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PROOF THAT global demand for CBs from Taiwan technology companies is far from exhausted came earlier this week with the speedy and successful completion of the $200m Delta Electronics convertible. Lead manager and bookrunner Warburg Dillon Read launched the issue on Monday at 3pm and completed the deal within eight hours. Warburg received more than $1bn of orders for the bonds. The Delta bonds are zero coupon and zero yield to maturity. Like the FET and Acer SIZes structures, investors enjoy put options at par at the end of each of the first four years, thereby providing the principal protection that Asian CB investors lacked before the Asian crisis.

China The long awaited sale by China National Petroleum Corporation (CNPC) of 15% of its PetroChina unit will be premarketed next week. The roadshow will start in the third week of February. Goldman Sachs is joint lead with China International Capital Corporation.

Australia and New Zealand Banking Group (ANZ) is finalising plans for its debut euro transaction, set to be a Eu500m-Eu1bn five year fixed rate issue via Deutsche and Merrill Lynch priced in the high teens over Euribor. Long a presence in the dollar floater market, the bank has mostly shied away from the euro and tributary markets. But Peter Marriott, ANZ's chief financial officer, hopes that the benchmark will establish the bank's name in Europe as the borrower aims to raise 60% of its A$6bn 2000 funding in the Euromarkets.

Australia and New Zealand Banking Group (ANZ) is finalising plans for its debut euro transaction, set to be a Eu500m-Eu1bn five year fixed rate issue via Deutsche and Merrill Lynch priced in the high teens over Euribor. Long a presence in the dollar floater market, the bank has mostly shied away from the euro and tributary markets. But Peter Marriott, ANZ's chief financial officer, hopes that the benchmark will establish the bank's name in Europe as the borrower aims to raise 60% of its A$6bn 2000 funding in the Euromarkets.

ARGENTINA plans to launch a domestic bond debt swap on February 10 of at least $1.75bn in size. The deal will involve the issue of two local bonds, called Bontes, maturing in 2003 and 2005, in exchange for a series of local bonds and the FRB Brady bond. Up to 30% of the total size of each bond can be bought for cash.

Hong Kong BA Asia has been mandated by Florens Container Inc to arrange the extension of the company's $120m two year letter of credit facility signed in May 1998. That deal was also arranged by BA Asia and paid an L/C fee of 100bp and a 25bp extension fee.

Europe * Owengate Keele Plc

* GE Capital Australia Funding Pty Ltd Guarantor: General Electric Capital Corp

Standard Chartered Bank and Bank of Tokyo-Mitsubishi are venturing into new waters with a $100m 364 day loan for Banamex. This is the first loan for a Latin borrower to be targeted solely at Asian and Middle Eastern banks.

Do we hear the sound of falling bodies from the battlements of Commerzbank in London? Is there already enough blood on the pavement to delight the Dracula Gourmet Club, which salivates over the prospect of slowly-cooked jugged hare and oozing boudin noir for breakfast? Did Regis 'Reggie' Fraisse, the reclusive Frenchman, who packed his Camembert sandwiches and walked away on New Year's Eve, leave the front gates open for the barbarians outside to come in and put every last man, woman and child to the sword?

Both the Fed and the ECB finally raised interest rates this week but while the 25bp European increase was less expected, the US dollar market was hit by other difficulties. Strong economic data last Friday persuaded any doubters that the FOMC meeting would result in a quarter point rate hike, but the swap spread widening that followed closed the market to all but borrowers such as Italy that had already committed themselves.

After several weeks of gentle erosion in credit spreads, volatility has returned with a vengeance. Ten year dollar swap spreads started last Friday at 71bp over 10 year cash; yesterday (Thursday) they were bid up to close to 100bp over Treasuries before settling at about 94bp. "It's like the autumn of 1998 again," said one dealer. More to the point, it resembled last August as a period of dramatic spread widening amid a relatively benign economic landscape. The stronger-than-expected GDP numbers last Friday put the cat among the pigeons, but the panic initiated by fears of evaporating Treasuries and a radically inverting curve proved more important this week. In the middle of all this, the Federal Reserve's decision to hike rates by an expected 25bp to take the Fed Funds rate to 5.75% underpinned the main event.