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Thirteen euro trades were closed on Thursday. Volume was low and maturities short compared to the rest of the week. There were some large trades. Republic of Iceland closed a euro900 million ($822.13 million) MTN. The trade is only the second issued off the issuer's $1 billion Euro-MTN programme. The note pays interest quarterly and matures on April 5 2005. Fiat Finance & Trade concluded the shortest-dated trade - a euro200 million note that matures on October 4 2001. The note pays interest singularly and carries a final coupon of 3.915%. France produced the busiest issuers. Societe Generale (SG) and Societe Generale Acceptance (SGA) both closed trades off its euro30 million Euro-MTN programme. SG closed a one-year euro100 million note and SGA is set to issue a five-year euro20 million note. Both trades have a zero interest payment frequency. And Credit Lyonnais Finance (Guernsey) closed a euro5 million MTN that has a tenor of four years. The note pays interest annually and carries a final coupon of 8.000%. Deutsche Bank SPV, Earls, is to issue a one-year euro22 million note that pays interest singularly. Unibanco - Uniao de Bancos Brasileiros closed the smallest trade - a euro320,000 note that matures on January 3 2002. BCL International Finance also went for low volume, closing a euro4 million MTN that matures on October 9 2003. The note pays interest singularly and carries a final coupon of 5.500%.

Fannie Mae looks set to benefit from a broad agency rally when it comes to market today (Friday) with a $2bn re-opening of its May 15, 2011 Benchmark Note and a new $5bn September 15, 2004 issue. After a rally at the short end of the agency market, demand started to move out along the curve this week, with good buying into the eight to 10 and 10-12 year sectors. That should favour the re-opening of Fannie Mae's 10 year Benchmark bullet, due to be priced today. EuroWeek understands that the deal is heavily oversubscribed.

The European telecoms sector was once again under pressure this week as France Télécom was cut from A3/A-/A- to Baa1/BBB+/BBB+, triggering coupon step-ups of 50bp on its covenanted deals. These include the Eu3.5bn 5.75% March 2004 and Eu3.5bn 6.75% March 2008 euro issues as well as all of the telco's dollar paper. The downgrades had been widely expected by analysts and investors after the French telco revised its debt reduction targets earlier this month. However, there was surprise that Fitch and Standard & Poor's maintained negative outlooks on the credit, prompting fears that the high triple-B ratings floor that had been seen for several European telecoms credits might not be as solid as previously thought.

Freddie Mac executed its latest EuReference Note sale this week, a Eu5bn 10 year transaction. Freddie's safe haven drew many new investors to the deal, said a senior spokesperson for the agency. The 5.125% January 2012 notes were priced yesterday (Thursday) to yield 46bp over the 5% Bund due in July 2011, or 11.6bp over the old Freddie Mac 5.75% EuReference Note due in September 2010. The leads were Dresdner Kleinwort Wasserstein, Goldman Sachs and Schroder Salomon Smith Barney.

The European telecoms sector was once again under pressure this week as France Télécom was cut from A3/A-/A- to Baa1/BBB+/BBB+, triggering coupon step-ups of 50bp on its covenanted deals. These include the Eu3.5bn 5.75% March 2004 and Eu3.5bn 6.75% March 2008 euro issues as well as all of the telco's dollar paper. The downgrades had been widely expected by analysts and investors after the French telco revised its debt reduction targets earlier this month. However, there was surprise that Fitch and Standard & Poor's maintained negative outlooks on the credit, prompting fears that the high triple-B ratings floor that had been seen for several European telecoms credits might not be as solid as previously thought.

Freddie Mac completed the last of its run of large benchmark deals launched after the events of September 11 yesterday (Thursday) with the successful pricing of a new Eu5bn 10 year EuReference Note. The January 2012 issue had been marketed at an indicated spread of 45bp over Bunds, or 13bp wide of the agency's September 2010 EuReference Note, which, due to the steepness of the curve, made it flat to the old deal. But the agency took advantage of oversubscription to price the deal at 46bp over Bunds, which at the time of pricing yesterday worked out at 11.6bp over the older deal, and brought the new on-the-run deal inside the old on a Libor basis.

Bayerische HypoVereinsbank has set up a $5 billion MTN programme through its Singapore branch (HVBS). The arrangers are Development Bank of Singapore, HSBC and HypoVereinsbank. Walter Fuchs, treasurer at HVBS, says: "The programme will allow us to take advantage of our position in Asia so that funding for the HVB Group can be co-ordinated globally." The inaugural trade off the programme was launched on September 24 - a $100 million deal with a two-year maturity. But as Fuchs comments, there will be plenty of other currencies to come. He says: "There is no strong preference from our side, but we expect most issues to come in either Asian currencies - Hong Kong dollar, Singapore dollar and yen - or in US dollar. One of the key considerations for signing the programme through HVBS was to promote Asian-currency bond and derivative markets so HVB will not shy away from issuing in the Asian currencies." The dealers are ABN Amro, Barclays Capital, DBS Bank, HSBC, HVB Singapore, HVBS, JPMorgan and Tokyo-Mitsubishi International.

Infineon, the German semiconductor manufacturer, denied claims on Wednesday that it would need to access the equity markets in the near future. Analysts have been speculating that despite Infineon's raising Eu1.5bn in July via Goldman Sachs, the company was suffering so badly that it would soon need to raise more capital.

Kvaerner, the Anglo-Norwegian engineering company battling to fight off bankruptcy, has managed to underwrite NKr500m of its NKr2bn (Eu250m) rights issue. The firm made the announcement on Wednesday, as it revealed that it was also in discussions with shareholders about arranging the rights issue as a three year convertible. The group avoided collapse over the weekend by reaching a deal with its lending banks, but needs to complete the equity deal to ensure its survival.

Two small secondary share offerings this week demonstrated that investors are starting to gain in confidence after New York's chaos. Schroder Salomon Smith Barney (SSSB) won a competitive bid to sell a Eu69.3m stake in Lagardère, the French holding company.

Leak's hunch that Rodolfo Diotallevi, who left Merrill Lynch's origination desk last week, would not be out of the market long has proved right. And it didn't take a genius to work out that he might be tempted to follow in the footsteps of his old chums Andrea Giordani and Pietro Sollecito, ex-Merrill origination men, who left the bank for Nomura last June. But poor Rudy is getting one of the shortest gardening leaves ever - barely nine days out of the office. He is due to start his new role at Nomura straight away and will be responsible for marketing facilities in debt capital markets for Spain and France and will cover MTN origination for Europe. Morgan Stanley's Frair Appleby-Walker has splashed out on a rather nice set of new wheels to cruise around London in. She's got herself a dark blue Audi TT and can be seen pushing the speed limits on country roads at the weekend. HSBC's Annemarie Ganatra has been getting into the performing arts. She has driven her fellow traders, Evie Christodoulidou and Fergus Kiely, mad with her singing for years. Now she has agreed to get professional voice training, and is also learning to dance. Rumour has it she wants to audition for the next series of Popstars...