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Croatia Despite the caution exercised by most banks, Citibank took a bullish attitude late this week and launched the three month extension of the $400m one year term loan for the Republic of Croatia on Wednesday.

What percentage of your funding comes off your Euro-MTN programme? Peter Matza, international treasurer, cash and debt manager, Thames Water: "In the past year it would be something like 80%. About 25% of our trades were public and 75% were private. The amount of funding done off our Euro-MTN programme has grown substantially compared to previous years. Thames Water was taken over by the German company RWE last year and this will probably mean an integration of the capital market activities in favour of the parent company." Martha Oberndorfer, head of treasury, KommunalKredit Austria: "Last year 100% of KommunalKredit Austria's funding - both public deals and private placements - was achieved off our Euro-MTN programme. We expect very much the same for 2001: about 90% to 100%." Matthieu de Bergeyck, group treasurer, Carrefour: "Carrefour has a Euro-MTN programme of euro6 billion ($5.61 billion) and the total group funding is Ffr90 billion ($12.85 billion). At the moment we have almost $3.5 billion outstanding off the Euro-MTN programme, so this is about 25% of our funding. But a lot of this is public placements. Private placements account for euro310 million, which is about 8% or 9%." Klaas Springer, treasurer, Koninklijke Ahold: "Since Ahold signed its Euro-MTN programme, between 50% and 70% of its new debt has been raised off the programme. In terms of our overall debt portfolio, about 20% is made up of MTNs. In the future all our funding done in Europe will normally come off our MTN programme. But it does depend on acquisitions. If we acquire more European businesses we will use the programme extensively. If the acquisitions take place in the US we will use yankee funding." Elisabeth Teyssier, head of financial services, Rhodia: "One third of our funding is raised under our Euro-MTN programme, which we set up last year. Before that we used bank loans and our CP programme." What structures and maturities have you issued in the last 12 months? Oberndorfer: "Most of our maturities were in the three- to 15-year sector. In terms of structures we used CMS floaters, Bermudan callables and multi-tranches. In total we issued 12 trades between euro10 million and euro250 million." Matza: "Our private trades have been standard plain vanilla, one- to two-year FRNs, mainly in the US dollar sector. And in the public market we did a 32-year sterling trade." De Bergeyck: "All our deals have been plain vanilla structures. They are usually fixed-rate and always swapped back to floating rate and the currency swapped back to euro. Last year we issued deals in the one- to five-year sector and we also did one big euro10 billion 10-year deal in May 2000." Teyssier: "We have issued two trades: one five-year euro500 million note and one euro300 million two-year note. Both the deals were plain vanilla. The first was a fixed-rate note and the second was flexible rate." Do you think investors in the Euro-MTN market have become more credit-aware in the last year? Springer: "Yes, they have become wiser because of developments. What we have seen this year is enormous spread volatility. And investors have become very much more aware of that." Oberndorfer: "Definitely yes. Investors are treating credit-risk as a separate asset class. The importance of credit decisions became painfully evident in 2000 when investors lost money due to major downgrades in the utility and telecom sectors." Matza: "The answer to that would have to be yes, but it's difficult to say how significant. In general investors are more aware - they've been at the short end because they're aware of interest rate and credit exposure. Lots of short FRNs were issued and we needed to raise a lot of money and that was one way." Teyssier: "Yes they have become more credit-aware and they've also become more professional. This has made the benchmarking harder to achieve. The rating is very important and this is partly due to the strict rules on issuer rating inside many investment houses." De Bergeyck: "Yes, I think they do take more notice of credit, especially between double-A and single-A issuers. There are several reasons for this. One is the Basle statement that will change things in 2004. The automobile and telecom sectors have issued very large amounts in the past year and I think this has frightened dealers. It has also made them more aware of credit risk. It is bringing about more sector comparison like in the US market, which is more credit-driven by investors. You see it also in the short term, which is more expensive than last year. But we're double-A and so we're less affected. It's more expensive for us to issue 10-year notes than it was two years ago. If we issue the same maturities now, we lose between 15 and 20 basis points." Why do you think you were downgraded? Oberndorfer: "The reason was our shareholder structure. Our major shareholder is Investkredit Bank, which itself is made up of many shareholders most of which were downgraded: Bank