.513% to yield 120bp over the Bobl 134 government bond.

* THE PROVINCE of Buenos Aires last Friday (March 24) issued a Eu50m tap of its outstanding Eu300m 10.75% March 2005 euro bond via Credit Suisse First Boston and Dresdner Kleinwort Benson. Originally launched for Eu250m on February 17 at a yield of 10.81% and a margin of 565bp over the 4.25% February 2005 Bobl on the basis of a 99.75 fixed re-offer price, the issue was increased by Eu50m on February 21 on the same terms.

Recently barely a day has passed without the swap market hitting a new historic high and this week proved no exception. After renewed worries about the credit-worthiness of the agency sector were digested by US capital markets, the 10 year swap closed at 125bp over Treasuries on Wednesday - yet another 10 year record end-of-day price. On Thursday, the 10 year traded at 128bp over Treasuries - beating last week's record intra-day price - before slumping back to the 125bp level. Corporate spreads followed agencies and swaps. But swap dealers report that trading volume is still extremely thin and the market was moving up on only very small trades.