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Wachovia Corp, a regional US bank holding company, yesterday (Thursday) took advantage of a post-July 4 holiday lull in global bond supply to resurrect a $550m five year deal it had abandoned three weeks ago. The deal, led by Merrill Lynch, carried a 7.45% coupon and was priced at 99.909, to yield 7.472% or 133bp over Treasuries - 2bp tighter than its 135bp area spread talk. The offering was cancelled after Wachovia announced a profit warning in mid-June.

Wachovia Corp, a regional US bank holding company, yesterday (Thursday) took advantage of a post-July 4 holiday lull in global bond supply to resurrect a $550m five year deal it had abandoned three weeks ago. The deal, led by Merrill Lynch, carried a 7.45% coupon and was priced at 99.909, to yield 7.472% or 133bp over Treasuries - 2bp tighter than its 135bp area spread talk. The offering was cancelled after Wachovia announced a profit warning in mid-June.

Belgium Lead arranger ABN Amro has brought in BBL/ING, Fortis, KBC and Sumitomo Bank to each underwrite Eu750m tickets on the Eu6bn loan for Belgian brewer Interbrew.

Supply from the German cable sector continues to loom over the high yield market, with Merrill Lynch due to start premarketing a $555m equivalent bond transaction from E-Kabel LLC next week. E-Kabel LLC is raising the financing after its acquisition of a majority stake in Deutsche Telekom's cable TV network in the Hesse region. The deal follows a similar financing from Callahan Nordrhein Westphalen (CNW), which issued $775m equivalent of bonds via Merrill Lynch and Salomon Smith Barney at the end of June.

Market report: Compiled by Frank Hracs, TD Securities, Toronto

Issuance is on a par with a record 1999, despite a slow start to the year. But, as Philip Moore discovers, more interesting are the changes in the type of issuers coming to the market In theory, the outlook for the issuance of European convertibles has never been better. On the one hand, supply of new issuance should be driven by continued M&A activity, corporate restructuring, fundraising from new economy companies and a more benign fiscal environment.

Mandated lead arranger Citibank underlined its position as corporate Finland's leading arranger of bank debt this week with the launch of the general syndication of the Eu1.7bn acquisition finance facility for Metsa-Serla Oy - the largest syndicated loan to be raised in the country. The loan is structured into two tranches. Tranche 'A' is a Eu1bn 364 day revolver while tranche 'B' is a 700m five year revolver. Both tranches are priced at an initial margin of 50bp over Libor, which can step up to a high of 70bp based on the borrower's ratings. The commitment fee is 33% of the margin on the 364 day tranche and 50% of the longer dated facility.

Mandated lead arranger Citibank underlined its position as corporate Finland's leading arranger of bank debt this week with the launch of the general syndication of the Eu1.7bn acquisition finance facility for Metsa-Serla Oy - the largest syndicated loan to be raised in the country. The loan is structured into two tranches. Tranche 'A' is a Eu1bn 364 day revolver while tranche 'B' is a 700m five year revolver. Both tranches are priced at an initial margin of 50bp over Libor, which can step up to a high of 70bp based on the borrower's ratings. The commitment fee is 33% of the margin on the 364 day tranche and 50% of the longer dated facility.

CAISSE Nationale des Caisses d'Epargne et de Prévoyance (CNCEP) has mandated Deutsche Bank to arrange a Eu10bn medium term note programme. The programme will be a multi-currency facility, and replaces a programme set up in 1994, which was never used. Signing is expected in September.

