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What information about a counterparty's default probability is determined by their stock price?

PROSPECTIVE bond issues by Pakistan and Sri Lanka have been thrown into doubt by the reverberations of India's decision to test-detonate five nuclear devices. International sanctions announced against India may also put on hold transactions from the country. The primary casualty looks set to be a new benchmark offering by the Islamic Republic of Pakistan, to led by ANZ. Due diligence had already begun on the $300m five year fixed rate offering which was scheduled to be launched next month.

Here are the details of the new Moody's rating of Korean banks. * Shinhan Bank -- long term senior debt rating of Ba1 reaffirmed, but subordinated debt rating also cut two notches from Ba1 to Ba3. Bfi rating dropped one notch from D+ to D.

HONG KONG's surrogate sovereign borrower, the Mass Transit Railway Corporation (MTRC) is likely to appoint bookrunners for its first Yankee offering in nearly three years by the middle of next week. Despite an unstable spread environment for borrowers across the region, the wholly government owned A+/A3 rated company is considered one of the few credits from the region capable of attracting enthusiastic investor demand.

* As part of plans to develop a fixed income presence in Asia, Bank Boston has appointed Jie Hu as a vice president to its research team based in Singapore. Formerly covering securitised bonds at Bankers Trust in Hong Kong, Hu will report to head of research William Overholt who previously headed Bankers Trust's fixed income research team. Having built up a team of four analysts, Bank Boston is said likely to increase the number to up to a dozen by the end of the year.

POHANG Iron and Steel (Posco) defied desperate market conditions and the expectations of many bankers this week when it sold 7.69m ADRs at $13 each. The deal won plaudits for joint lead managers and bookrunners ING Barings and Salomon Smith Barney. The issue emerged shortly before an expected change in foreign ownership limits for Korean companies which may depress values as the stock becomes less scarce. The pricing represents a 23.1% premium to Wednesday's closing price in Seoul and an 8% discount to the ADR price on the same day. The GDRs are fully fungible.

SOME OF Asia's leading investment bankers were left stranded in Jakarta yesterday as social and political turmoil in Indonesia intensified with mass rioting throughout the central business district. Having been invited to Jakarta by the government to compete for a financial advisory role overseeing its wide-ranging privatisation programme, talks were abandoned after it became obvious that the country was closer to anarchy than it was to being ready to promote itself to global investors.

THE HONG Kong markets were abuzz with speculation about a number of possible convertible bond mandates this week, including deals for China Resources Enterprise, an exchangeable bond for Guangzhou Investment Company and a jumbo offering from China Telecom. Goldman Sachs is believed to have secured a $1bn convertible mandate for China Telecom, while Salomon Smith Barney was linked to a $300m convertible mandate for China Resources Enterprise.

ROADSHOWS for the first T share * a Chinese company listed in Tokyo * will begin on June 1. Tianjin Automotive Xiali will raise up to $200m in a deal led by Daiwa Securities expected to appeal strongly to Japanese retail investors because of the company's business connections in the country. Pricing for the issue is expected on May 20 with the average H share p/e ratio, about 11 times, and the p/e ratio of comparable carmaker Qingling Motors, which is about 17 times, as benchmarks for the issue. One banker said: "This deal could be expected to have a p/e just in single digits which will make it very attractive to investors."

NEW issue activity in Hong Kong remained buoyant this week despite a lacklustre Hang Seng index. Hopson Development's IPO persevered with its $70m IPO, while Sinolink Worldwide Development and Zhu Kuan began investor presentations. Bankers reported a steady flow of orders for Hopson when the book opened yesterday (Thursday), with sizeable interest from a number of corporates.

China The unpredictable state of the B share market in Shenzhen was evident again this week as two companies cancelled planned offerings because of poor market sentiment. However, a new candidate lined up to take their place.

Asset backed securities: * MBS-3