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Reports in the UK national press this week that lenders to the National Air Traffic System (NATS) Private Finance Initiative/ Public Private Partnerships (PFI/PPP) project have encouraged the consortium to seek a government bail-out have been dismissed by the deal's mandated lead arrangers and underwriters Abbey National Treasury Services, Bank of America, Barclays Capital and Halifax, which describe the reports as pure speculation. Because of the airline crisis, the Railtrack fiasco and widespread union and public concern over the privatisation of the air traffic system, this deal is beginning to attract political significance.

Globals * BellSouth Corp

Fifteen notes were issued in US dollar, which made up over one third of the market by volume. National Rural Utilities Cooperative Finance closed its fifth trade this year. The $100 million trade matures in one month's time. The borrower's trades this year have all been in yen and two were through Mizuho, while Lehman Brothers did the other two. HSBC Bank USA is back in full swing and issued five short-term trades in US dollar. One for $1.10 million goes out 30 days, while the other four are for amounts between $190,000 and $500,000 and go out six months. GMAC International Finance closed a $45 million one-year note that pays interest quarterly. Oesterreichische Kontrollbank issued a $250 million non-syndicated trade via Nomura. The straight fixed rate note pays a coupon of 3% semi annually and is non-callable. Commonwealth Bank of Australia also closed two trades: a $18 million five-year note and a $10 million 10-year deal. The first pays a final coupon of 4.750% and both pay interest semi-annually.

Over $2 billion was raised in US dollar. Royal Bank of Scotland closed two trades in US dollar. One was non-call-three months trade for $20 million, with a Bermudan call option every three months thereafter. Salomon Smith Barney led the deal, which is due on October 24 and goes out to October 24 2003. It is a range accrual with a coupon capped at 4% and a target of 3.8%. Royal Bank of Scotland also closed an equity-linked note for $10 million via BNP Paribas and ABN Amro. The four-and-a-half year note pays a coupon linked to the performance of the Nasdaq100 and the S&P500, capped at 10%. Svensk Exportkredit closed a $600 million trade lead-managed by Nomura. The five-year syndicated note pays a final coupon of 4.625% and interest is paid annually. Oresundsbro Konsortiet issued a $20 million one-year FRN via Lehman Brothers. Interest is linked to 3m $Libor -13.5bp and is non-callable.

Eighteen trades were issued in US dollar and bank names dominated at the short end. Two financials and Jackson National Life Funding were the only non-bank names in dollar. Jackson National Life Funding closed a $75 million three-year and three-month note. Artesia Overseas issued a $12.15 million three year trade and BOATS Investments (Jersey) closed a $30 million deal that goes out two years and 10 months. At the short end HSBC Bank USA closed a $250,000 one-month trade and Credit Lyonnais Financial Products closed two $10 million four-month trades. One is due to be settled on November 5 and pays a final coupon of 18.360% and the other is due on November 12 and pays a final coupon of 19.050%. Both trades are reverse convertible and are linked to the Nasdaq100 QQQ. The mid-term was busy, in particular the three-year sector with seven trades. And the long-term was thinner on the ground, although Bank Nederlandse Gemeenten stuck its neck out with a 20-year $10 million note. The note is a 20-non-call-three and is callable every three years throughout the duration of the note. The coupon pays interest at 6.15% and the coupon is paid every three years on a compound basis. Morgan Stanley managed the deal.

* City of Montreal Amount: $54m (increased from $34m)

Austria EuroWeek understands that Austrian utility OMV has approached banks for a debt facility to fund its offer for Czech refinery and petrol station business Unipetrol when it is privatised.

The resurgence in activity continued this week as a host of borrowers sought to raise funds amid an improving bond market environment, while others lined up further supply. In dollars, primary global supply amounted to more than $19bn, including a $6bn five year benchmark from Fannie Mae that was launched on Monday. In the corporate sector, Honeywell International raised $1bn through a 10 year offering yesterday (Thursday), after BellSouth had launched a multi-tranche $2.75bn transaction on Monday.

Websters hosted its annual MTN conference in London yesterday, and September's attack on the World Trade Centre was a key topic. Panels chaired by Clifford Dammers and mtn-i's Mike Timms tackled the shifts in the MTN market after the tragedy and workshops led by BNP Paribas advised on funding strategies after the attack. Simon Hill, head of MTNs at Credit Suisse First Boston looked at opportunities in the private and structured market after the 11th. He says: "The dividing line is Libor. Minus Libor is very dependant on the structured market and that market is holding up after the attack. The Libor plus sector relies on the vanilla sector and for them it has not been so easy." But structures are not for everyone. Hill adds: "In Japan there is a market for tiny $1 million to $3 million trades. But if you are in that market you have to be able to turn those trades around quickly otherwise it is not economic." Peter Matza, senior manager, corporate finance at RWE, agrees. He says: "Corporates have to be careful of the trades they go into, especially now. I would love to go for some of the smaller trades but it is not economic. We do not have the time or necessary skills."

