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Swap rates increased sharply this week as government bond markets sold off in the early part of the week due to the widely held belief that the war in Iraq will be a short one. This supposition wobbled a little yesterday (Thursday) as the conflict started, and rates decreased a little. Throughout the entire week, whether the market sold off or rallied, swap spreads edged wider. By the close yesterday, both five year and 10 year swap spreads were around 46.5bp mid-market. As medium term spreads have been bid wider, long end spreads have changed very little. Consequently, with 30 year spreads around 31.25bp, the 10s/30s switch has widened to around 15.25bp.

Reed Elsevier has verbally mandated eight banks, three of which will be bookrunners, for its $3bn refinancing. Banks thought to be in the group are Barclays, BNP Paribas, Citigroup/SSSB, Deutsche Bank, JP Morgan and Royal Bank of Scotland.

Swap rates increased sharply this week as government bond markets sold off in the early part of the week due to the widely held belief that the war in Iraq will be a short one. This supposition wobbled a little yesterday (Thursday) as the conflict started, and rates decreased a little. Throughout the entire week, whether the market sold off or rallied, swap spreads edged wider. By the close yesterday, both five year and 10 year swap spreads were around 46.5bp mid-market. As medium term spreads have been bid wider, long end spreads have changed very little. Consequently, with 30 year spreads around 31.25bp, the 10s/30s switch has widened to around 15.25bp.

Rating: Aa2/AA/AA Amount: Eu2.5bn

Amount:$287.5m,Eu248.25 and £100m Issue price: 100.00

Amount: ¥1tr Expected maturity: December 2005

Mandated arrangers Deutsche Bank and Standard Bank have won the mandate to arrange the $50m one year trade related loan for MDM Bank. The loan is fully guaranteed by MDM Financial Group's parent company, MDM Holding. The mandated arrangers will approach selected relationship banks next week, to join the deal before general syndication. The loan carries a margin of 295bp over Libor.

Guarantor: The Shell Petroleum Co Ltd and Shell Petroleum NV Rating: Aaa/AAA

Bids from WM Morrison, Sainsbury, Wal-Mart/Asda and Tesco for supermarket chain Safeway were referred to the UK competition commission this week. Phillip Green, who bankers say may have financial backing from HBOS and Merrill Lynch, has escaped referral. Bankers were surprised that WM Morrison, which is Safeway's weakest competitor, has been referred. Morrison has secured £2bn in cash from ABN Amro. WestLB and HBOS have provided Tesco with £2.9bn. UBS and Goldman Sachs are supporting Sainsbury.

ABN Amro Bank, Citibank/SSB, Development Bank of Singapore and OCBC have completed the $250m 3-1/2 year term loan for Tech Semiconductor. Co-arranger is Norinchukin Bank (Singapore) lending $15m and, as senior lead managers, Industrial and Commercial Bank of China (Singapore) and RZB (Singapore) committing $10m apiece.

Reports released yesterday (Thursday) suggested that private equity sponsor BC Partners is preparing an offer for Six Continents. BC Partners has joined a queue of private equity sponsors and trade buyers looking at the hotels and pubs businesses being demerged from Six Continents.

Investors will follow closely the expected launch of Russian holding company Sistema's debut Eurobond next week as they look for an indication of how US-led attacks on Iraq have affected appetite for new issuance. With no new deals from emerging Europe, the Middle East and Africa credits this week, attention has been focused on the roadshow for Sistema's 144A transaction, via lead managers Deutsche Bank and ING, which has been taking place simultaneously in Europe, the US and Asia. It finishes today (Friday) with pricing predicted for next week, market conditions allowing.