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Pfandbrief issuers have ridden a wave of demand this year as portfolio reallocation in the euro zone has led to strong demand for almost all types of spread product.

The development of a credit culture among European fund managers took a long time to get underway. The advent of the euro has made its momentum unstoppable.

Devolution and the need to diversify their sources of funding are prompting Europe's regional and municipal credits to consider the new euro bond market.

The issuers facing arguably the toughest challenges in euroland are EU sovereigns. Aside from the benchmark issuers, Germany and France, state treasury officials have suddenly found themselves as a part of Europe's credit markets.

Everyone knew that the introduction of the euro would kickstart the development of a credit market in Europe. But few could have predicted the speed at which it would take off.

After a month of marketing on three continents, Hong Kong real estate company Sino Land Co Ltd launched its $301.3m property securitisation last Friday. The deal blew out, as investors leapt at the opportunity to buy Asian risk through an unusually conservative structure. "Demand was overwhelming - we could easily have placed all the bonds in either Europe or the US," said KV Prabhakar, head of asset backed syndication and trading at sole manager Deutsche Bank in London. "The triple-A tranche was more than three times oversubscribed, and the double-A between two and 2-1/2 times."

An imminent new issue from Mahanagar Telephone Nigam Ltd (MTNL) is set to breathe new life into the sluggish Indian privatisation process. Deals are also expected from Essar Steel and Gujarat Adani Port despite political instability in the country. Bankers said beauty parades should begin within the next two weeks for a further selldown of the Indian government's stake in MTNL. A total of 19m shares will be sold as GDRs, raising around $92m.

n Hong Kong property developer Sun Hung Kai Properties announced last Friday that it has launched a first US dollar deal off its recently established Euro-MTN programme. Led by Morgan Stanley Dean Witter, the A3/A rated group placed out $90m in seven year floating rate paper to a single European investor at a spread of 105bp over three month Libor. Bankers said that the size and tenor of the issue were dictated by a specific funding need on the part of the group, which has virtually no outstanding paper in the market.

Australia Cable & Wireless Optus and Telecom New Zealand have announced that they may float South Cross, in a deal which could raise up to A$1bn.

The Australian domestic bond market received a long expected and welcome boost yesterday (Thursday) with the announcement that interest withholding tax (IWT) is likely to be lifted at the end of the month. The prospective withdrawal marks a major development for Australia's capital markets, leading to a likely convergence of the domestic and offshore markets for Australian debt and offering the fast growing corporate bond market a much wider investor base.

Lehman Brothers will launch a $150m convertible bond for Taiwan's ASE Test next week in a deal which will gauge the level of confidence in the recovery of the Dram market. The Nasdaq listed company is the largest independent semiconductor tester in the world. Only $100m of the deal will be placed to institutional investors, with the rest going to the parent company ASE Inc. The bonds will be convertible into Nasdaq listed shares and will be sold under Rule 144a.

The Philippines National Power Corporation (Napocor) has re- activated plans to access the international capital markets following a hard won victory to secure a power rate increase from the government.