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PREFERRED Mortgages has issued its debut mortgage backed security, adding a new name to the growing market for UK sub prime mortgages. Launched by Greenwich NatWest via special purpose vehicle Preferred Residential Securities no 1 plc, the £50m bond marks another breakthrough -- Financial Security Assurance has provided a triple-A wrap, the first from a monoline insurer in the UK market for non-conforming mortgages.

* Two headline Italian securitisations have moved a little closer with the award of mandates. Paribas looks to have won the mandate to securitise as much as Lit1.5tr of non-performing assets for Banca di Roma, while Greenwich NatWest has emerged as near certain holder of a mandate for a Lit500m to Lit1bn non-performing loan security for Banca Monte dei Paschi di Siena. Neither of the winning banks would comment but the mandates are choice prizes; despite the potential pitfalls of Italian securitisations, particularly of non-performing assets, the country is widely perceived as one with substantial potential.

THE BANK of Thailand has revealed a scheme that will aid the recapitalisation of the country's banks by offering a five year money back guarantee to investors. This should give them the confidence they need to invest in Thailand's distressed banking sector. Bankers gave the scheme a cautious welcome. Said one: "It's a curious device -- essentially a put option at issue price and a deferred nationalisation programme. More importantly, it provides the banks with cost free capital for five years without burdening the government." He said the move could help to create the wrong mentality among management but overall it was a clever and positive step.

MALAYSIA has established a new vehicle to aid the recapitalisation of the country's banks. But bankers, analysts and investors remain sceptical that the fund, named Danamodal Nasional Bhd, will sucessfully attract international capital. Said one Kuala Lumpur-based investor: "Any investment in the fund requires an enormous leap of faith. Rather than taking a decision on which bank to invest in you have to trust the board of Danamodal."

* ABN AMRO has emerged as the surprise frontrunner for the $300m mandate for a World Bank guaranteed deal from the Electricity Generating Authority of Thailand (EGAT). Although the electricity generator's decision has yet to be made public, Thailand experts believe that the Dutch bank has secured its first major bond mandate from the region. In doing so it beat off strong competition from other short-listed banks including Barclays Capital, Goldman Sachs and Lehman Brothers.

Australia HIH Winterthur's instalment receipts suffered in the aftermath of Wall Street's fall this week. The deal itself failed to raise as much as expected. The instalment receipts were priced at A$1.60 and raised A$436.5m.

INVITATIONS to bid for mandates in the Korean privatisation process should be sent out on Monday, said bankers. A second wave of sales has already been announced, and should begin in late 1999. That wave includes the sales of a number of Korea Telecom units as well as business units of Daehan Oil Pipeline Corp and Korea Gas.

PRIMARY market activity from Greater China is showing signs of stirring. This week saw the quiet launch of a small issue by the Mass Transit Railway Corporation (MTRC), Hong Kong's de-facto sovereign borrower, and moves by the State Development Bank of China (SDB) to select lead managers for a new benchmark dollar financing. Under the sole lead management of Morgan Stanley Dean Witter, a $50m FRN by the MTRC almost passed unnoticed in the primary markets. However, the significance of the private placement was not lost on sector analysts who said that the A+/A3 rated group's decision to launch such a small deal could be put down to one of three factors. "This could simply be an opportunistic trade based on reverse enquiry demand," said one.

THE REPUBLIC of the Philippines is to decide on its $500m equivalent financing next Tuesday (August 11), following bids from a 13 strong procession of investment banks which descended on Manila this week. Driven by a belief that the deal represents one of the few viable mandates from the region in the coming months, the beauty parades attracted the bulk of Asia's investment banking community as well as their emerging markets colleagues from London and New York.

THE INDONESIAN government this week announced that the privatisation of PT Telekomunikasi Indonesia was being postponed, a delay bankers said may be symptomatic of problems facing other deals from the country. A number of unresolved internal problems and poor market conditions were cited as the main reason for the postponement. However, bankers familiar with the company said government obstinacy and unwillingness to accept market valuations also played a significant role.