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International Endesa has increased the debt ceiling off its debt instrument programme from euro7 billion ($6.42 billion) to euro9 billion. It has also added five banks to the appointed dealer panel. They are BBVA, BSCH, Caja Madrid, Banco Espanol de Credito and Invercaixa Valores.

Euro trading continued to be strong as last week drew to a close. Gallaher Group's euro750 million ($684.84 million) trade overshadowed all others in terms of volume. The trade comes just over a week after the issuer raised the ceiling off its MTN programme to £

Euro had its busiest day's trading for some time as 18 notes were closed. There were some lengthy maturities and plenty of high volumes. Triple-A rated Bayerische Landesbank dominated trading with four notes, each for euro250 million ($230.72 million). All four notes are plain vanillas, pay interest quarterly and mature in April 2003. JP Morgan lead-managed the trades. Fellow German issuer, Norddeutsche Landesbank closed a euro10 million note that matures on March 15 2002. The note pays interest singularly and carries a high final coupon of 23.000%. A few issuers closed dual euro trades. Deutsche Bank concluded a euro2.85 million MTN that carries a final coupon of 3.140% and matures on February 7 2002 and a one-year euro15 million note that has a final coupon of 6.200%. Svenska Handelsbanken closed two trades, both for euro250 million. The notes have a tenor of 10 years and were managed by Goldman Sachs. One of the notes is an FRN that carries a coupon of 5.135%. The other note is a FX/FRN hybrid that pays 5.125% annually until December 28 2006. Thereafter the note is calculated as 3m Euribor+2.27%. And Societe Generale Acceptance closed two six-year euro5 million and euro10 million notes. Both notes carry a zero interest payment frequency. Compagnie de Financement Foncier closed both the largest and longest-dated trade - a euro750 million MTN that goes out to October 4 2021. The note has a final coupon of 5.750%. Bipop-Carire is set to issue a 10-year euro400 million note that pays interest quarterly. Vorarlberger Landes- und Hypothekenbank closed a euro22 million note via Goldman Sachs. The note pays interest semi-annually and is a range accrual with a strike of 6.000%. General Motors Acceptance Corp concluded a euro75 million MTN that pays interest singularly and carries a final coupon of 3.721%. And Centauri Corp is to issue a euro20 million note that has a final coupon of 8.250%.

Euro volume was high yesterday, but this was largely down to a euro5 billion ($4.61 billion) note closed by Federal Home Loan Mortgage Corp (Freddie Mac). The note pays interest annually and carries a final coupon of 5.000%. The note matures on January 15 2012. The only other issuer looking for volume was DePfa Deutsche Pfandbriefbank, which closed a euro500 million note that pays interest singularly. The note matures on November 28 2006. Bank of Scotland Treasury closed the shortest-dated trade - a one-year euro95 million FRN that pays interest on a monthly basis. Goldman Sachs was the bookrunner. Britannia Building Society is set to issue a three-year euro10 million MTN via Barclays Capital. The range note has a coupon of Libor+78bp. Fabs Luxembourg I closed two trades for euro50 million and euro15 million. The euro50 million note pays interest singularly and matures on February 15 2003. The five-year euro15 million trade pays interest quarterly. Hamburgische LB Finance (Guernsey) also closed for euro15 million via Caixa Geral de Depositos. The note has a zero coupon. And Lehman Brothers Treasury concluded a 10-year euro15 million MTN. The note pays interest annually and carries a final coupon of 7.600%. Credit Agricole Indosuez was the busiest issuer closing notes for euro16 million, euro16.50 million and euro64.50 million. All the notes have a tenor of five years and pay interest singularly.

