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US dollar was littered with triple- and double-A borrowers. The short end remained weak and just two borrowers closed two- and three- month notes. Statoil closed a $300 million two-month trade and Deutsche Bank issued a $30.47 million three-month deal. State borrowers propped up the mid-term sector. Province of Buenos Aires closed a $75 million five-year note. And Republic of Austria closed a fixed rate $500 million note that matures in December 2006. It pays a 4.5% coupon annually and the issuer swapped it into euro. ABN Amro is the bookrunner. Other borrowers in this sector were Merrill Lynch with a $4.55 million three-year note and SGA with a $15 million six-year trade. The longest trades went out to 2011 and the issuers were Lehman brothers Treasury with a $4 million trade, CDC IXIS Capital Markets with a $9 million note and KfW International Finance with a $100 million deal.

US dollar saw some big volumes from Bank Nederlandse Gemeenten and World Bank, but on the whole notes were between $5 million and $30 million. SNS Bank Nederland (SNS Bank) closed a $10 million five non-call-two trade via Barclays Capital. The note pays a fixed coupon of 4.25% semi-annually for the first two years. It is callable at par on October 2 2003 and thereafter it pays a fixed coupon of 5.40% semi-annually. SNS Bank swapped back to euro. Caisse Centrale du Credit Immobilier de France - 3CIF has announced an eight-year $10 million equity index-linked trade, due to be settled on October 22. The note was done through Credit Suisse First Boston and is benchmarked to the Nikkei225 index. The issuer will pay a coupon of either 7.6% or 5.6% according to a strike level on the Nikkei225 index on the issue date.

Overall volumes were down, with just 36 notes issued in total following the national holiday in Japan yesterday. And US dollar was the currency of 12 trades, most of which were in the mid term. Credit Agricole Indosuez issued a $10 million trade at the short end, which matures on December 28. SGA was also at the short end with a $10 million three-month note. Morgan Stanley's financial repackaged vehicles, ELAN and Fairway Funding, issued two- and three-year notes, both for $10 million and both settling on October 16. ELAN's trade pays a final coupon of 11.350%, while Fairway Funding's note pays 10%. HSBC Bank USA closed three small trades that all go out to 2005 with a total volume of $3.2 million. Westpac Banking Corp closed a five-year $50 million note via Barclays Capital. The note, which is fixed-rate, is callable at year two and pays a final coupon of 4.250%. Rabobank Nederland closed a $10 million range accrual note via Salomon Smith Barney. The note pays a fixed rate of 7% and payment is linked to the number of days on which 3m $libor falls between 3% and 7%. The note is callable every six months.

Investors kept to smaller volumes fro US dollar and the 13 trades announced made up just under 4% of the total market. Nothing was done at the short end and Dorada Corp issued the shortest-dated trade, a $25 million one-year note. And, as dealers have been quick to point out for the past week or so, there is a lot more inquiry for higher rated paper. Only issuers rated single-A or over were in demand. A3-rated HSBC Bank USA was the lowest rated issuer with two four-year deals for $1.5 million and $340,000. Nationwide Building Society closed a $10 million three-year range accrual note via Lehman Brothers. Interest is paid quarterly and is calculated on each day that 3m $Libor plus a margin falls below 6%, divided by the number of days when this happens. Rabobank Nederland also issued two $10 million range accrual notes, both with a tenor of 10 years. The trades were done through Morgan Stanley. One note was a non-call-six and pays a fixed rate of 8.125% and the other is a non-call-one and pays a fixed rate of 8.25%. The fixed rate for both trades is calculated on the number of days during the coupon period that 3m $Liobor falls between 0% and 7%, divided by the total number of days in the coupon period. Both deals are callable semi-annually after the initial call option. And Landeskreditbank Baden-Wurttemburg closed a $20 million 10-year non-call-one note, callable semi-annually thereafter. Salomon Smith Barney was the bookrunner and the interest is linked to 6m $Libor capped at 7.5%.

Vivendi Universal has monetised its Eu4.2bn stake in BSkyB through a complicated structure with Deutsche Bank, to comply with European Commission requirements relating to its merger with Seagram. Deutsche Bank has issued a Eu4.2bn loan to Vivendi, secured by the French group's 22.7% stake in BSkyB. Deutsche Bank has become the owner of the shares, and owns the voting rights attached to them. It paid market value for the stake.

