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The Middle East corporate and bank syndicated credit market remains small. International syndicated loans to the region are largely in the realm of project finance - in 1997 70% of all loans to the Middle East were project finance-related.

So far 1998 has been a depressing year to be a project financier in Asia. The most booming project finance market of all has practically caved in on itself under the weight of the Asian crisis.

The syndicated loan market in Europe, the Middle East and Africa has accelerated its transformation this year from a closed, price-inefficient, bank-only financing market, to a liquid, price-efficient market financed increasingly by institutional investors.

The debate over pricing has raged on through the first half of 1998. Much of the focus centred on the $720m Al-Jubail Petrochemical Company (Kemya) financing which followed hard on the heels of the controversial $2.3bn Saudi Yanbu Petrochemical Company (Yanpet) transaction for sponsors Saudi Basic Industries (Sabic) and Mobil.

When Goldman Sachs, HSBC, Barclays and Deutsche launched the $6bn debt package for Pearson Plc, many observers worried whether the market could take another jumbo deal.

There was a time, not long ago, when it was cheaper to raise a syndicated loan for a telecom project in eastern Europe than it was for a similar project in the west.

With the recent Financial Accounting Standards Board ruling, corporations will now be responsible for publicly disclosing the market value of their derivative portfolios.

THE PEOPLE'S Republic of China has mandated Credit Suisse First Boston and Goldman Sachs as the two lead managers for a new benchmark Yankee offering to be launched when spread levels ease back to their pre-June levels. Officials from the PRC's Department of State Debt Administration commented that current market conditions do not support new bond issuance from China, which typically favours an opportunistic approach to overseas borrowing in the absence of a pre-defined funding requirement.

STANDARD & Poor's surprised the market on Monday when it placed Hong Kong's senior long term credit rating of A+ on CreditWatch with negative implications. The announcement was released just a few hours after the government revealed a sweeping package of new measures to avert further economic deterioration in the Territory. The agency cited "increasing financial sector strain and the growing likelihood of a protracted economic downturn that could challenge the ability of Hong Kong's government to maintain its prudent fiscal policies and traditional non-interventionist stance toward the economy".

INDIA'S ruling Bharatiya Janata Party (BJP) has moved to revive confidence in its 100 day old government by this week announcing its intention to raise $2bn to $5bn in what it termed Resurgent India Bonds. Taken alongside plans by the Democratic Socialist Republic of Sri Lanka to proceed with a benchmark $200m fixed rate offering in the fourth quarter, issuance from the subcontinent is showing signs of a mild revival despite an unabating wave of negative news.

ROADSHOWS are to begin in Hong Kong on Monday for the only major equity deal currently on offer in Asia, a $100m GDR for Taiwanese electronics company D-Link. Led by Salomon Smith Barney with ING Barings as joint-lead, bankers and analysts said that the networking products company is one of the few capable of capturing investor interest in current market conditions.

AN HIATUS of activity since the Republic of Korea's groundbreaking $4bn global, which has lasted almost three months, is finally on the verge of breaking. Premarketing took place this week for a novel zero coupon bond from the Korea Electric Power Corporation (Kepco), and roadshows are to begin next Wednesday for the Korea Asset Management Corporation's (Kamco's) debut DM1bn euro-fungible transaction.