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Did the leads use the Finns to go fishing?

Issuer: Republic of Finland

Amount: €525 million

Launched: 15 December

Lead manager: HSBC Markets,Merrill Lynch, Paribas

Christmas activity in the Eurobond markets is a rarity in itself. To have a minor war break out between the lead managers and the syndicate is especially unseasonal. The ill-will generated by the Finland deal shows how keen banks are, at the start of the euro bond market, to preserve any proprietary distribution strength in their home markets from foreign competition.

To add a twist of irony, the conflict was the direct result of the lead managers and the issuer trying to manufacture a water-tight deal to avoid orders doubling up and creating a false impression of demand in a tricky market on the eve of the euro launch

Together the leads and the issuer - led by director of funding Satu Huber - decided to run a two-tier issue: HSBC, Merrill Lynch and Paribas would jointly underwrite €375 million, and be paid 25 basis points in fees. The remaining €150 million was to be sold through a pot system. "We announced our intention to launch on the Friday evening [the 11th]," says Satu Huber Finland's director of finance.

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