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THE CITY of Turin is preparing to issue a second tranche of Buoni Ordinari Comunali (municipal bonds) fungible with the 20 year floater it launched in September 1996. The addition of a second Lit37.4bn tranche, scheduled for launch in mid-December, will lift the size of the transaction to Lit99bn. The proceeds of the second tranche will be used for public works in the city.

Market commentary Compiled by Brendan Goffinet, Hambros Bank Ltd, London. Tel: +44 171-865 1087

WESTDEUTSCHE Landesbank has set up Euro and US commercial paper conduits to provide an in-house rated funding source for its Compass asset backed programme. Compass has been active since 1995, privately refinancing assets through the Euroloan market. It has generated $900m of transactions with trade and financial receivables bought from bank and corporate clients in Germany, the UK and Spain.

HAMBROS BANK introduced the Guinness Trust to the capital markets this week with a £60m bond secured on a portfolio of social housing. The 40 year deal, rated Aa2 by Moody's and AA- by Standard & Poor's, was re-offered at 100.4436 to yield 95bp over the 8% 2021 Gilt on a 7.5% coupon.

* First USA will launch its long awaited French franc securitisation of US credit card receivables today (Friday), with Bear Stearns as lead manager. International Credit Card Funding No. 1 Ltd will offer Ffr2bn of seven year hard bullet bonds paying 26bp to 27bp over the 6.75% October 2004 OAT. If the bonds are not redeemed as expected in October 2004 the coupon changes to floating rate until final maturity in June 2007.

PUMA MANAGEMENT Ltd returned to the Euromarkets this week with a blow-out $900m securitisation of Australian mortgages. Lead manager JP Morgan increased the deal from $700m and still had spare orders. Kieran Brush, Puma's treasurer, said: "The bond was a resounding success by any standards, but in the adverse market we have now it is a triumph. We wanted a well priced, large issue and that is what JP Morgan delivered."

INTERNATIONAL Bank of Asia, the Hong Kong bank which is 55% owned by Arab Banking Corp, is considering securitisation as one of a number of options for reducing mortgage exposure on its balance sheet. Hong Kong mortgages make up about 40% of the bank's assets -- the level which the Hong Kong Monetary Authority has set as a maximum for banks in the special administrative region.

CHECK Point Charlie, the US asset backed commercial paper conduit which funds bond arbitrage vehicles for Bankgesellschaft Berlin, will issue again early in 1998. "We want to build up to a reasonable size as quickly as is practical," said Arjun Matthai, a director at BGB. "I'll be happy when we cross the $2bn mark."

NATIONSBANK has set up a fully supported US asset backed CP conduit called Coral Sea Funding Corp to securitise Australian assets. The programme debuted last week, selling CP worth between $100m and $200m. The proceeds from CP are lent to the conduit's parent, Coral Sea Pty, registered in Australia. It will extend secured loans to Australian corporations and buy trade receivables, bringing the benefits of cheap USCP funding to Australian businesses.

THE JUMBO $850m equity financing from Asia Pulp and Paper (APP) of Indonesia remains on course for successful completion with lead managers Merrill Lynch and Morgan Stanley Dean Witter preparing to price the deal on Tuesday. Despite the inhospitable market which has rendered virtually every other transaction from Asia untenable, bankers and analysts expect the twin ADR and exchangeable offering to fare well.

RED CHIP China Merchants Holdings International broke the new issuance hiatus from the China/Hong Kong sector with a surprise $535m placement to fund its capex plans this week. Led by Peregrine, which said that the offering sold out within an hour, the group issued 229.5m shares to its parent and 123.5m to institutional investors at an issue price of HK$11.90, representing an 11.5% discount to Wednesday's close.

THE LIKELIHOOD of the IMF being called in to assist the Republic of Korea loomed larger by the day this week as investors turned their attention away from problems in Thailand and Indonesia towards the more dangerous prospect of a meltdown in Korea's fiscal position. Country specialists said that speculation concerning a bail-out of up to $100bn have been met with consternation in Seoul, where government officials have even started to threaten jailing rumour-mongers for destroying what little confidence is left in Korea's ability to service its enormous short term debt.