A brace of other notable landmark deals from new economy borrowers came in February when, for the first time, companies listed on the Neuer Markt raised funding via the equity market. Although some sections of the press appeared to be confused as to which of the two came first, at HypoVereinsbank in Munich head of equity linked sales Günther Bonk is adamant that the Eu75m convertible led by his bank for Augusta Technologie nipped into the market first. The Augusta transaction was followed within hours by a Eu400m convertible - increased from an originally targeted Eu300m - launched by the German media company, EM.TV, via WestLB Panmure. Bonk says that he was delighted with the international response to the Augusta deal, which was eventually offered with a 4% coupon and a premium at the top of its bookbuilding range of between 17.5% and 22.5%. "It went very well because Augusta has such an excellent equity story to tell," says Bonk. "It is a holding company with nine subsidiaries, each of which is profitable, and eight of which operate with return on equity (ROE) levels of more than 15%." It was this strength which prompted HypoVereinsbank to give Augusta an implied rating of BB+, although Bonk adds that in part this reflected the company's small market capitalisation. On the basis of pure fundamentals, he says, Augusta would be a BBB credit.

Czech Republic Zagrebacka Banka's Eu125m term credit facility has been launched into general syndication by mandated lead arrangers Bayerische Landesbank (books), Citibank (books), Commerzbank (coordinator, books), Dai-Ichi Kangyo (facility agent) and WestLB (documentation).

Supply from the German cable sector continues to loom over the high yield market, with Merrill Lynch due to start premarketing a $555m equivalent bond transaction from E-Kabel LLC next week. E-Kabel LLC is raising the financing after its acquisition of a majority stake in Deutsche Telekom's cable TV network in the Hesse region. The deal follows a similar financing from Callahan Nordrhein Westphalen (CNW), which issued $775m equivalent of bonds via Merrill Lynch and Salomon Smith Barney at the end of June. Like the CNW deal, which was priced at the wide end of the indicated price range, investors said that E-Kabel will not be an easy credit to sell. The fact that investors were aware of E-Kabel's plans to tap the market made the execution of the CNW transaction harder, but the structure of the German cable market was another factor that helped to dampen demand. Those same considerations will play a part in determining the extent of appetite for the deal from E-Kabel, investors said. The company, which is owned by Brigadoon - the venture capital business of UK cable operator NTL - along with UK private equity group, Klesch, is the only firm to date outside CNW to have acquired cable assets from Deutsche Telekom. Deutsche Telekom is selling stakes in its cable operations in nine regions in total. CNW's lack of direct relationships with customers was of particular concern for some investors, and similar reservations are likely to affect the deal from E-Kabel and other transactions that follow. "It is not easy to understand CNW from a relationship perspective and partly for that reason we did not play in the deal," said a high yield investor in London. "The German cable market is different from the UK market, for instance, where companies like NTL have relationships with all of their customers. In Germany, you have other cable operators standing in between, so it is hard to see CNW or E-Kabel as classic cable stories." "We did not play in the CNW deal because we were uncertain about how economically viable it will be to develop a cable play in Germany," added a Paris based high yield investor. "We were uncertain because of the question of relationships and also because it is a long time to market for these companies. Deutsche Telekom's cable networks are relatively old and will take years to upgrade. "As a result, we were not especially positive about the transaction, although it would be wrong to say that we were wholly negative." Along with $150m of zero coupon notes, which were priced to yield 16%, CNW issued $400m and Eu225m of cash pay notes, with a 14% coupon. Despite being priced at the wide end of the range, some bankers said the deal nonetheless reflected well on the issuer. "It was a large transaction and the cable sector has not been performing well, but the company got the deal away at a reasonable yield," said a co-manager of the transaction. Three bond issues from industrial issuers are roadshowing at the same time as the E-Kabel transaction, which Merrill Lynch is looking to price by the end of the month. Ciba Specialty Chemicals' performance polymers division, which has been renamed Vantico, is approaching investors for Eu250m, following finalisation of the company's buy-out by Morgan Grenfell Private Equity. CSFB is lead managing the transaction. In addition, RJ Tower Corp, which is a US based manufacturer of automotive parts, is in the market, for Eu200m of 10 year bonds, via Bank of America and Chase. And in the sterling market, UK power station Drax is seeking £400m equivalent of senior secured bonds via Goldman Sachs, along with £250m equivalent of high yield bonds via Goldman Sachs and DLJ. The financing, which will be divided between dollar and sterling tranches in both the senior and subordinated deals, is partly refinancing last year's acquisition of Drax by US energy company, AES Corp.