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Polish gas monopoly PGNiG has adopted an unusual covenant package, including coupon step-ups, for its unguaranteed Eu500m five year Eurobond via ABN Amro. It is due to finish its one week European roadshow in Amsterdam today (Friday). The state owned issuer has been forced to respond to concerns not only about its potential privatisation - as with previous emerging market issuers - but also about a possible fall in credit rating to speculative grade.

The rapidly growing Polish investor base has made an important advance by participating for the first time in large numbers in a Eurozloty bond issue. GMAC issued a Z100m (Eu26m) two year bond via Commerzbank on Tuesday. "We were able to make secondary sales of zloty Eurobonds to Poland in the past," said Tomas Cerny, head of origination at Commerzbank Capital Markets in Prague. "But this issue was a real breakthrough in terms of primary demand for the bond."

Seventeen trades have been closed in US dollar, and over $1.05 billion was raised. No trades were issued with a term of less than one year and Lloyds TSB Bank was the only issuer in the one-year sector with a $8.40 million note. And Legal & General Finance went out to 18 months with a $58 million trade via UBS Warburg. The trade is floating rate linked to 3m $Libor +6bp and is non-callable. In the two-year sector Landesbank Sachsen closed a $20 million floating rate note linked to 3m $Libor -1.5bp and interest is paid quarterly. Barclays Capital was the bookrunner. Republic of Argentina issued two three-year notes: one for $227.65 million and the other for $95.40 million. Svensk Exportkredit closed a $70 million seven-year trade due to be settled on October 24. Tsubasa Europe is the bookrunner and the trade pays a fixed coupon of 4.5% semi-annually. And in the longer term Bayerische Landesbank closed a $5 million fixed rate that goes out to 2011. It is due to be settled on October 17 and is annually callable. Mizuho is the bookrunner. But this was not the longest-dated trade. Asset Repackaging Trust issued a $2 million that goes out to 2013.

Globals * Fannie Mae

Just seven trades, totalling $427.12 million were issued in US dollar and four came from HSBC. The bank concentrated its trading at the short end and the HSBC Investment Bank (Netherlands) issued two notes for $20 million, which both mature on December 7 this year. They are due to be settled on October 17. And HSBC Bank USA issued two six-month notes: one for $1.54 million and one for $80,000. Both notes are due to be settled tomorrow and will mature on April 12 2002. Guaranteed investment contract- (gic-) backed issuer John Hancock Global Funding issued a $320.50 million with a tenor of 23 months. And Achmea Hypotheekbank went out to three years with a $60 million trade, due to be settled on October 19. Beta Finance Corp was the only borrower to issue in the long-term maturity sector. Its $5 million note goes out to 2011 and is due on October 17.

Northern Rock closed two large notes, both due to be settled on October 17 and both going out one year. Lehman Brothers was the lead dealer off both trades. One was for $300 million and pays a floating rate of interest linked to 3m $Libor plus a margin. The other note, for $325 million, was linked to 1m $Libor. Royal Bank of Scotland issued three $10 million trades, two of which go out to 2011. One trade is due on October 19 and goes out to 2007. It is a range accrual note linked to 3m $Libor arrears during years two to six and will pay a fixed rate of 5.900%. During the first year the coupon is fixed at 5.000%. Lehman Brothers is the bookrunner. Royal Bank of Scotland also issued a $10 million 10-non-call-two trade that is linked to 6m $Libor +60bp until the call and pays a fixed rate of 7.250% annually thereafter. The note was self-led. And it closed a $10 million 10-non-call-two led by JPMorgan. Interest is linked to 3m $Libor +63 bp until the call and 7.250% annually thereafter.

