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GOVERNMENT bond markets sold off on Tuesday following the release of stronger than expected NAPM figures in the US. Already spooked by the Fed's shift to a tightening stance, the market is holding its breath ahead of non-farm payroll data today (Friday). The employment data is to hold the key to sentiment for coming weeks. While strong data could push the long bond over 6%, it could also offer the market a new bottom and the potential for more stability. That could provide a springboard for new issuance.

CSFB AND MPS are marketing stock in Banca Monte dei Paschi di Siena (MPS) following the approval this week of the deal by Consob, the Italian stock exchange authority. The Italian bank - the world's oldest - is being floated in a deal that could raise as much as Eu2.1bn.

TWO OF central and eastern Europe's leading credits braved the volatility of the emerging markets by launching euro denominated transactions - with mixed results. The City of Prague made its debut in the single currency markets - only its second international bond issue - when it brought its long awaited Eu200m 10 year transaction via ABN Amro and Deutsche Bank.

THE Eu2bn one year credit for GEC Plc has been massively oversubscribed in syndication and will be increased to Eu2.5bn, Euroweek can reveal. Even after the increase, lenders still had to be scaled back. While few bankers doubted GEC's popularity in the loan market, the immense appetite for the company's paper has surprised nearly all those involved in the Euroloan market - it has raised Eu8.5bn in little over 12 months.

NATIONAL Bank of Greece is to raise between $250m and $500m through a convertible bond offering to be launched in the next two weeks. Merrill Lynch and Warburg Dillon Read will act as bookrunners on the offering. The deal has been mooted for some time and will be the first equity linked issue from Greece since the privatisation bonds in 1998. The notes are likely to be sovereign bonds backed by ordinary shares in National Bank of Greece, a structure that analysts this week hailed as the ideal way to attract investors interested in Greek bank stocks.

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* National Australia Bank Ltd Rating: Aa3/AA

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Greg Lomas has resigned from Warburg Dillon Read and will join CIBC. At CIBC he will focus on acquisition finance, including leveraged deals, on the distribution side. Lomas was a director in WDR's loan syndicate where he specialised in LBOs and reported to Jonathon Macdonald.

THE PORTUGUESE government will shortly embark on the fourth phase of its privatisation sale of Portugal Telecom (PT). The operator has been a firm favourite with sector specialists over the last four years, since the group's IPO in the summer of 1995. Lead managers Banco Essi, Merrill Lynch and Warburg Dillon Read will run the deal which involves the state sale of around 13.5% of the group's equity capital - some 25,650,000 shares.

SPECULATION that Pernod Ricard was in discussion with relationship banks over raising a jumbo facility to back a bid for Allied Domecq's branded drinks business was rife this week. The talk was of the French company tapping the Euroloan market for between Ffr40bn and Ffr50bn through as many as four banks - possibly Banque Nationale de Paris, SG, Chase Manhattan and JP Morgan.

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