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* Landesbank Baden-Württemberg Rating: Aaa/AAA/AAA

Do we hear that they are changing the palace guard at Lehman Brothers in London? Taking into account that the firm's New York operations were brought to a virtual standstill by the terrorist attacks on September 11, Lehman had an outstanding year in 2001 and ran rings around some of its larger competitors. We have already praised Lehman's chairman and CEO, Richard Fuld for exemplary leadership in those dark hours. Yes, it's true that he never sent us an e-mail to say thank you, but he's a busy man and is probably preoccupied with good deeds and ensuring that his staff receive excellent bonuses. In the London office there should be good bonuses for Marco Figus who has been leading the debt capital markets group with the skill and panache which has become his trademark. In the primary markets and in syndicate, Lehman always punches well above its weight and when we speak to borrowers, there is fulsome praise for Lehman's coverage in Italy (some say that it should almost be referred to the monopolies commission) and the firm's financial institutions group. Are there any chinks in the Lehman debt armour? The only slightly negative comments we hear are that the firm's trading capabilities in Europe sometimes do not match those of New York. We have no doubt that the European CEO, the formidably clever and still absurdly young Jeremy Isaacs, is already addressing this issue.

With European M&A volumes continuing to disappoint, news this week that US-based company AEP is selling off its UK interest Seaboard for around £1.5bn was a much needed boost to a loan market desperate for corporate activity. AEP has been discussing the sale of its West Sussex arm since its merger with Central and South West Corp in the middle of 2000. Advising AEP on the sale of Seaboard are ABN Amro and Citigroup/SSSB.

Bookrunners on France Télécom’s jumbo Eu15bn refinancing spoke of their anger this week at the behaviour of some of the deal’s mandated lead arrangers, who are believed to have advised junior syndicate banks not to join the loan in primary syndication but instead buy the asset in the secondary market.

Bookrunners on France Télécom’s jumbo Eu15bn refinancing spoke of their anger this week at the behaviour of some of the deal’s mandated lead arrangers, who are believed to have advised junior syndicate banks not to join the loan in primary syndication but instead buy the asset in the secondary market.

European credit spreads stand at historically wide levels, and to fund managers the situation represents an excellent investment opportunity. But just when an accurate reading of the picture is ever more critical, no one bond index provider has yet established itself as a clear leader in the European field. Gareth Quantrill, investment manager for corporate bonds at Scottish Widows Investment Partnership, described the reliability of pricing data as a major challenge, adding: "As corporate bonds have become more mainstream, investment consultants are not so comfortable with the use of sole index providers."