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Nearly five years ago, Italian pension schemes were reorganized (Legislative Decree No. 124/93) and subsequently modified by the general reform on pension law (Law No. 335/95). The reforms were intended to reduce state social security costs, saving resources for a pension system that would be competitive in Europe. Unfortunately they have been partially delayed in the system.

Bell Atlantic has launched a US$2.4 billion convertible bond. The five-year deal is the largest international equity-linked offering to date. Bell could not sell shares direct because of US regulations which prohibited an equity offering within two years of its merger with Nynex, the New York telephone company, last year. The bonds, which were distributed largely to non-US investors, will be exchangeable into Bell's 25% stake in New Zealand Telecom after 18 months. Davis Polk & Wardwell advised the lead managers, SBC Warburg. Davis Polk's team was led by capital markets partners Winthrop Conrad in New York and Sandy Whitman in London.

The eastern European offices of Philadelphia-based Pepper, Hamilton & Scheetz are to join New York's Coudert Brothers. Coudert thereby increases its east European practice with the addition of an office in Almaty, Kazakstan and bolsters its position in Moscow and St Petersburg, enlarging its offices in both cities to incorporate Pepper Hamilton's personnel. It remains unclear whether Pepper Hamilton will retain its sole remaining office outside the US in London. The London office had been headed by partner Sally March, who shared her time between London and St Petersburg.

The Fed has proposed changes to Regulation K which liberalize the rules governing expansion in the US for international banks. By Connie Friesen and David Nissenbaum of Richards & O’Neil LLP, New York

Several deals have been signed this month following Boris Yeltsin's visit to Italy. Foremost among them is the Eni-Gazprom strategic alliance. Eni, Italy's partly privatized oil and gas group, signed a deal which should lead to direct investment of at least US$1 billion in Gazprom, the Russian gas monopoly. The alliance will also create a separate joint venture company focusing on the exploration and development of oil and gas fields in Astrakhan, southern Russia. Further talks may lead to a joint exploration, production and marketing effort in other countries. Last November Royal Dutch/Shell signed a similar agreement and invested US$1 billion in a Gazprom convertible bond. Eni confirmed that it is seeking to agree the basis on which it may also acquire an equity stake.

US firm Steel Hector & Davis, based in Florida, is to form an association with Brazilian firm Moreira Lima & Royster. The move highlights foreign firms' growing interest in establishing a presence in Brazil. Moreira Lima has offices in São Paulo and Rio de Janeiro. Moreira Lima was created in late 1997 after two lawyers, Eduardo Moreira Lima and Michael Royster, left Brazilian firm Garcia & Keener Advogados. Joseph Pallot, partner at Steel Hector, says it provides his firm with an opportunity. "We had been looking at entering the Brazilian market since late 1996," he says. "Brazil is Florida's number one trading partner."

Federal Mogul, the global automobile parts manufacturer, announced on January 12 its plans to purchase Fel-Pro, a privately owned manufacturer, for US$720 million. The transaction includes US$225 million in common stock and US$495 million in cash. The deal will make the combined company a single source for engine-dealing systems, considered vital for auto-parts makers as the industry consolidates. Advising Federal-Mogul on all corporate aspects of the deal is Cleary, Gottlieb, Steen & Hamilton, New York. Lead partner is M&A specialist William Groll. Also involved is the Chicago office of Baker & McKenzie, advising on tax issues. Representing Fel-Pro is Katten Muchin & Zavis, Chicago. Lead partner is corporate specialist David Shavitz.

Royal Bank of Canada and Bank of Montreal have agreed to merge. In response to consolidation in the international banking sector the two banks will join to create North America's tenth largest bank by market capitalization (US$26.6 billion). Royal Bank's shareholders will own 54.9% of the new bank and Bank of Montreal's shareholders will own 45.1%. The transaction is being lawyered by three Canadian firms, two US and one UK. On the Canadian side McMillan Binch and Ogilvy Renault advise Royal Bank. Osler, Hoskin & Harcourt advise Bank of Montreal. US firms Sullivan & Cromwell and Simpson Thacher & Bartlett represent Royal Bank on US regulatory law. UK firm's Allen & Overy advise both sides on EU regulatory matters.

The government has accepted most of the proposals for reform of the financial sector put up by the government-appointed private sector committee on financial sector competitiveness made public its report offering detailed proposals to promote Singapore as Asia's premier financial centre.

In the aftermath of the Asian financial crisis, the government can claim two major achievements in reforms to reduce public deficit: