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GREENWICH NatWest has launched a rare beast -- a bond backed by performing UK mortgages. Issued via special purpose vehicle TMC Tattenham No 1, the £330m bond parcels collateral garnered from 14 called TMC mortgage backed securities. "The main driver was the margin improvements we could achieve," explained Chris Higgins, head of capital markets at Mortgage Trust, the UK subsidiary of Ireland's First National, which bought former centralised lender TMC in 1996. "The existing deals have margins over Libor that are not attractive -- some have stepped up or will soon step up to 50bp over."

The western European syndicated loan sector has had an impressive run over the last six months. Volumes are up on the same period last year and market players are predicting an even busier second half.

According to most bankers, the main reason for this drop in activity is that the number of borrowers tapping the market for refinancings has dramatically fallen. "Scandinavian lenders were extremely active last year and the year before," says David Roberts, assistant general manager and head of syndications at Den Danske Bank in London.

The $10.9bn of debt facilities arranged for Texas Utilities' purchase of the UK's Eastern Group was the largest syndicated loan arranged in the first six months of 1998. Some say it was also the most impressive.

At the beginning of the year, bankers gazed into their crystal balls and predicted which emerging market countries would be the success stories of the year. Many plumped for India and Pakistan and some even went for Indonesia.

The result is all the more impressive given that these successful forays have been achieved without any notable increases in margin. Unlike virtually every other sector of the market, pricing for UK financial institutions has essentially remained at either the same levels or below that of1997.

Along with plain vanilla corporate financings to support M&A activity, leveraged buy-out and management buy-out transactions are keeping the UK loans market afloat. Indeed, the first six months of the year has seen an unprecedented number of LBOs and MBOs launched into the market.

The first six months of 1998 have been a frustrating time for many UK project financiers. Following the government's decision to halt approval of new gas-fired power plants, over $5bn of power projects are now on hold.

UK corporate borrowing accounts for the largest single volume in the Euroloan market. Its borrowers, collectively, are the most experienced and savvy users of syndicated loans and it is here that most innovations take place.

At last it has happened. What every banker in the syndicated loan market has been crying out for the last four years has finally taken place: the loan market has turned in favour of the lender.

Asia's syndicated loan market has spluttered feebly in the first half of the year - unsurprisingly, in the context of the region's overall economic turmoil.

The $2.6bn credit facilities arranged by Goldman Sachs for Bacardi's purchase of Sapphire Bombay Gin and Dewar's Scotch Whisky from Diageo featured perhaps the most successful senior syndication of the first half of the year.