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Shelved IPOs, slumping share prices – it's a testing time for Australian Internet stocks. But, as Bina Brown reports, a raft of capital-raising exercises may go ahead. Is that wise?

Investors' love-hate relationship with telecoms supply in the high yield market continues unabated. But alongside the dominant industry, bankers expect growth from other sectors.

Go bankrupt in the US and you may be feted as brave. Go bankrupt in Europe and you may be labelled foolhardy.

When investors pulled money out of the US high yield market in the past, the European sector would quickly suffer because of its lack of independence.

As returns on government supply have fallen and fears about event risk in the high grade market have grown, more and more institutions have turned to the European high yield market.

This is the third of three articles regarding a heuristic approach to measuring counterparty credit risk. In the first part, author Robert Garzotto explained the approach broadly.

TELSTRA has added a step-up coupon protecting investors against future downgrades in an attempt to attract buyers to its Eu1bn 10 year bond issue, lead managed by BNP Paribas and Deutsche Bank, which will be launched around June 5. The added feature emerged from the Australian telecommunications giant's European roadshows which ran for a fortnight earlier in the month. It is the company's reaction to a widening of spreads on its existing bonds after a costly series of rating actions.

IN A surprise announcement yesterday (Thursday), Vodafone Pacific postponed its planned IPO just days before a global roadshow was due to begin. But parent company Vodafone Airtouch remains committed to listing its Australian operations should the volatility in global markets decrease and if sentiment towards telecommunications stocks improves. However, the window of opportunity in the coming months will be slim as the European and US holiday season looms and as Sydney prepares for the Olympics in September.

SALOMON Smith Barney completed an unlikely block trade for Digi.com on Wednesday, raising $135m (equivalent) for undisclosed sellers. Digi.com is the third largest mobile phone operator in Malaysia and the number one prepaid mobile phone company. The unexpected block deal was executed despite the declines on Nasdaq and falling telecoms share values around the globe. Digi.com shares closed at M$8.40 on Tuesday and Salomon placed the block of 67m secondary shares at M$7.60, a discount of 9.5% on Wednesday. Some 50% of the shares went to fund managers based in Asia, 40% to European institutions and 10% to US buyers. The deal comes just one week before Malaysia is reinstated in the Morgan Stanley Capital Index for Asia (ex Japan). As of June 1, regional index funds will need to focus more attention on the Malaysian market, which was pulled from the regional MSCI following the imposition of capital controls in 1998.

Australia Merrill Lynch on Wednesday completed a primary market fund raising of A$111.75m for AXA Australia Diversified Trust, the country's 10th largest real estate investment trust.

LVMH Moët Hennessy Louis Vuitton, the French luxury goods manufacturer and retailer, has launched a S$100m one year bond via lead manager Deutsche Bank. The bond launched LVMH's Euro-MTN programme, which Deutsche arranged earlier this month. It had a reoffer price of par with a coupon of 3.55% - in line with Singapore dollar deals launched by corporates earlier this year. Overseas Union Bank was co-lead manager.