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Investment bankers were this week universally upbeat about the prospects for international debt issuance by emerging market credits in 2002, despite Argentina’s record breaking $155bn debt default over the Christmas break.

Dollar swap spreads contracted sharply this week as the traditional upsurge of new issuance was celebrated with even more gusto than usual. Moreover, an overwhelming portion of the new debt was swapped to floating rate, exerting irresistible downward pressure on swap spreads. By the close of trading in New York yesterday (Thursday), the two year swap spread was at 43.25bp, the five year at 73bp and the 10 year at 74bp. At the beginning of the week, the two year swap spread had touched 49bp while the 10 year had dealt up to 77bp.

* Crédit Lyonnais SA Rating: A1/A

* Land Brandenburg Amount: Eu250m (fungible with Eu500m launched 09/10/01)

There was little sign of the market winding down for Christmas on Friday as 28 euro trades were done. Landesbank Schleswig-Holstein dominated proceedings as its three euro250 million ($225.75 million) issues made up almost 54% of volume traded. The three notes were led by Salomon Smith Barney All three notes mature on June 2003. European Credit (Luxembourg) went to the other extreme. While it kept its volume relatively small, it closed seven trades. The notes made up euro85 million combined. Four mature in 2004, two in 2006 and one in 2011. Westland/Utrecht Hypotheekbank did the shortest-dated trade. Its euro50 million note has a six-month tenor and was led by ABN Amro. It pays a single coupon of 3.237%. At the other end of the maturity curve, BBVA's financial repacked vehicle, Atlanteo Capital, did a euro4.30 million note that goes out to December 31 2031. Caisse Centrale du Credit Immobilier de France closed an eight-year euro15 million trade via JPMorgan. The note pays an annual coupon go 6.000% and the capital redemption is linked to the Nikkei 225 index.

Euro was the most traded currency with 23 notes issued, and it took 54% of all market volume. International Endesa closed the largest trade - a euro500 million ($451.38 million) note that matures on April 10 2003. Bank Austria was also looking for both volume and maturity with a euro125 million issue that goes out to December 27 2029. Although there was a good spread of nationalities, French issuers were by far the busiest, closing seven trades. BNP Paribas did one-year trades for euro1.6 million and euro5 million. It also closed an eight-year euro10 million note that pays interest semi-annually. Credit Agricole Indosuez did a euro20 million note and a euro50 million note. Both issues carry a tenor of five-years. German issuers were also among the most active. Volkswagen International Finance closed a six-month euro50 million trade via JPMorgan. The fixed-rate note pays a coupon of 3.200%. Deutsche Telekom closed a fixed-rate euro25 million note. It pays a coupon of 3.828% and matures on January 27 2003. There were also six trades done by financial repackaged vehicles. Banc of America's Helix Capital (Jersey) and Helix Investments II did euro85 million and euro78.50 million notes respectively. Both notes carry tenors of 25-years.

Just one of the 15 trades done came from outside of the banking sector as $291.68 million was closed. Deutsche Telekom stood out with a one-year euro30 million ($27.09 million) note. The issue carries a fixed-rate coupon of 3.625%. On a day of low volume, Svensk Exportkredit did the largest trade - a euro100 million note that has a tenor of five-years. The note comes off the issuer's $10 billion Asian MTN programme and pays a semi-annual coupon of 4.100%. The next largest trade came for half that volume - Bank Austria closing a 20-year euro50 million note. Deutsche Bank was the busiest issuer. It closed four notes for euro60 million in total. Three of the notes mature in 2006, while the other matures on February 15 2007. Mizuho led a four-year euro20 million trade for International Bank for Reconstruction & Development. The note pays a semi-annual coupon of 3.280%. Banque et Caisse d'Epargne de l'Etat Luxembourg closed an eight-year euro15 million MTN and Abbey National Treasury International did a euro9.41million note that matures on June 19 2003.

Euro had another strong day's trading as 15 notes were closed for $546.29. Yet the currency was dislodged from its normal top spot in terms of volume by yen. European Investment Bank closed a euro100 million ($90.10 million) note via Salomon Smith Barney. The note matures on December 15 2006. Caisse Nationale Des Caisses d'Epargne et de Prevoyance (CNCEP) went out 12 years with its euro100 million trade. The note pays an annual coupon of 5.250%. As well as CNCEP, four other French issuers were active. BNP Paribas issued two notes. It did a euro2.50 million note that matures on January 18 2005. And it also self-led a euro54.90 million note that matures on December 15 2008. Credit Agricole Indosuez closed two notes for euro4.20 million combined. Societe Generale Acceptance did a five-year euro50 million MTN. CDC IXIS Capital Markets reached out to December 19 2031 with its euro70 million note. Salomon Smith Barney was the bookrunner. Goldman Sachs closed a euro50 million note that goes out to January 2 2013. The deal was self-led. Goldman Sachs also placed a euro10 million note for Volkswagen Financial Services. The trade matures on December 5 next year. EFG Hellas placed the shortest-dated trade - a euro10 million note that matures on January 9 2002.

The New Year has begun quietly as the market slowly gets back to work. Jut seven euro trades were closed for $1.01 billion. There was a good mix of nationalities and sizes though. A few issuers went for large public deals. Dexia Credit Local de France closed a three-year euro500 million ($449.85 million) note via Nomura International. The note pays a quarterly coupon of Euribor +0.05000%. Pfandbrief Bank International closed the next largest trade - a four-year euro300 million note that pays an annual coupon of 3.880%. And Credit Lyonnais Finance (Guernsey) did a three-year euro250 million issue. The note pays interest quarterly. At the other end of the volume scale, Beta Finance Corp closed a euro12 million trade that matures on January 7 2003. Rabobank International issued a euro15 million note through its financial repackaged vehicle, EDAM Securities Two. The note matures on December 1 2010. Bear Stearns closed for just euro1 million. Its note goes out to June 30 2007. Essent Nederland closed the shortest-dated trade - a euro66.28 million note that settles on July 11 of this year.

The European loan market will not have to wait long for its first jumbo syndication in 2002, as France Télécom confirmed on Wednesday that it will launch its Eu15bn refinancing at the beginning of next week. France Télécom will open what is set to be a busy yet testing period for the European loan market. The first month of the year is traditionally a tricky time for borrowers and arrangers as participants search for true pricing and liquidity levels.

The European loan market will not have to wait long for its first jumbo syndication in 2002, as France Télécom confirmed on Wednesday that it will launch its Eu15bn refinancing at the beginning of next week. France Télécom will open what is set to be a busy yet testing period for the European loan market. The first month of the year is traditionally a tricky time for borrowers and arrangers as participants search for true pricing and liquidity levels.

Freddie Mac will next Thursday launch the largest ever fixed rate bond issue, a $7bn Reference Note, as it seeks to take advantage of favourable primary market conditions to avoid the problems interest rate volatility is posing its calendar programme. All of the US agency's Reference Notes have a target size of around $10bn, although lower at launch, but the volatility of the last few months has presented Freddie Mac with original issue discount (OID) problems that threaten to hamper increases to its outstanding deals.