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Within central and eastern Europe, it has been the corporates who have found the going hardest this year.

The Loan Market Association held its second Annual General Meeting on July 9, 1998. At this meeting, I was pleased to be able to announce that our membership had grown to 110, and that, as a result, we had collected sufficient funding to enable us to undertake all of our planned expenditures for the current calendar year.

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".