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The past five weeks have seen spreads widen, investors buying up highly-rated paper if they are buying at all, and volatility in equities. But despite the challenges, the market has proved to be relatively robust and volumes have not sunk as low as they could have. Private placement issuance in September dropped below the volumes for each of the previous four months. From May to August the monthly volume did not drop below $25 billion but in September it was down to $22.75 billion. Many dealers are surprised that the market did not suffer a lot more. Despite the market slowdown, triple-A issuance has boomed. The number of trades by triple-A borrowers went up from 259 in August to just 262 in September, according to MTNWare. But the volume almost doubled. About $41.74 billion was issued in triple-A debt in September, with Freddie Mac and two supranationals - World Bank and European Investment Bank - raising over $23 billion between them. The much-talked about flight to quality has done these issuers a lot of good. And Christopher Cox, head of Euro-MTN trading at Schroder Salomon Smith Barney, says: "The agencies have done good business lately. There are those accounts that want liquidity and others that want to take structured interest-rate views in dollar without combining this with credit risk: this has benefited the agencies." Lower credits have been hit hard. The triple-B sector had been seeing volumes as high as $13 billion in April this year. But September volumes were down to just $2.45 billion - the lowest monthly volume all year. Simon Hill, Euro-MTN trading at Credit Suisse First Boston, says: "In general, the lower the rating, the greater the widening in spreads. The credit market is much more sector specific than it used to be though: telecoms, autos and airlines have been especially hard hit." He adds: "Spreads for double-As and below have widened. Yet many issuers won't pay the new spreads - they are waiting for spreads to tighten. However I don't see spreads coming in this year."

The UK mid-cap sector continues to show signs of life with both Paladin and Future Network launching equity offerings this week. Future Network, the specialist consumer publishing company, gained approval at its EGM on Monday for a £34.6m six-for-five rights offering, fully underwritten by Morgan Stanley and Beeson Gregory.

Railtrack bondholders will today (Friday) be asked to sign a standstill agreement if they wish to benefit from government guarantees on the firm's £1.5bn outstanding debt after an initial 45 day administration period. Unlike the company's shareholders, bondholders have been offered a way to recoup their capital, but many are angry at their treatment since Railtrack was placed in administration on October 7. They feel coerced into signing an agreement that may not be in their interests.

Garanti Bankasi this week announced that it would be absorbing Osmanli Bankasi in an unexpected domestic merger on October 31. Garanti and Osmanli have kept their plans quiet and the announcement has surprised the international markets.

GMAC Commercial Mortgage Bank (Ireland) has been added as a new issuer to GMAC's euro7.5 billion ($6.76 billion) Euro-CP programme. GMAC can now also issue CDs off the facility.

Hansabank has added Nomura to the dealer panel off its $500 million debt issuance programme.

Heidelberger Zement has slashed four dealers off its euro3 billion ($2.71 billion) Euro-MTN programme. Credit Suisse First Boston, Goldman Sachs, JPMorgan and UBS Warburg have been replaced on the dealer panel by Barclays Capital, BNP Paribas, CDC IXIS, Bankgesellschaft Berlin, Schroder Salomon Smith Barney and SEB Merchant Banking. Christian Kammann, treasurer at Heidelberger Zement, says: "We put our programme together in 1996 and we have kept the same dealer panel throughout that time. But we were beginning to see that a fair amount of our deals were being done via reverse enquiry. So what we have done is to reward those dealers that have provided us with the big volumes." The issuer also upped its programme limit from euro2 billion to euro3 billion. Kammann says: "We began the programme with a euro1 billion benchmark and this ate into much of our limit. We set up the programme with the aim of being flexible and upping the limit allows us to do that."