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THE REPUBLIC of Lithuania has mandated Credit Suisse First Boston and Dresdner Kleinwort Benson to lead manage the country's first benchmark offering in a European currency. The Ba1/BBB-/BB+ rated sovereign originally asked 18 international investment banks to bid for the mandate on a DM300m five year to seven year offering. But the growing trend of issuance from the central and eastern European region in euros means the transaction may emerge in that sector when launched in around four to six weeks' time.

Rising M&A volumes are fuelling a boom in acquisition finance, the fastest growing area of the European syndicated lending market over the last year. The development of a more active secondary loan market and the wider use of grid pricing has given arrangers greater confidence to underwrite large deals and participants have been keen to sign up to loans that pay relatively high margins -- and which are usually refinanced quickly through bond issues or disposals. Across Europe the deal flow has been booming, with M&A deals of unprecedented size in a variety of countries being financed with relative ease in the loan market. But recently there have been signs that the acquisition finance market is getting more sticky. Has it already peaked?

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* TeleDanmark, the leading provider of domestic, international and cellular telecom services in Denmark, has established a $2bn Euro-MTN programme marking the arrival of the issuer in the international debt markets. The company was recently assigned ratings of Aa3/AA by Moody's and Standard & Poor's in preparation for its entry into the Euro-MTN market

* JP Morgan this week completed a placement to international institutions of shares in BHF Bank, selling just over 5.79m ordinary shares at DM75 per share. This represented a 6.6% stake and the vendor was Alte Leipziger Lebensversicherungsgesellschaft. * Dresdner Kleinwort Benson last week purchased 150m shares in Billiton, the London-listed mining company from SanLam, the South African insurance group. Several firms have pitched for the deal, but Dresdner KB won on a very aggressive bid that was around 158p on a closing price of 165p.

* Bayerische Vereinsbank Rating: Aa2

NORWEGIAN oil exploration company Ocean Rig Norway became the first issuer from the energy sector to tap Europe's rapidly developing high yield market this week with a two tranche transaction totalling $350m. The deal comes just weeks before a planned $200m offering by Canadian oil exploration company, State Energy Corp, which is scheduled for launch in June. Ocean Rig's Euro/144A issue comprises a $125m floating rate note paying a coupon of 475bp over Libor and a $225m fixed rate transaction launched at a spread of 460bp over US Treasuries.

* Volkswagen Financial Services NV Guarantor: Volkswagen Financial Services AG

Finland Merita and Postipankki have closed general syndication of the DM200m seven year multicurrency revolving credit for Soumen Osuuskauppojen. The loan has been oversubscribed and the borrower is considering an increase. Banks were offered three levels of participation -- senior lead managers taking DM40m for a fee of 10bp, lead managers DM20m for a fee of 7.5bp and managers DM10m for a fee of 5bp.

THE RUSSIAN Federation is to increase its Eurobond funding this year to replace more costly domestic bond issuance. Under the provisions of the 1998 budget, Russia is to raise more than $5.5bn in the international bond markets, versus a previously declared target of $3.5bn. This year the Russian Federation has raised the equivalent of $1.1bn via a DM1.25bn seven year issue and Lit750bn five year offerings. The sovereign's next issue may be in dollars, with Deutsche Morgan Grenfell and Goldman Sachs to act as joint lead managers. Benchmark issues in yen and euros are also expected.

Guy Hands, managing director of Nomura's Principal Finance Group, has made himself, his colleagues and his firm a fortune by using securitisation techniques to finance LBOs. Can others do the same?

THE PIPELINE of Euro-convertibles from continental and US issuers continues to grow with issuers lining up for the third and fourth quarters of 1998. However, for the next two months, convertible issuance will be eclipsed by the vast array of primary and secondary straight equity. Among the noteworthy deals in the market is the $540m offering of Lyons (Liquid Yield Option Notes) for SGS Thomson, the Franco-Italian micro-electronics group. The offering coincides with the sale of straight equity in the group which involves a capital increase and a secondary sale by the two respective government shareholders.