The financial sector was the only one that issued more than one trade in yen, on Friday. Abbey National announced its 71st yen note of the year: a ¥500 million ($4.12 million) 25-year trade that has a final coupon of 7%. BNP Paribas did five deals. They ranged from ¥100 million to ¥501.9 million and had terms ranging from four months to 24 years. Vorarlberger Landes- und Hypothekenbank did a ¥500 million 20-year trade via Nomura. The coupon is fixed for the first two years at 4.40%, then becomes a euro-yen capped power reverse dual currency (PRDC) note. It is callable annually after the first two years. And Pfandbriefstelle der Oesterreichischen Landes-Hypothekenbank did a ¥1 billion note that goes out to October 2016. Credit Lyonnais was the bookrunner, and the coupon is fixed at 3.5% for the first two years, when it then becomes a PRDC and callable annually. Nordic Investment Bank rejoined the yen market after a break of four months. The ¥1 billion trade goes out to November 2011 and is a reverse floating rate note. The biggest trade came from the automotive industry though. Toyota Motor Finance Netherlands announced a ¥10 billion trade that matures in October next year and pays 0.03%. Venantius announced a ¥1 billion deal. Nomura was the bookrunner, and the note is a Bermuda callable reverse dual currency trade. The first year has a coupon fixed at 4.90%, then it turns into the FX structure and has a coupon of 4.9% minus the 6m $Libor level. Kommunalbanken did a ¥500 million 20-year deal, and Venus International, the Mitsubishi Trust International-arranged conduit, did a ¥2.8 billion four-year trade.

A good mix of sizes and maturities made up yesterday's yen business. BNP Paribas was the busiest issuer for the second workday running. After its five trades on Friday it came back for seven yesterday. They were between ¥100 million ($820,000) and ¥8 billion in size, and the terms ranged from three months to 30 years. BOATS Investments (Jersey), the CSFB-arranged conduit, announced a ¥300 million three-year note. And Apollo Spires, from Merrill Lynch, did a ¥800 million two-year trade. The only other financial repackaged issuer was Earls, the Deutsche Bank-arranged conduit, with a ¥1 billion four-year trade. Canadian Wheat Board announced its 18th yen note of the year. It was a ¥500 million note that goes out to November 2011. Portugal Telecom made its debut in the yen market having signed its euro4 billion global MTN programme in December 1998. The trade was for ¥6 billion and matures in October next year. It is only the fourth time the issuer has come to the Euro-MTN market. KfW International Finance did two yen trades. Nomura was bookrunner for both. One was a ¥1 billion 20-year note. It has a fixed coupon of 3% for the first year then becomes a CMS-linked trade with Bermuda calls. The other was a ¥1.8 billion note, also with a fixed coupon of 3% for the first year, but then becomes a power reverse dual currency (PRDC) note with Bermuda calls. Kommunalbanken announced a ¥1 billion 25-year note via Daiwa SMBC Europe. It has a PRDC structure after an initial fixed coupon of 4.5%. And Rabobank Nederland did a ¥1 billion trade via JPMorgan that matures in November 2016. The CMS-linked structure gives a coupon linked to the 20-year minus the two-year rate, and is non-callable. Vorarlberger Landes- und Hypothekenbank did a ¥700 million trade via Tsubasa. It goes out to October 2021 and has a fixed coupon of 4% for one year then is a PRDC. The issuer also announced a ¥700 million note via Kokusai. It has the same term and the same structure, except it is a non-call-two and has fixed coupon of 4.1% for the first two years.

Yesterday was the busiest day in yen for some time, even including the stretch before September 11. But despite 53 trade announcements there was still very little activity below the single-A credit band. Triple-As did double the business of any other credit rating, with World Bank and International Finance Corp issuing most. World Bank announced three deals. They were for ¥2.6 billion ($21.44 million), which goes out to November 2031, for ¥1 billion, which goes out to March 2032,and for ¥1.3 billion, which matures in October 2016. International Finance Corp also did three deals, all thirty-year trades, two for ¥2 billion and one for ¥1.1 billion. Eksportfinans, another triple-A, did two trades. The first, for ¥500 million, was a 20-year note with a power reverse dual currency (PRDC) structure that kicks in after two years of a fixed coupon of 4.37%. It is Bermuda callable. The other is a ¥700 million note that was done via Salomon Smith Barney. It also has a PRDC structure after a fixed coupon of 4% for the first 23 months. DaimlerChrysler Co-ordination Centre made its ninth yen trade of 2001 with a ¥5 billion one-year deal. The group has made over 50 yen deals this year though. The note's bookrunner was Sanwa Bank and the coupon is fixed at 1%. Another issuer doing vanilla trades was Pfandbrief Bank International. It announced a ¥250 million note with Deutsche Bank as bookrunner. It is non-callable for the full five years of its tenor and the coupon is linked to the 3m ¥Libor rate. Republic of Austria made its ninth deal this year and its first of the year in yen. The ¥2 billion 20-year deal was led by Nomura and has a PRDC structure after a first-year fixed coupon of 3.5%. A number of financial repackaged issuers were getting involved. Angus, from Nomura, Apollo Spires, from Merrill Lynch, ARV International, from BNP Paribas and Eirles Two, from Deutsche Bank, were all issuing yen. LVMH - Moet Hennessy Louis Vuitton (Japan) KK did its second trade. It was a ¥2 billion note done via Salomon Smith Barney and goes out to March 2002. Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden did a ¥500 million trade and a ¥700 million trade. Both have tenors of 12 years.