What has the APLMA achieved in the two years since it began?

It has brought the market together in way that had not previously been there. In the past, everyone competed with each other and did not get a chance to sit down and talk about the common problems and issues we all face. We have also created an internet-based website which people can use to get access to information on what is happening in the market and what other banks are doing. We have created a syndication system, which really is at the leading edge of the loan syndication market as it enables banks to syndicate electronically. It hasábeen available in the US and Europe for a couple of years, and is now available in Asia. It is free to members of the APLMA.

And is that now fully up and running?

Yes. The recent PCCW loan was syndicated through the electronic system. And as that loan is the biggest deal in Asia, it is also the biggest deal ever done through an electronic system here.

What else has the APLMA achieved?

Working with the LMA in London, it has nearly finalized standard primary market loan documentation, and has finalised secondary market documentation. For instance, it has created a standardized trading confirmation document. So it has standardized some of the documents we use in the market that did not exist before. We have also opened branches in Singapore, Australia and Tokyo and are seeking to further expand our network throughout the rest of the region. So we have a achieved a lot in a short amount of time.

So in general what is the outlook for the syndicated loan market in Asia?

Well the market is coming back. It was pretty disastrous in 1998, and 1999 was even worse. But this year ? excluding PCCW, which is an exceptional transaction ? we would expect the market to be at least at 1996 volumes, if not higher. And that is quite a sharp recovery in a short period of time.

Where is all this money being put to use?

It is across most markets in the region. But the markets that are still under-performing compared to the rest are China, Thailand and Indonesia. In most places the money is going into capital investments, although there is some renewal and rollover of existing facilities ? there always is. But there is a reasonable amount of new investment coming in. For instance, in Hong Kong there are a whole series of new projects coming up.

What is the average maturity profile of these loans? Is it still fairly short-term?

Most of the loans are in the three to five year range. It is not really going beyond that. In Hong Kong it is going out to five years, and we have just seen a ten-year port deal. But elsewhere it is not going much beyond three years.

Have banks changed their behaviour since the crisis?

Well, the number of banks active in the market has declined significantly. The number of loans initially declined now but now it is coming back. One new feature is that before the last two years there was always a surplus of demand for loans over deposits. This enabled banks to bring in funds from offshore and lend them out here. But as a result of the crisis, you now have a surplus of deposits in the market, compared to the amount of loans - the demand. So one new feature is that the domestic banking system across the region has become flush with cash and is looking for somewhere to lend. In the past there was never enough money to satisfy demand. Now that is reversed.

Also, the nature of the lending institutions in the market is different from those that were driving the market in the past. Bankers are being more serious about the credit analysis they do and are being more balanced in who they lend to. Nevertheless, pricing levels for these loans have come right down to the levels we were seeing in 1997. We are seeing more local bank participation in the market and less foreign bank domination of the syndication market.

Thank you and good luck in London.

Ian Adams, deputy managing director of debt markets at BNP Oakreed in Hong Kong, has been the chairman and founding force behind the Asia Pacific Loan Market Association (APLMA), set up in late 1997. He recently resigned from his post pending a move to London as global head of syndication with another institution.