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INDIA'S already ambitious privatisation programme was further expanded this week with a $600m issue for the Indian Oil Corporation (IOC) brought to the front of the queue and invitations sent out for a government sell-down in the Ministry of Railway's subsidiary Concor. Market expectations that either a $800m stock offering in domestic telecom operator Mahanagar Telephone Nigam (MTNL) or a $600m offering by the Gas Authority of India (Gail) would lead the next wave of sell-downs were negated by the news that the government had decided on an oil price hike to cover the republic's $5bn oil pool deficit.

THE KOREA Development Bank (KDB) has spent the week walking a tightrope, with investors wary of adding to already huge losses on Korean bond issues as KDB prepares to launch an expected $1bn global bond. Bankers commented that the A1/AA- rated bank has been trapped by its unenviable task of re-establishing a new benchmark for Korean spreads ahead of expected sovereign ratings announcements by both Moody's and Standard & Poor's.

THE wave of innovative equity related transactions from Taiwan is gathering pace with groundbreaking deals due over the next month from First International Computers (FIC) and Advanced Semi-conductor Engineering (ASE). Bankers said that ASE is likely to come first with a $200m FRN structured via a Labuan-based SPV. Mandated to SBC Warburg Dillon Read, the fully asset swapped deal follows similar issues from Malaysia but marks a first for Taiwan.

THE MARKET for Philippines debt looks set to be tested by a new bond issue from one of the country's leading blue chips. San Miguel Corporation, one of the Philippines' most highly regarded and internationally diversified companies, is believed to have switched plans for a syndicated loan to the launch of a new FRN instead.

THE Islamic Republic of Pakistan set an important landmark this week with the successful pricing of a first investment grade bond issue from the country. Led by ABN AMRO and Citicorp, a $225m securitised transaction by majority state owned Pakistan Telecommunications (Paktel) scored a number of firsts, not least in being the first securitisation from the country and the first telecoms transaction backed by multiple carriers.

* Standard & Poor's has downgraded the foreign currency rating ceiling of the Kingdom of Thailand to A- from A. S&P first placed the country on CreditWatch at the beginning of August, but the expected revision has long been factored into ever widening spreads, with the kingdom's 7.75% 2007 Yankee trading at double its 90bp launch spread in April. S&P had previously criticised Thailand's weak coalition government for being slow to recognise and manage escalating problems. In a statement the agency said that: "Thailand's weakened growth prospects, the still sizeable recapitalisation needs of the financial system and the expected run-up in public external debt have weakened the government's financial profile to a degree no longer consistent with the kingdom's previous levels."

DETAILS of the new benchmark transaction from the People's Republic of China have become increasingly fuzzy. A growing body of opinion is questioning why the government should want to press ahead with the deal in the face of the current market environment. "They don't need the money, so why are they going ahead with what is primarily a public relations exercise when they stand to get far better spreads later in the year?" one banker argued.

THE Korean government is under mounting pressure to push back the timetable and reduce the size of Korea Telecom's (KT) $1.2bn privatisation, thereby allowing more room for the long pipeline of third and fourth quarter issuers which has been rapidly building up over the past few weeks. Specialists estimate that with $2.28bn of fourth quarter approvals, in addition to $1.2bn from KT and some $400m left over from the third quarter, bankers will have a struggle placing upwards of $4.5bn of paper with nervous investors.

THE FRENCH government is moving at speed to complete a partial flotation of France Télécom, with plans to launch the sale into an already crowded autumn calendar of telecom privatisations.

* Electric Power Development Co Ltd Guarantor: Japan

THE summer lull is set to come to an abrupt end next week with a number of prestigious borrowers planning to launch Eurodollar issues. GMAC has confirmed its intention to launch a two tranche five year FRN in the sterling and Deutschmark sectors, as reported in Euroweek 517. Merrill Lynch is overall co-ordinator with BZW as joint lead on the sterling tranche and Dresdner Kleinwort Benson joint lead on the Deutschmark tranche.

MARKET SOURCES in London point to ING Barings as the winner of the beauty parade to lead manage the offering of stock in Jordan's Arab Potash, one of a number of offerings planned from the region. The firm has been competing with Nomura and HSBC to lead the deal, which should reach the markets in the next two months.