Thirteen euro trades were closed on Thursday. Volume was low and maturities short compared to the rest of the week. There were some large trades. Republic of Iceland closed a euro900 million ($822.13 million) MTN. The trade is only the second issued off the issuer's $1 billion Euro-MTN programme. The note pays interest quarterly and matures on April 5 2005. Fiat Finance & Trade concluded the shortest-dated trade - a euro200 million note that matures on October 4 2001. The note pays interest singularly and carries a final coupon of 3.915%. France produced the busiest issuers. Societe Generale (SG) and Societe Generale Acceptance (SGA) both closed trades off its euro30 million Euro-MTN programme. SG closed a one-year euro100 million note and SGA is set to issue a five-year euro20 million note. Both trades have a zero interest payment frequency. And Credit Lyonnais Finance (Guernsey) closed a euro5 million MTN that has a tenor of four years. The note pays interest annually and carries a final coupon of 8.000%. Deutsche Bank SPV, Earls, is to issue a one-year euro22 million note that pays interest singularly. Unibanco - Uniao de Bancos Brasileiros closed the smallest trade - a euro320,000 note that matures on January 3 2002. BCL International Finance also went for low volume, closing a euro4 million MTN that matures on October 9 2003. The note pays interest singularly and carries a final coupon of 5.500%.

Fannie Mae looks set to benefit from a broad agency rally when it comes to market today (Friday) with a $2bn re-opening of its May 15, 2011 Benchmark Note and a new $5bn September 15, 2004 issue. After a rally at the short end of the agency market, demand started to move out along the curve this week, with good buying into the eight to 10 and 10-12 year sectors. That should favour the re-opening of Fannie Mae's 10 year Benchmark bullet, due to be priced today. EuroWeek understands that the deal is heavily oversubscribed.

The European telecoms sector was once again under pressure this week as France Télécom was cut from A3/A-/A- to Baa1/BBB+/BBB+, triggering coupon step-ups of 50bp on its covenanted deals. These include the Eu3.5bn 5.75% March 2004 and Eu3.5bn 6.75% March 2008 euro issues as well as all of the telco's dollar paper. The downgrades had been widely expected by analysts and investors after the French telco revised its debt reduction targets earlier this month. However, there was surprise that Fitch and Standard & Poor's maintained negative outlooks on the credit, prompting fears that the high triple-B ratings floor that had been seen for several European telecoms credits might not be as solid as previously thought.

Freddie Mac executed its latest EuReference Note sale this week, a Eu5bn 10 year transaction. Freddie's safe haven drew many new investors to the deal, said a senior spokesperson for the agency. The 5.125% January 2012 notes were priced yesterday (Thursday) to yield 46bp over the 5% Bund due in July 2011, or 11.6bp over the old Freddie Mac 5.75% EuReference Note due in September 2010. The leads were Dresdner Kleinwort Wasserstein, Goldman Sachs and Schroder Salomon Smith Barney.

The European telecoms sector was once again under pressure this week as France Télécom was cut from A3/A-/A- to Baa1/BBB+/BBB+, triggering coupon step-ups of 50bp on its covenanted deals. These include the Eu3.5bn 5.75% March 2004 and Eu3.5bn 6.75% March 2008 euro issues as well as all of the telco's dollar paper. The downgrades had been widely expected by analysts and investors after the French telco revised its debt reduction targets earlier this month. However, there was surprise that Fitch and Standard & Poor's maintained negative outlooks on the credit, prompting fears that the high triple-B ratings floor that had been seen for several European telecoms credits might not be as solid as previously thought.

Freddie Mac completed the last of its run of large benchmark deals launched after the events of September 11 yesterday (Thursday) with the successful pricing of a new Eu5bn 10 year EuReference Note. The January 2012 issue had been marketed at an indicated spread of 45bp over Bunds, or 13bp wide of the agency's September 2010 EuReference Note, which, due to the steepness of the curve, made it flat to the old deal. But the agency took advantage of oversubscription to price the deal at 46bp over Bunds, which at the time of pricing yesterday worked out at 11.6bp over the older deal, and brought the new on-the-run deal inside the old on a Libor basis.