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There was a surge in US dollar, with $867.18 million raised off 34 trades. More interest was seen in the short end, with six trades closed under three months. These came mainly from HSBC Bank USA, which has returned to the short end after an absence of several weeks. Another issuer in the three-month bracket was Pacific Dunlop, the Australian rubber company, with a $20.92 million trade. Landesbank Baden-Wurttemburg closed a $20 million trade in the five-year sector. The note is non-call-six-months and has just one call option. It was a reverse enquiry trade that pays a fixed rate of 3.5% and Credit Suisse First Boston was the bookrunner. Royal Bank of Scotland closed two dollar notes. One is a self-led note for $10 million. It is non-call-two and is floating rate linked to 6m $Libor +91bp for the first two years. After that is pays a fixed rate of 7% annually. The borrower also closed a lower tier two capital issue via Morgan Stanley off its Euro-MTN programme. The coupon pays a fixed rate plus a variation linked to the volatility of the dollar swap rate. The note is listed in Luxembourg, and the investor is one US investment manager.

US dollar raised $1,126 million off 18 trades yesterday. Short-dated notes have been coming back. HSBC Bank and Deutsche Bank both issued three-month notes, the shortest that have been seen in a week. HSBC Bank's $3.01 million note pays a final coupon of 11.050% and Deutsche Bank's trade for $10 million pays a single coupon of 3.500%. DaimlerChrysler Japan Holding went out two months longer with a $20 million five-month trade. And this was not the only auto borrower in the market. VW International Finance closed a $63 million three-year note via Mizuho. The payment date is October 29 and the note is a standard Euro-MTN documentation and associated Uridashi offering in Japan. The coupon of 3.43% is paid semi-annually in arrears and is unlisted. Spintab closed a $100 million one-year trade via WestLB. The note is plain vanilla and pays a quarterly coupon linked to $Libor flat. The issuer has also closed a $13 million one-year trade via Goldman Sachs, announced today. It pays a fixed coupon of 2.5% annually. The note is due to be settled on October 22. At the longer end with 10-year notes were Societe Generale, Abbey National Treasury Services and ABN Amro Bank, with $220 million, $5 million and $10 million notes respectively.

* Australia & New Zealand Banking Group Ltd Rating: Aa3/AA-/AA-

In a week governed by negative credit events, flight to quality was more evident than at any time since September 11. Standard & Poor's (S&P) downgrading of Ford and GMAC into triple-B territory sent auto spreads reeling and had an adverse affect on the whole triple-B sector. A massive profit warning by UK media firm Pearson caused its bonds to widen by over 40bp and created jitters in the credit market generally. The announcement of a $3bn minimum GlobLS transaction for Ford so soon after the downgrade and after reporting a third quarter operating loss of $502m took the market by surprise. The two tranche deal, targeting January 2007 and 30 year maturities, will be priced imminently by lead managers Bear Stearns, Credit Suisse First Boston and Salomon Smith Barney (SSB). Price guidance on the five year tranche is 275bp-285bp, representing a new issue premium of 20bp over outstanding bonds. The 30 year is expected to be priced at 275bp to 280bp over.

Belgium The Eu300m four year term loan for Cofinimmo has been signed by sole mandated arranger SG. The loan was closed slightly oversubscribed but was not increased.

