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Petrobras will test the depth of demand for structured deals out of Brazil in the weeks ahead with a $500m-$750m asset backed offering, most of which will not carry a triple-A wrap from a monoline insurer. The deal, led by Citigroup and BBVA, is on roadshow in the US and will consist of two tranches, one wrapped by MBIA and one unwrapped.

Bids were due earlier this week for the $200m loan deal for Philippine National Oil Corp that will be guaranteed by the Republic of the Philippines. Bankers say the borrower was looking for a three or five year financing.

Swap spreads continued to tighten across all markets this week against a background punctuated by European and Asian holidays and characterised by low issuance levels. Although there are more holidays next week, corporate issuance is expected to pick up with several houses talking of imminent mandates. Deutsche Börse, rated Aa1/AA+, has appointed Deutsche Bank, Dresdner Kleinwort Wasserstein (DrKW) and Goldman Sachs as lead managers of a May 2008 inaugural euro benchmark bond. Launch of the Eu750m-Eu1bn bond is expected after a pan-European roadshow starting next week. Unofficial price talk is in the mid-swaps plus 15bp area.

After a few bumps along the way, senior syndication on the Eu400m five year revolver for TPSA is close to being wrapped up with up to eight sub-underwriters on board. Mandated arrangers ABN Amro, Citigroup and SG invited banks at this level to join with takes of Eu50m for 15bp sub-underwriting, and 45bp up-front on a Eu30m final hold.

Bank of Tokyo-Mitsubishi and Nedship have the mandate to arrange a $236m loan for P&O Nedlloyd. The UK-based company last tapped the market when it mandated Citigroup to arrange a $225m nine year term loan in December 2001. The deal paid a margin of 125bp over Libor and paid a 43.73bp commitment fee.

Rating: Aa2/AA Amount: C$150m (fungible with C$200m issue launched 02/04/03)

Rating: Aa2/AA Amount: $500m

Amount: £193.37m Legal maturity: January 8, 2012

RBS Financial Markets has completed the inaugural issue for its new water finance vehicle, Artesian Finance 2, with a £30m fixed rate bond for Bristol Water. The offering was closed in conjunction with a £14.79m structured bond for the utility through the original Artesian, launched in June last year, which issues index-linked paper.

Amount: ¥12bn Class A notes: ¥12bn

The amazing shrinking swap spread market continued its progress this week. The big event was the announcement of the May refunding on Wednesday, which had a drastic effect on dollar swap spreads. This, in turn, dragged euro swap spreads lower. Next week, the Treasury will sell a record $58bn of new paper, smashing the previous record of $44.5bn set seven years ago. The sale will comprise a $22bn re-opening of the three year note, last seen in 1998, and $18bn sales of five year and 10 year Treasuries. In addition, the five year note will now be sold monthly and the 10 year will be sold eight times a year.

Rating: Aaa/AAA/AAA Amount: $500m