Dresdner Kleinwort Wasserstein and Merrill Lynch, which enjoyed significant fee income from the complex restructuring of Eurotunnel's old loans in 2000/2001, are gearing up to do the same thing with the next layer of the company's capital structure.

Eurotunnel wants to raise new long-term finance and use the proceeds to buy back existing debt that is trading at a significant discount to face value. These are stabilisation advances, which are trading not much above 20 cents to the dollar and resettable advances, which are trading in the 40 cents area.