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Lloyds TSB demonstrated the remarkable new depth of demand in Europe for capital securities this week when it raised $2.8bn of upper tier 2 debt in a five tranche transaction lead managed by Goldman Sachs.

Lloyds TSB demonstrated the remarkable new depth of demand in Europe for capital securities this week when it raised $2.8bn of upper tier 2 debt in a five tranche transaction lead managed by Goldman Sachs.

Citibank this week completed the first collateralised loan obligation backed by pan-European corporate loans, as Salomon Smith Barney sold Eu280m of bonds in a Eu4bn synthetic securitisation. "The target customer base for our global relationship bank is the top 1,800 corporates in the world - about 40% of those are in Europe," said Marcus Giancaterino, head of new asset classes in Citibank's London securitisation group, which structured the deal with the bank's credit derivatives team. "We have freed up regulatory capital on a very high quality portfolio of loans."

UK non-conforming mortgage lender Kensington Mortgage Co launched its biggest securitisation yet this week, worth £190m, but felt the pinch of widening spreads in a weak credit market. Lead manager Barclays Capital placed all the triple-A notes, but had to price them at 45bp over three month Libor to clear, when its initial price talk had been 35bp to 40bp over.

International investors will get their first opportunity to buy bonds backed by New Zealand mortgages next week, when Westpac launches a $438m deal, including $357m of Eurobonds. Securitisation has made only tentative progress in New Zealand - apart from a government related transaction structured by Fay Richwhite in the early 1990s and some trade receivables deals through conduits, the country has produced just four MBS deals.

n Bank Labouchere plans to launch its fourth securitisation of retail equity leasing contracts on Tuesday. The assets are contracts with private investors who borrow money from Labouchere to buy blue chip stocks on the Amsterdam stock exchange. Lease Assets Backed Securities III BV will offer two fixed rate bullet tranches rated triple-A by Fitch IBCA - Eu65m of 'A' notes due August 2003 and Eu270m of 'B' notes expected to mature in August 2004, with a coupon step-up to 100bp over Euribor if the deal is not redeemed.

Nomura's principal finance group this week completed the first in a series of securitisations to refinance its £980m acquisition of Thorn Plc, which closed last October. Now called Thorn Ltd, the company comprises Thorn UK, Thorn Nordic, the leading consumer rental company in Scandinavia, Thorn Australia, which has a similarly dominant position in Australia and New Zealand, and two other businesses.

No one doubts that US investor demand for foreign equities is growing - or that accessing the US investor base is an important strategic objective for foreign companies.

The arrival of the euro has hit the US Yankee bond sector hard, with Europe's fast developing credit market providing an alternative and highly competitive source of funding for non-US corporate issuers.

New issue volumes are soaring in the US capital markets as investors soak up debt and equity offerings and as Wall Street's finest serve up an ever growing variety of products to tempt issuers and investors, at home and abroad.

The US high yield bond market has barely recovered from the traumas of the global debt correction of 1998.