* Profit Century Finance Ltd Guarantor: PCCW-HKT Telephone Ltd

It was a busy end to the week last week in yen. Friday saw 36 trades announced, several of which were over ¥2 billion ($16.63 million). Some triple-Bs and lower were getting involved too. Mitsubishi Motors Credit of America, rated Ba3 by Moody's, announced a ¥1.1 billion deal that matures in December this year. Mitsubishi Electric Finance Europe, rated Baa1, did a ¥2.5 billion 6-month note. Its final coupon is 0.1%. And NEC Capital announced a trade for ¥2 billion that goes out to April next year. It also has a final coupon of 0.1%. Svensk Exportkredit announced three trades, two for ¥200 million and one for ¥100 million. They have terms of 25, 26 and 30 years, and all are power reverse dual currency (PRDC) notes with call options. The only other Swedish issuer announcing trades on Friday was Kommuninvest I Sverige. It did a ¥1.1 billion 26-year note that has a final coupon of 7%. Great Belt came to the market with its 13th and 14th notes of the year, and 10th and 11th of the year in yen. Both were done via Mizuho, for ¥1 billion, mature in October 2021 and have PRDC structures. One pays a fixed rate of 4.05% for the first year before turning into the PRDC with US dollar coupons, while the other pays a coupon of 4.2% for the first year and then turns into a PRDC with Australian dollar coupons. Neither has a call option. LVMH - Louis Vuitton Moet Hennesy did a ¥1 billion floating rate note via Tokyo-Mitsubishi International. It does not have a call option and pays a coupon linked to Libor¥ + 45 basis points. CDC IXIS Capital Markets and Credit Lyonnais Finance (Guernsey) were two other French issuers involved. BMW Coordination Centre did its sixth and seventh notes of 2001. They were ¥5 billion private placements with one-year tenors and plain vanilla structures.

Monday was a day for the usual names in the yen sector. The rarest names were Canadian Wheat Board, which announced a ¥1 billion ($8.23 million) 10-year note via Mizuho, and Volvo Treasury, which did a ¥1 billion 6-month trade. The other issuers doing yen business have all been issuing regularly in the market. The top local authorities in the market were announcing deals again. Kommunalbanken did a ¥500 million Bermuda callable power reverse dual currency (PRDC) note. It has an initial coupon of 4% and Daiwa was the bookrunner. And Kommuninvest I Sverige announced a ¥300 million PRDC via Tokyo-Mitsubishi International. It has a coupon of 7.5% for the first five months before turning into the structured form, and is callable semi-annually. CDC IXIS Capital Markets announced a ¥500 million 10-year trade through Mizuho. It also did a ¥1.1 billion note that goes out to October 2016, and BNP Paribas did two ¥100 million trades. One has a term of three months and pays a coupon of 4%, the other has a term of 30 years and pays 2.5%. Earls Seven, the Deutsche Bank-arranged conduit, announced four notes, two for ¥3 billion, with terms of seven and eight years, and two for ¥1 billion that both have terms of three years. Voyager, the only other financial repackaged issuer in the market, did a ¥500 million and a ¥1 billion trade with respective tenors of 10 and three years.

Did you hear the whistle signifying it's game over at Merrill Lynch debt capital markets? Did you see the white smoke billowing out of the Vatican chimney? We very much doubt it because officially nothing has been revealed. But yesterday (Thursday) our crack regiment of special investigative forces sent through an encrypted telegram that, after some Bletchley Park-like deciphering read: "Kim got Martin job. Stop. Merrill managers gutted. Stop. Expect Merrill fixed income CVs in post. Stop." Can this be true? Has Dow Kim, who is Japanese and not Korean as many amateurs had thought, landed the capital markets job? If so, and nothing is for sure in these dangerous times, we congratulate him and wish him the best of luck - he's going to need a truck-load of the stuff. The debt capital markets group at Merrill Lynch should be the best in the world but some unkind bar flies say it has lost some of its touch in recent years. Shame on you sirs! With Dow Kim in charge - he is said by colleagues to be a risk wizard - this could be the time for Salomon and Morgan Stanley to start worrying and looking over their shoulders.

Banca Agricola Mantovana has added MPS Finance as a dealer to its euro1.5 billion ($1.36 billion) Euro-MTN programme.

Bank Austria has raised the ceiling off its Euro-CP and CD programme to euro5 billion ($4.52 billion) from euro4 billion. Citibank, Credit Suisse First Boston and HypoVereinsbank have been added as dealers while UBS Warburg has been dropped from the dealer panel.

Olivetti, the Italian telecoms company, has revealed the banks that will underwrite its Eu4bn rights issue. According to observers, all the banks have committed how much they are prepared to underwrite the issue and Olivetti has been able to underwrite the issue by more than it needed.