Investors were sticking to the high credits and only two notes were issued below A2. Twenty-nine notes were closed altogether. Names such as Hitachi Asia, SGA, Banque et Caisse d'Epargne de l'Etat Luxembourg and MMC International Finance were at the short end, while the two- to four-year sector was taken up by Merrill-Lynch arranged SPV, Apollo Spires. Caixa Geral de Depositos issued two long-dated trades. The first was a 25-year non-call-three ¥500 million ($4.27 million) via Sanwa. It is a power reverse dual currency (PRDC) with a fixed coupon for the first three years. If the trade is not called it then becomes FX linked, based on the US dollar interest rate minus the yen interest rate. The second note was a ¥200 million PRDC via Mizuho. The 30-year non-call-one pays a fixed rate of interest for the first year, when it will flip into floating rate based on the dollar/yen exchange rate. Vorarlberger Landes- und Hypothekenbank closed a ¥500 million PRDC due to be settled on October 4. The 25-year non-call-three pays a fixed rate of 5.15% for the first three years, when it becomes a dollar/yen FX-linked floater and pays interest semi-annually. Tokyo-Mitsubishi is the bookrunner.

Yesterday saw the lowest number of yen trades announced for some time. There were 11 deals announced, and all but one of them was from a triple-A borrower. Baa1-rated Daiwa Securities SMBC Europe's ¥500 million ($4.29 million) trade was its 103rd yen trade of the year. It goes out to October 2016 and pays a final coupon of 4%. Also issuing a ¥500 million deal was CDC IXIS Capital Markets. The term is 20 years and the note has a non-call three structure, callable annually thereafter. Kommunekredit did a ¥900 million 20-year trade. Mizuho was the bookrunner and the note has a Bermudan callable power reverse dual currency structure, callable after one year and annually thereafter. Mizuho also led a deal for Pfandbriefstelle der Osterreichischen Landes-Hypothekenbank. The ¥1 billion trade is a non-call three-year note, with a fixed coupon of 5.1% during those first three years and then linked to the US dollar and yen exchange rates. It is callable annually after the first three years. And Nederlandse Waterschapsbank announced a ¥1 billion 25-year note via Nomura. It is callable in March 2004. World Bank did two notes: a ¥1 billion 30-year deal and a ¥2 billion 31-year trade. And International Finance Corp did two ¥1 billion trades, both with tenors of 30 years.

Another very slow day for yen yesterday meant just 10 trades were announced. Only BNP Paribas did more than one. It announced a ¥100 million ($860,000) 31-year note that pays a final coupon of 4%, and a ¥304 million two-month note that pays a final coupon of 16%. And France was the only country issuing more than one yen trade too. As well as BNP Paribas's notes, CDC IXIS Capital Markets announced its 194th yen note of 2001, with a ¥500 million deal that goes out to October 2021. Credit Lyonnais Finance (Guernsey) did a ¥62.13 million trade that matures in October next year, and Unibail did its 10th note of the year. It was a ¥1 billion trade that goes out to October 2003. Morgan Stanley was the bookrunner, and the note is not callable, but has a floating interest rate based on 3m ¥Libor+12.5 basis points. Bayerische Landesbank announced a ¥1 billion deal via Shinkin International. It is an annually-callable power reverse dual currency (PRDC) note. Svensk Exportkredit did a ¥1 billion trade 30-year note. It is not callable until a year-and-a-half of its term is up, and has a PRDC structure too. UBS announced a ¥5 billion deal, the biggest yen trade of the day, that goes out to April next year. Merrill Lynch did a ¥500 million 25-year trade that has a final coupon of 4.5%. And World Bank went for a ¥1 billion 30-year note that pays 9.5%.

Fourteen trades were closed in yen on Thursday. And issuance in the currency was dominated by triple-A entities. Low investor confidence has meant that only 10% of issuers in yen came from the single-A sector. Vorarlberger Landes-und Hypothekenbank did the day's longest trade. The ¥500 million ($4.29 million) note goes out to 2031 and pays interest semi-annually. The note will be issued on October 22 2001. KfW International Finance also saw opportunities at the long-end. It issued a thirty-year ¥1 billion note that offers interest annually and pays a final coupon of 5%. The note will be issued on October 16 2001. Hitachi Metals America also issued a ¥1 billion note. The trade was issued at a price of 100% and pays a final coupon of 0.18%. The note, which was led by Mizuho, will be issued on October 17 2001. Kommuninvest went out a little longer with a ¥1.1 billion 25-year note that pays a final coupon of 5.5%. The trade will be issued on October 4 2001.