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The Islamic Republic of Pakistan launched its long expected Eurobond exchange this week, with market observers uncertain whether the terms are acceptable enough to make the potential $623m transaction viable. Driven by the Paris Club's enforced comparability treatment of all creditors, the exchange marks a key turning point in the way that future sovereign debt restructurings will be handled as well as a shift in the precedence accorded to Eurobond holders over other creditors. However, with bondholders conscious of the fact that the country did not want to initiate an exchange, some experts have argued that investors may decide to gamble on a government showdown with the Paris Club over the repayment of a $150m Eurobond which falls due on December 22.

Korean entities are preparing a fresh end-of-year assault on the Samurai market, taking advantage of renewed retail appetite for emerging market product as well as the increasingly competitive costs of funds on offer. The Korea Development Bank (KDB) is set to launch a new benchmark for Korean borrowers with a ¥30bn three year offering planned next Wednesday via Daiwa and IBJ. Korea Electric Power Corporation (Kepco) is considering a return to the market in the next few weeks.

Asian internet related companies Korea Thrunet and I-Cable completed spectacular Nasdaq issues this week even as deals for traditional industry giants such as tobacco fell by the wayside. The success of the Hong Kong and Korea based technology companies drives a still-wider gap between the burgeoning internet sector and its less glamorous non-tech counterparts in Asia.

Investor appetite for domestic Australian corporate paper will be tested next week with the probable launch of issues for Lend Lease and C&W Optus. Both borrowers are preparing to launch debut transactions in the face of a marked slowdown of activity before year end, with bankers saying a successful transaction would put a cap on a year of rapid development for the domestic market. Observers added that while both companies are regarded as domestic heavyweights, each transaction faces unique challenges.

In an attempt to broaden the reach of the Singapore's domestic bond market, the government is believed to be considering lowering its rating threshold to allow triple-B rated credits greater access. The changes are expected to be announced within the next month following an annual review of Monetary Authority of Singapore (MAS) notice 757 which covers issuance criteria and the government's policy on the internationalisation of the Singapore dollar.

Morgan Stanley Dean Witter aims to price its ¥21bn securitisation of Japanese non-performing real estate loans late next week. The bank will sell the Euro/144A deal primarily in Japan, but has also received interest in Europe and the US. International Credit Recovery-Japan One Ltd will comprise three tranches of notes rated triple-A, double-A, single-A and triple-B by Fitch IBCA and Moody's. Standard & Poor's is still finalising its ratings analysis.

Asia n J-Shop Corp III

Australia Sonic Healthcare has mandated ANZ Investment Bank, Citibank Australia and Westpac Banking Corp to arrange a A$350m acquisition financing.

THE ITALIAN government will complete its last privatisation sale of the year with the divestment of its 56% stake in Europe's largest motorway network operator, Autostrade. The stock is being sold by holding company Iri in a global offering designed to maximise the take-up of shares in both the local and international equity markets. BCI and Warburg Dillon Read are running the book. They aim to raise Eu4bn in proceeds for the government.

THE ITALIAN government will complete its last privatisation sale of the year with the divestment of its 56% stake in Europe's largest motorway network operator, Autostrade. The stock is being sold by holding company Iri in a global offering designed to maximise the take-up of shares in both the local and international equity markets. BCI and Warburg Dillon Read are running the book. They aim to raise Eu4bn in proceeds for the government.

Was there any truth at all behind the rumour that Chase Manhattan was about to take over Warburg Dillon Read? Remember our comments last week, that this daft story was the work of an underground left-wing student organisation which was trying to boost the circulation of its special 'rag week' magazine.

BBV has given a fillip to the co-arranging phase of the senior debt backing the leveraged buy-out of Torrepapel by committing Eu125m as a senior co-arranger. BBV's commitment follows the launch of the co-arranging phase by Deutsche Bank London at the end of last week.