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Investors were sticking to the high credits and only two notes were issued below A2. Twenty-nine notes were closed altogether. Names such as Hitachi Asia, SGA, Banque et Caisse d'Epargne de l'Etat Luxembourg and MMC International Finance were at the short end, while the two- to four-year sector was taken up by Merrill-Lynch arranged SPV, Apollo Spires. Caixa Geral de Depositos issued two long-dated trades. The first was a 25-year non-call-three ¥500 million ($4.27 million) via Sanwa. It is a power reverse dual currency (PRDC) with a fixed coupon for the first three years. If the trade is not called it then becomes FX linked, based on the US dollar interest rate minus the yen interest rate. The second note was a ¥200 million PRDC via Mizuho. The 30-year non-call-one pays a fixed rate of interest for the first year, when it will flip into floating rate based on the dollar/yen exchange rate. Vorarlberger Landes- und Hypothekenbank closed a ¥500 million PRDC due to be settled on October 4. The 25-year non-call-three pays a fixed rate of 5.15% for the first three years, when it becomes a dollar/yen FX-linked floater and pays interest semi-annually. Tokyo-Mitsubishi is the bookrunner.

Yesterday saw the lowest number of yen trades announced for some time. There were 11 deals announced, and all but one of them was from a triple-A borrower. Baa1-rated Daiwa Securities SMBC Europe's ¥500 million ($4.29 million) trade was its 103rd yen trade of the year. It goes out to October 2016 and pays a final coupon of 4%. Also issuing a ¥500 million deal was CDC IXIS Capital Markets. The term is 20 years and the note has a non-call three structure, callable annually thereafter. Kommunekredit did a ¥900 million 20-year trade. Mizuho was the bookrunner and the note has a Bermudan callable power reverse dual currency structure, callable after one year and annually thereafter. Mizuho also led a deal for Pfandbriefstelle der Osterreichischen Landes-Hypothekenbank. The ¥1 billion trade is a non-call three-year note, with a fixed coupon of 5.1% during those first three years and then linked to the US dollar and yen exchange rates. It is callable annually after the first three years. And Nederlandse Waterschapsbank announced a ¥1 billion 25-year note via Nomura. It is callable in March 2004. World Bank did two notes: a ¥1 billion 30-year deal and a ¥2 billion 31-year trade. And International Finance Corp did two ¥1 billion trades, both with tenors of 30 years.

Another very slow day for yen yesterday meant just 10 trades were announced. Only BNP Paribas did more than one. It announced a ¥100 million ($860,000) 31-year note that pays a final coupon of 4%, and a ¥304 million two-month note that pays a final coupon of 16%. And France was the only country issuing more than one yen trade too. As well as BNP Paribas's notes, CDC IXIS Capital Markets announced its 194th yen note of 2001, with a ¥500 million deal that goes out to October 2021. Credit Lyonnais Finance (Guernsey) did a ¥62.13 million trade that matures in October next year, and Unibail did its 10th note of the year. It was a ¥1 billion trade that goes out to October 2003. Morgan Stanley was the bookrunner, and the note is not callable, but has a floating interest rate based on 3m ¥Libor+12.5 basis points. Bayerische Landesbank announced a ¥1 billion deal via Shinkin International. It is an annually-callable power reverse dual currency (PRDC) note. Svensk Exportkredit did a ¥1 billion trade 30-year note. It is not callable until a year-and-a-half of its term is up, and has a PRDC structure too. UBS announced a ¥5 billion deal, the biggest yen trade of the day, that goes out to April next year. Merrill Lynch did a ¥500 million 25-year trade that has a final coupon of 4.5%. And World Bank went for a ¥1 billion 30-year note that pays 9.5%.

Fourteen trades were closed in yen on Thursday. And issuance in the currency was dominated by triple-A entities. Low investor confidence has meant that only 10% of issuers in yen came from the single-A sector. Vorarlberger Landes-und Hypothekenbank did the day's longest trade. The ¥500 million ($4.29 million) note goes out to 2031 and pays interest semi-annually. The note will be issued on October 22 2001. KfW International Finance also saw opportunities at the long-end. It issued a thirty-year ¥1 billion note that offers interest annually and pays a final coupon of 5%. The note will be issued on October 16 2001. Hitachi Metals America also issued a ¥1 billion note. The trade was issued at a price of 100% and pays a final coupon of 0.18%. The note, which was led by Mizuho, will be issued on October 17 2001. Kommuninvest went out a little longer with a ¥1.1 billion 25-year note that pays a final coupon of 5.5%. The trade will be issued on October 4 2001.

BP Trinidad & Tobago (BP) put pen to paper on a $2 billion Euro-CP facility on September 21. The Royal Bank of Scotland (RBS) is the arranger. BP's new shelf, which will run alongside its existing $2 billion Euro-CP programme under the name BP Amoco, started trading on Tuesday September 25 and is one of the few facilities in the market to offer coupon-bearing notes as opposed to issuing paper at a discount. Gary Admans, senior capital markets executive at BP, explains: "The coupon-bearing structure allows us to issue CP at the most efficient after-tax rate." Trinidad and Tobago has tax laws which state that you can either pay a withholding tax of 20% or pay the investor a coupon of 10%. Barry Gartner, head of Euro-CP at Barclays Capital, one of the dealers off the programme, says: "It's different in the CD market where notes offered at a discount are the less common form. But in CP this kind of coupon-bearing paper is quite unusual." The tax laws also mean that only four jurisdictions are accessible to the issuer at the moment. These are France, Italy, Switzerland and the UK. Admans, at BP, says: "Japan is an investor base that we are looking into, and is something we may do later, but for now we are restricting our activity to the jurisdictions that suit our requirements." It is the first corporate to have signed a Euro-CP shelf since July, and is one of only 16 that have signed all year. The same period last year saw 23 new corporate programmes. The dealers are the arranger, Barclays Capital, National Westminster Bank (NatWest) and UBS Warburg. It is likely that NatWest will be dropped at the next update, as it will be trading under the RBS name from October 8 this year as a result of their merger.

The loan market's response to Middle Eastern deals has moved from genuine panic to a respectable calm two weeks after the attacks on the US. Talk in the loan market during the first seven days after the tragedies was that lines were being pulled from Middle Eastern institutions. But despite the US's promise of retaliation, bankers are reviewing facilities on a case by case basis.

Out there in the Euromarkets, life is grim. The sheer volume of casualties in New York and Washington, and the passengers on the hijacked planes, means that many houses have lost friends and colleagues. Three weeks after the disaster we are still walking around in a daze. But every professional Euromarketeer knows they must pick up the pieces while continuing to grieve for those who died or were wounded. The world's stockmarkets are in their most precipitous decline since the Autumn of 1998. Valuations of even the best investment, and commercial banks, have tumbled. The M&A game seems to be on indefinite hold. IPOs are virtually non-existent and household names such as Prada have been forced to postpone their stockmarket flotations.

Coca-Cola Amatil has updated its $2 billion debt instrument programme and has dropped ABN Amro as a dealer.

Utilities deliver and dispose of the vital needs and functions of society. As such, they are prized by investors for their stable, non-cyclical attributes. But now, more of Europe’s energy utilities are slipping towards lower, riskier ratings. Market liberalisation is driving the change, and the leaders have responded with aggressive cross-border, multi-utility consolidation strategies. Quentin Carruthers reports on how the capital markets are funding this increasingly competitive industry