The Kingdom of Spain held a less than impressive bond auction this week but the bad news was tempered by a series of successes for its beleaguered regions.

Issuers and dealers were quick to take advantage of opportunities provided by moves in cross currency basis swaps this week, allowing them to get euro commercial paper deals done despite the super tight levels at which many issuers want to fund.

The entry of the European Stability Mechanism as an investor in short dated money market instruments later this month could lead to a further compression in the already meagre yields on offer from short term debt, Eurocommercial paper dealers have warned.

The launch of a new triple-A rated euro medium term note programme from a Finnish agency this week cheered dealers who have been struggling with the worst quarter for public sector issuance since the first three months of 2009.

A week of further eurozone volatility is pushing sovereigns, supranationals and agencies even more towards private placements for funding.

Anything but euros worked for top-flight sovereign, supranational and agency issuers in the MTN market this week, as instability in both the banking and sovereign sectors rocked equity and CDS markets.

KfW marked the 10th anniversary of its euro benchmark programme this week with a rare increase of its January 2021 benchmark by Eu2bn to Eu6bn. Bankers described it as the most successful tap ever seen in the euro market.

KfW printed a spate of large trades in dollars and sterling this week. Although the borrower is offering low levels at the short end, volatility surrounding the foreign exchange swap allowed investors to buy the borrower’s paper at more attractive levels.

Commonwealth Bank of Australia last week became the first Australian bank to sell an MTN denominated in Swedish krona. However, the likelihood of Australian banks doing more deals in the currency will depend on the basis swap between Swedish krona and US dollars, bankers said.

Portugal insisted this week that it still had access to international capital markets, with the country’s top debt management executive claiming that it was business as usual for its MTN programme.

Dealers were hopeful that government guaranteed issuance could soon take off in the MTN market after HBOS launched the first CDs off such a programme this week. But the prospect of such supply also caused confusion, as although investors have been interested in such paper, dealers are unsure how to price the new asset class.

The world Bank is again targeting socially responsible investors with its latest retail offering, a Eu250m one year 3.85% fixed rate bond, marketed by Dekabank to customers at 16,000 Sparkassen-Finanzgruppe branches across Germany.