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LEADING Czech commercial bank Komercní banka this week became the first central and eastern European borrower to issue a major subordinated debt transaction in the international bond markets with the launch of a $200m 10 year non-call five Euro/144A offering via Credit Suisse First Boston and JP Morgan. Issued through the bank's Dutch registered financing vehicle, Komercní Finance BV, the groundbreaking Baa3/BB/BBB- rated offering featured a fixed/floating rate coupon to yield 350bp over the 5.75% April 2003 US Treasury for the first five years. This steps up to 500bp over six month dollar Libor thereafter if not called. The lead managers said that by pricing the deal at the generous end of the 337bp-350bp indicated spread range they had ensured a strong bid for the paper in a volatile new issue environment. That enabled them to increase the deal to $200m from $150m at launch. Although a number of Slovak and Estonian banks have previously issued small US dollar or Deutschmark denominated subordinated debt transactions, those issues have effectively been private placements. Komercní's much larger public transaction marks the de facto creation of a new asset class for the central and eastern European region.

WITH only two deals closing in Kazakhstan so far this year, compared with nine in 1997, observers might assume that lenders have pulled back from the country. But this is not the case. The two deals launched -Kazkommerts Finans's $20m one year term loan and Ispat Karmat's $250m project finance facility -were both extremely successful. The Kazkommerts loan, carrying a margin of 375bp, which is 75bp more than it was paying last year, was increased to $35m as a result of oversubscription in retail. According to participants, its success was down to two factors. "We like the country's economic situation -at least we prefer it to Russia's -and we like the borrower, which is one of Kazakhstan's most powerful banks and one which developed a good track record in 1997," says one.

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Argentina BancAmerica Robertson Stephens, Société Générale and Barclays Bank (Miami) are in the market with a $150m two year loan-style FRN for Banco Hipotecario Nacional. The loan has a one year put option and will be used for general corporate purposes.

THE UNITED Mexican States tapped the Escudos market for the first time this week as part of its continued effort to diversify its European investor base. The Esc18.5bn floating rate offering, led by Banco Finantia, was priced at par with a coupon of six month Lisbor plus 180bp, a spread which was said to have attracted good interest initially but looked slightly expensive, according to some, once dollar spreads in the emerging markets widened out on midweek.

MANNESMANN, the German industrial giant, revealed details of its capital increase this week against the backdrop of an equity market bolstered by the surprise announcement that Chrysler and Daimler-Benz will merge. Deutsche Morgan Grenfell and Merrill Lynch are leading the DM3bn Mannesmann deal with DMG running the books on the local tranche, supported by a syndicate of domestic savings and co-operative banks assembled to target German retail investors. Co-lead managers in the German tranche will be Bayerische Landesbank, Commerzbank, DG Bank, Dresdner Bank, Goldman Sachs, Merrill Lynch and WestLB.

THE CITY of Moscow adopted a safety first approach this week, setting its debut Eurolira transaction this week at Lit400bn, in the middle of the Lit300bn-Lit500bn indicative issue size range. The city and its lead manager Chase Manhattan had to face up to the twin challenges of a jittery emerging market debt sector and competition from the Russian Federation's recent maiden lira Eurobond. With a 9.875% coupon -- at the midpoint of the pre-launch 9.75%-10% coupon range -- the Ba3/BB- rated Moscow issue was priced on Tuesday to yield 10.02% or 525bp over three year lira swaps at a fixed re-offer price of 99.64 -- at the top of the 500bp-525bp indicative spread range. That represented a 70bp-pick-up over the similarly rated Russian Federation's Lit750bn 9% five year issue, which was trading at 455bp over lira swaps at the time, from 435bp at launch at the end of April.

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Egypt Bayerische Vereinsbank signed the $19.5m (increased from $11.5m) two year term loan for Export Development Bank of Egypt on Monday. The loan carries a margin of 37.5bp over Libor. Within its two year maturity there is six months' grace and seven quarterly repayments.

ARGENTINE corporates Movicom and Disco managed to launch successful 144a deals this week, even though yet another wave of Asian woes hit the emerging markets. Supermarket chain Disco brought a two tranche deal led by JP Morgan and UBS at 350bp over Treasuries for the $100m five year tranche and 430bp for the $250m 10 year portion.

* Countrywide, the US mortgage lender, is set to borrow in the Euromarkets for the first time. In the next two weeks it will launch an inaugural $400m five year FRN under its recently signed $2bn Euro-MTN programme. The issue, which will be jointly lead managed by Merrill Lynch and Lehman Brothers, will follow investor roadshows in London and continental Europe. Spread talk is in the high 20s over Libor.

* A slew of lead management mandates for Eurobond issues by central and eastern European sovereigns is set to be announced at the European Bank for Reconstruction & Development's annual general meeting in Kiev next week. Among the keenly awaited awards are the lead role on a DM300m five to seven year benchmark Euro-DM offering by the Ba1/BBB-/BB+ rated Republic of Lithuania and the bookrunner's mandate for a $300m-$500m equivalent five to 10 year issue in Deutschmarks, US dollars or euros by the Ba3/BB-/BB rated Republic of Kazakhstan. Russia may announce the lead managers and the currency denomination of the Ba3/BB-/BB+ rated Russian Federation's third Eurobond this year, expected to emerge in June. Following issues in Deutschmarks and Italian lire this year, a debut issue in euros or a dollar issue in either Eurobond, global or Yankee form are seen as the most likely possibilities. Meanwhile, finance officials from the B2 rated Republic of Ukraine are mulling a third international bond issue in addition to the Samurai (Nomura) and Eurodollar (Deutsche Morgan Grenfell and JP Morgan) transactions the country has already mandated.