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A CRITICAL new benchmark in China's burgeoning project bond sector was set in New York last night (Thursday) with the pricing of a debut $350m transaction for Cathay International via JP Morgan. In the absence of any plain vanilla debt issuance from the People's Republic, bankers said that the growing pipeline of asset backed and project finance deals will provide a key test of the outer limits of investor appetite for more esoteric paper.

DEBT heavy Korean company Hyundai Electronics has sold a $50m convertible bond through UBS * revealing the company's desperation for funds, said analysts. The six year bonds were privately placed with a limited number of accounts. The bonds came with a 0.5% semi-annual coupon and have a put option at year five to yield 10.52%. Yield to maturity is thought to be 500bp over Treasuries, although arranger Union Bank of Switzerland declined to release figures, citing the private nature of the deal. The issue has a hard non-call for the first three years and is thereafter subject to a 190% hurdle - an unusually high level for a Korean convertible.

ING BARINGS has resumed work on its auto loan securitisation mandate for Thai finance company Kiatnakin Finance and Securities. Kiatnakin was suspended by the Bank of Thailand in August 1997 along with 57 other finance firms. The bank has since allowed only two companies to escape liquidation - Kiatnakin was one of them.

KOREA is set to launch its benchmark global bond next week, and although observers cited some evidence of gathering momentum, the fate of the deal still seems poised in the balance. As the roadshow entered its final leg in the US, pricing was narrowing down to the 350bp to 375bp range over Treasuries. While the bond still looks most likely to emerge at around $3bn, any growing investor appetite on the back of responsive pricing from Korea might still drive the final size higher.

ABN AMRO has been appointed by the Australian government as adviser on the privatisation of the remaining two-thirds of telecoms company Telstra. The sale - which depends on the re-election of prime minister John Howard and his government - is expected in either the last quarter of this year or the first quarter of 1999. Along with Credit Suisse First Boston and JB Were, ABN Amro was global co-ordinator for the Telstra IPO in November 1997. Rival bankers were quick to point the potential for a conflict of interest if ABN Amro is made a senior member of the syndicate for the new sale, which could raise as much as A$40bn ($26.6bn). Said one banker: "The government's advisor is concerned with getting the best price for a government asset, while a co-ordinator or lead manager has to consider other factors, such as the effect on outstanding shares."

UP TO six Australian borrowers are lining up to make debut US bond offerings during the second quarter, following an extremely quiet period in which most corporate activity was heavily focused on Australia's extremely competitive domestic bank market. Sydney-based bankers argue that the renewed surge of activity has resulted from a combination of factors, including a desire for longer term funding as interest rates reach the low point of their cycle and a realisation that the burgeoning Australian bond market is not yet mature enough to absorb longer dated tenors.

THAILAND'S Bangkok Bank (BBL) will begin a roadshow with bookrunner Morgan Stanley on Monday in Singapore in a bid to raise up to $1bn though the sale of 400m shares. Bank officials are thought to want a price of Bt100 per share, just below the current foreign share price of Bt104, and substantially above the Bt88 that comparable credit Thai Farmers Bank achieved two weeks ago. Bankers said the success of the Thai Farmers Bank (TFB) issue - with Goldman Sachs as sole bookrunner - boded well for the new issue, and argued that the added flexibility of BBL in involving one or more strategic investors would help the sale.

YANZHOU Coal Mining has successfully debuted on the Hong Kong stock exchange, ending a listing process first delayed when the Hang Seng crashed in October and whose fate has followed every movement of the index. The issue, the first 'H' share of the year, was not the most exciting of issues, said analysts - but low pricing made it appealing. But in a vivid demonstration of the still febrile state of the 'H' share market, Merrill Lynch announced the postponement of a planned issue for Wuhan Iron & Steel, citing worries about weak demand.

SBC WARBURG Dillon Read this week successfully completed its sale of 500,000 shares in bio-tech concern Neurosearch, one of a number of Danish stocks that will be offered this year to international investors. The shares were priced at Dkr550, a discount to the mid-point of the bid/offer spread of Dkr557 to Dkr562, but the shares rallied to Dkr585 level in the days after the trade was executed.

* The Republic of Uruguay received a rude awakening this week when it was penalised by investors for bringing a 10 year $250m deal to market at an aggressive price. Uruguay, which has always been able to boast the most aggressive pricing among Latins because of its investment grade rating and rarity value, saw its 7% bonds widen out to 150bp on Thursday afternoon from a launch spread of 140bp, even though it came at the wider end of its 135bp to 140bp talk.

* SBC Warburg Dillon Read will soon launch the $100m IPO of the Italian manufacturer of emergency lighting fixtures Beghelli, after which the company will seek a listing for its shares. The international lead manager will be joined by BCI which will lead the sale of stock in the local market through an OPV. The transaction should be launched next month for completion in June.

Chase Securities Inc has arranged a $1.6bn facility for USA Networks Inc. The loan is split into a five year $750m term loan, a six year $250m term loan and a $600m five year revolver. Pricing is based on the company's total debt ratio. The Prime margin range for the five year loans is Prime flat to 50bp, the Libor margin range is 75bp to 150bp and the commitment fee range is 18.75bp to 37.5bp. The Prime margin range for the six year term loan is 50bp to 75bp and the Libor margin range is 150bp to 175bp.