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The ceasefire between the rating agencies and the high grade telecoms sector was broken this week, with Standard and Poor's (S&P) downgrading Dutch telco Royal KPN's A- rating to BBB+ on Monday, and slashing the ratings of Norway's Telenor to A from AA the day after. Moody's was also in action, announcing that it has put Portugal Telecom's A2 ratings on review for a possible downgrade. Credit analysts said Moody's is set to follow S&P's lead and downgrade Royal KPN in the near future.

British Telecommunications (BT) is looking to sell its 17.8% stake in Airtel, Spain's second largest mobile company, in a move that could raise as much as £2.5bn (Eu4bn). Having lost out to Vodafone in an attempt to gain control of Airtel, BT is looking for an exit. The funds raised will be used to finance BT's £10bn debt reduction pledge.

British Telecommunications' Eu9.7bn equivalent transaction dominated the international market this week as investors prepared to absorb the next batch of telecoms supply. The six tranche jumbo offering in euros and sterling, launched on Thursday by lead managers Barclays Capital, Deutsche and HSBC CCF, was originally marketed as a Eu5bn package, but the deal was increased in response to huge demand. The two, three, five and 10 year euro tranches will be priced today (Friday) at the tight end of initial talk, while the £400m five year paper was set yesterday afternoon at 197bp over Gilts and the £700m 15 year tranche at 267bp.

* Bank Nederlandse Gemeenten NV Rating: Aaa/AAA/AAA

Continental, the German tyre and brake manufacturer, has finally signed its euro1 billion ($934.93 million) Euro-MTN programme, which it originally planned to complete on November 30 2000 (see MTNWeek, issue 206). After then rescheduling the signing for December, it at last put pen to paper on Monday, January 15. As reported, the arranger is Merrill Lynch and the dealer panel includes ABN Amro, Deutsche Bank, HSBC, Morgan Stanley Dean Witter, Norddeutsche Landesbank, UBS Warburg and the arranger. The issuer is rated BBB+ by Standard & Poor's and Baa1 by Moody's. It joins a clutch of exciting triple-B corporate issuers which joined the market in 2000: Casino, Rhodia, Sol Melia and Vivendi.

Eletropaulo Metropolitana and Banco do Brasil followed in the Republic of Brazil's footsteps this week and tapped strong international investor demand for Brazilian paper in the wake of the country's recent upgrade from Standard & Poor's and the US Federal Reserve's decision to ease monetary policy. Eletropaulo, Latin America's biggest electric utility, issued $100m of one year paper off its Euro-CP programme to refinance two bond issues maturing in January and February, while Banco do Brasil offered $100m of 7.5% two year bonds at a re-offer price of 99.3184. Both offerings were led by BB Securities, Banco do Brasil's international investment banking arm.

* General Electric Capital Corp Rating: Aaa/AAA/AAA