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  • In the dollar swap market this week, spreads continued to suffer unforgiving downward pressure as the new debt bonanza flourished. Taking centre stage was the $11.9bn multi-currency, multi-tranche offering from WorldCom, which was the subject of much speculation. In the euro market, the surprise decision by the European Central Bank (ECB) to lower rates by 25bp led to a sharp steepening of the swap curve.
  • Hungary Banks are bidding for a Eu100m EIB guarantee facility for the Municipality of Budapest. Market sources say that top tier banks ABN Amro, Citibank, Commerzbank, Deutsche Bank, ING Barings, IntesaBci and others are competing for the mandate. The facility will be used to develop infrastructure.
  • The European Commission issued a decision on Tuesday requesting that the German government submits proposals before the end of September 2001 to change the German legal support mechanisms of Anstaltslast and Gewährträgerhaftung. The proposals must show that Germany will comply with the state aid rules of the EC treaty by March 2002, although the German government may look to implement proposals over the next five to 10 years.
  • Brazil * Republic of Brazil
  • Hungary: Price talk on the Eu450m private placement for the Hungarian Development Bank (MFB) has been heard at Euribor plus the high 20s.
  • European Investment Bank Rating: Aaa/AAA
  • * Achmea Hypotheekbank NV Rating: AA-
  • Bayerische Landesbank Girozentrale Rating: Aaa/AAA/AAA
  • Fiat defied its detractors this week by successfully launching a Eu3bn two tranche deal, targeting five and 10 year maturities, when many market observers had suggested that a Eu2bn five and seven year package would be more appropriate for an auto company recently downgraded two notches to Baa2. At Eu3bn, the deal has the added kudos of being the largest offering by a triple-B credit in euros with the exception of Telecom Italia, which is rated Baa1/BBB+ on positive watch.
  • Finnish Power Grid has issued its second note of 2001: a ¥3 billion ($24.44 million) note that matures in May 2008 and pays a final coupon of 0.925%. The first time the borrower issued yen was in July 1999 and it has issued yen another three times since. The majority of its funds come from euro however, with $145.55 million-worth outstanding off four notes.
  • Guy Hands, head of principal finance at Nomura and one of the City's best known investment bankers, plans to leave the Japanese bank to start his own private equity fund. Hands is the most high profile of the senior figures to have quit Nomura in the last couple of weeks. Sid Prasad, co-head of global primary markets, and securitisation chiefs Robert Palache and Henry Cooke have also gone (see EuroWeek 701).
  • India Bankers say Reliance Petroleum will award a mandate for its US dollar fundraising requirement to BA Asia today (Friday).