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Is Germany really becoming a European Japan? It is an argument that is gaining credibility not only in New York and London but perhaps most worryingly in Frankfurt. Alongside the weak banking system, common characteristics include stock market and property bubbles, unproductive corporate cross-holdings, reliance on banks as big lenders in the economy and social barriers to change. Philip Moore reports. Dark clouds are gathering over Germany, a country that was not so long ago Europe's brightest economic prospect. The Pfandbrief, once a symbol of strength, is weakened. The guarantee mechanisms of Anstaltslast and Gewährträgerhaftung, which made life so simple for the Landesbanks, survive only because of an artificial life support machine that will be turned off in 2005. The plug has already been pulled on the Neuer Markt.

The terrible state of the equity markets means that many companies are either woefully undervalued or desperate to sell off non-core businesses to raise much needed capital. And with venture capitalists cash rich and hungry for the right investment, Germany is proving to be one of the most fertile grounds for leveraged buy-outs in Europe. Philip Moore reports. Misery for the German public equity market ought, in theory, to translate into a substantial increase in opportunities for private equity investment. After all, how much longer can publicly listed companies in Germany be expected to tolerate equity valuations that are ludicrously low? To date, they have remained remarkably stoical about their depressed multiples. However, with plenty of private equity money sloshing around Germany, bankers say that in the absence of a dramatic upsurge in the German equity market, the emergence of a slew of public-to-private transactions ought only to be a matter of time.

The syndication of the $125m one year facility for Koçbank will be wrapped up in the next few days, well oversubscribed. The borrower is set to accept an increase. Mandated arrangers are American Express Bank, Bank of Tokyo-Mitsubishi (joint bookrunner), Citigroup/SSSB, Commerzbank, Dresdner Kleinwort Wasserstein (facility agent, documentation), Landesbank Schleswig-Holstein, Natexis Banques Populaires, Standard Chartered (information memorandum), UFJ Bank, Wachovia Bank and WestLB (joint bookrunner).

Despite have ridden out the furore over funding gaps, Fannie Mae and Freddie Mac have faced an increasing threat from European agencies, sovereigns and other agencies. However, Fannie and Freddie's hard work in the callable market proves that they remain a force to be reckoned with. Neil Day reports.

Rating: Ba3/B+/B+ Amount: $400m

A shock drop in US consumer confidence earlier this week darkened the mood in the markets. But firmness in equities and relative stability in credit spreads sparked a small flurry of issuance before continental Europe closed for All Saints' day, today (Friday). Highlights were KfW's blowout Eu5bn bond and Poland's debut in sterling The market is waiting to see what the Fed will do next week. It is expected to cut interest rates by 50bp, unless today's US employment figures are surprisingly upbeat.

Rating: Aa2/A+/AA Amount: $650m