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Vorarlberger Landes- und Hypothekenbank (Vorarlberger) has done a euro600 million ($571.2 million) benchmark trade off the revived Pfandbriefstelle set-up which offers investors a wide choice of guarantors. The deal was led by Credit Suisse First Boston and has a coupon of 3m Euribor flat. The issue price was 99.88% and it has tenor of five years. Markus Seeger, part of the treasury team at Vorarlberger, says: "We saw good demand at the end of 2000 for this product and so decided January would be a good time to do the benchmark issue. Structures will have to wait though, as we have to take this format to investors step-by-step." The issuer also did a five-year Z100 million ($24.30 million) trade via Deutsche Bank. It has a coupon of 12%.

Warburg Pincus is to take a 42% stake in investment management firm New Flag Asset Management, investing Eu6.7m in the company. New Flag, which was founded by Pierre Oliver-Masmejean and Anton Simon in 1998, is one of only a couple of asset managers dedicated solely to the European high yield markets. Anton Simon told EuroWeek that Warburg Pincus's involvement will make an important contribution to New Flag's standing in the market. "We have the skills and 36 years of experience between us in investing in high yield," he said, "but for institutions that do not know us, Warburg Pincus is an institutional backer of huge repute and will therefore give us a lot of credibility."

After a quiet start to 2001, the bond markets exploded this week as triple-A rated borrowers and emerging market sovereigns sprang into action. DaimlerChrysler stole the limelight by attracting over $25bn of orders for a $7.1bn multitranche issue in dollars, euro and sterling, proving that investors are still prepared to buy beleaguered corporates if the price is sufficiently cheap.

Belgium The long awaited Eu300m credit facility for Brussels International Airport Company (Biac) has been fully underwritten and launched by arrangers KBC Bank (joint bookrunner, facility agent and documentation agent), Lloyds TSB (joint bookrunner), Sumitomo Bank (joint bookrunner) and Caja Madrid.

The covered bond sector moved up a gear this week as over Eu9bn of bonds hit the euro market. Hypothekenbank in Essen AG launched the joint biggest jumbo Pfandbrief ever, a benchmark Eu5bn January 2011 deal. Joint leads Barclays Capital, Commerzbank and Schroder Salomon Smith Barney reported strong orders for the deal despite the size.

Inter-American Development Bank (IADB) has signed and self-arranged a global debt programme that replaces its Euro- and US MTN shelves. The new facility has no size limit or dealer panel. Hakan Lonaeus, chief of funding at IADB, says: "This facility streamlines our two existing shelves and essentially simplifies the documentation." The inaugural trade, a $2 billion five-year deal, was done last week via ABN Amro and Merrill Lynch. It is expected that the facility will be used to find most of the issuer's $6 billion to $8 billion funding requirements during the year. Lonaeus says: "The Aussie dollar and Taiwan markets will be accessed with our domestic programmes in those countries, but otherwise we will access any currency with this programme depending on the arbitrage opportunity."

Three deals from Irish issuers are part of the healthy pipeline building in the subordinated bank capital market at the start of 2001, according to originators. However, investors may have to wait until February and March before the primary markets pick up a head of steam, despite the activity already underway in other sectors of the market.

Islandsbanki-FBA came to the market for the first time this year with a one-year $15 million FRN. The trade is unstructured and pays interest quarterly. It was unsyndicated and Lehman Brothers was the dealer. Ingvar Ragnarsson, senior funding manager at Islandsbanki-FBA, says the expected amount of funds to be raised off the programme this year is euro700 million ($664.33 million).

Dutch steel producer Ispat is set to issue the first European high yield deal of 2001 and take advantage of the recovering market, with a Eu175m 10 year bond via Credit Suisse First Boston. "Roadshows are underway this week and we will be looking to price by the end of next week," said a syndicate official at CSFB.

Kommunkredit Austria has issued a euro50 million ($47.45 million) FRN via DG Deutsche Genossenschaftsbank as lead dealer. The note, Kommunalkredit Austria's first this year, pays interest semi-annually and the final coupon is Euriobor +0.5%. The note, which matures in January 2008, is the 24th off Kommunalkredit Austria's euro2 billion debt issuance programme. Last year it issued a Swiss franc note and dollar trade, but the issuance was predominantly in euro.

Kommunalkredit Austria has increased the debt ceiling of its debt issuance programme from euro2 billion ($1.88 billion) to euro3 billion. The programme was nearing its ceiling and has $1.97 billion outstanding off 24 trades.