Volumes crept back up again as UD dollar brought in $752 million on Friday, compared to the $2.67 billion that went through the market altogether, mostly in euro and yen. KfW International Finance closed a $20 million four-year trade via HSBC. The note is due on October 12 and pays a fixed rate of 4%. It is callable after one year and semi annually thereafter. K2 Corporation, the Cayman Islands-based financial corporate, issued a $30 million one-year trade. Instituto de Credito Oficial closed a $25 million 18-month trade that is due to be settled on October 11 and pays interest quarterly. Bank of Nova Scotia was active in the mid-term, with a $30 million three-year note. It pays a final coupon of 11.400%. And Hitachi Asia closed the longest-dated US dollar trade: a $500 million eight-year note that pays a final coupon of 5.050%.

The market reacted sensitively to the military action taken against Afghanistan on Sunday night. And public holidays in Japan and the US on Monday meant that overall just 47 trades were closed on Monday. US dollar saw just under a quarter of the action, with 10 deals closed. Hitachi International (Holland) came to the market with a $20 million six-month note, its first note in US dollar this year having previously issued only in yen. Other issuers in the mid-term sector were all bank names, such as Barclays Bank with a five-year $18.78 million trade that pays a final coupon of 5.800% and pays interest semi-annually. It also issued a one-year $30 million deal. Commonwealth Bank of Australia also closed a five-year $10 million note that pays interest quarterly and a final coupon of 6.635%. And BNP Paribas was in the five-year sector with two $5 million notes. Freddie Mac and Lehman Brothers SPV Anthracite Rated Investments closed the longest-dated trades. The former issued a $50 million note that pays a final coupon of 5.200% and goes out to 2007, while the SPV also issued a six-year trade for $20 million.

Versatel this week became the latest alternative telecoms carrier to announce a capital restructuring, with a Eu1.7bn debt for equity exchange plan. The Dutch carrier's move followed Colt Telecom, which last week strengthened its balance sheet with a £400m equity offer underwritten by its majority investor Fidelity.

Nasdaq and the S&P 500 index yesterday (Thursday) topped pre-September 11 levels, sparking further optimism that the capital markets are returning to business as usual. Corporate borrowers braved the market late this week, although the focus remained overwhelmingly on defensive sectors and instruments. Issuance was light in dollars, although Fannie Mae yesterday offered $2bn of five and 10 year Benchmark notes, giving investors another opportunity to buy top quality paper after a brace of issues from US agencies last week.

France Mandated arrangers CDC IXIS and JP Morgan have closed the Eu1.1bn equivalent loan for oil and gas services provider Technip.

Westdeutsche Landesbank Dusseldorf (WestLB) signed a euro15 billion ($13.66 billion) global CP programme yesterday, October 11. Morgan Stanley and WestLB were co-arrangers. Issuance off the programme will begin next week. Michael Renner, head of rates, Europe, at WestLB says: "We expect to be in the Euro-CP market early next week and will issue in the US CP market shortly after. We aim to increase the outstandings over time and would like to reach between euro5 billion and euro7 billion in our first year." As well as euro and US dollar, the issuer will look for opportunities in yen, Hong Kong dollar, sterling and Swiss franc. Renner says the nine-strong dealer panel will provide much wider distribution. He says: "We saw the need to cover both markets and to reinvent our existing programmes. We will be targeting big CP investors worldwide." The issuer already has two short-term debt programmes: a $2.5 billion US CP programme with Lehman Brothers and WestLB as dealers, and a Dm5 billion ($2.33 billion) Westbills programme - a domestic shelf with only WestLB as dealer. Neither programme has debt outstanding and they will both be taken off the market once the global CP shelf is fully working. Renner adds: "We don't intend to do a roadshow initially. Our name is already well established in both markets and our marketing will be done initially through the dealer panel and ourselves." The programme has short-term ratings of A-1+ and P-1 from Standard & Poor's and Moody's respectively and long-term ratings of AA+ and Aa1. The dealers for the Euro-market are Citibank, Goldman Sachs, Lehman Brothers, Morgan Stanley and WestLB. The dealers for the US are Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley and WestLB.