Austria, RZB and Erste Bank for example. That's why our major shareholder needed to be downgraded from Aa3 to A1. We fell with them. But the outstanding quality of our assets, our earnings and our profits remain as strong as ever. We were only downgraded because our grandfather was, if you want." Springer: "It was because of our already high leverage combined with a move into the food service business in the States, which is perceived by the rating agencies as more cyclical and risky than pure retailing." Matza: "It was simply a deterioration in perceived credit quality. But after the take-over the agencies have put us on CreditWatch." De Bergeyck: "The reason is very simple. We did a share exchange with the company Promodes. That didn't logically mean that we needed to extend our borrowing needs. But Promodes took options in stakes in minority countries - in Belgium, Italy and Argentina. So due to the share exchange we inherited the debt. Before that we acquired Coutoure Modern for Ffr80 billion. That led to the situation of today. We're confident that the agencies are satisfied that we have the ability to generate cash. We did a lot of asset sales this year to help lower the gearing." How did you react to the rating agencies' decision? Oberndorfer: "We continued our policy of communicating with our bond-holders. We kept them informed about our fundamentals and our performance. We even went on some roadshows to Paris and Zurich. And the internet proved to be very good in letting us get our message across." Teyssier: "We were not surprised - it was a normal decision due to the acquisition that we made last year." Matza: "It pretty much met our expectations - it had an industry-wide impact." Springer: "We already had extensive discussions with the rating agencies before we received their final public statements. We have an intense relationship with them. We are trying to convince them that Ahold's move into the food service business is broadening our strategic scope. On the other hand, we have stated to them that we have not changed our financial policies. We are staying with a 50:50 debt-equity ratio. When we make an acquisition it is not usual for us to immediately launch an equity issue. We usually use debt. They have to give us time, but they prefer us to make an immediate equity issue for every acquisition we make." De Bergeyck: "Again, it's a very open dialogue and we have regular meetings, so we know exactly where we stand." How has the downgrade affected the cost of funding off your Euro-MTN programme? Oberndorfer: "The impact of our downgrading was only marginal because we had already been placed on negative outlook in February 1999. And any potential downgrade was priced in at that point." Matza: "That's always difficult to say precisely, because we don't know what our pricing would have been had we not been downgraded. I would say it has had a modestly negative impact on our credit spreads. But generally speaking, corporate credit spreads widened anyway last year, so there are lots of factors to take into account." Springer: "Of course it has been difficult to see because of the general spread widening that has happened in the market. When we are talking about five-year issues the downgrade cost us 10 to 20 basis points. It's significant, that's for sure. If you look at the US market the downgrade has given rise to a larger increase for our cost of funding. Spread widening was more pronounced in 2000 in the US than in Europe." Teyssier: "We are a newcomer in this market, so there has been no time to be affected by the downgrade from BBB+ to BBB. It is difficult to say precisely what effect the downgrade had on us because of the increase in spreads. It's difficult to know what is due to the downgrade and what is due to spreads increasing. Our spreads have increased, I would say by around 15 basis points. On the other hand we have made a good acquisition, so the balance is positive. We bought the American company Chirex in September 2000." De Bergeyck: "It hasn't." How have you gone about reassuring your investors? Teyssier: "We had a conference call with our bond investors when we published our annual results and we will also be having a roadshow for a potential new issue in the coming months. The date would depend on when we choose to issue our next bond off the Euro-MTN programme and on market conditions. We try to be transparent and give regular information to our investors, for example we send them regular press releases." Springer: "We already had very good investor relations regarding our equity side. But we now spend more time with our bond investors. We try to provide more information to them and spread the gospel of our financial policies. Bond investors require other information to equity investors. We have to tell them that even though we are acquisitive that does not imply we will throw away our credit worthiness for a nice target." Matza: "When we did our public issue we spoke directly to a couple of investors. But investors mainly rely on research done by dealers and underwriters. Our new parent company is very keen on maintaining good relations but this is not yet something it has taken into the market place." De Bergeyck: "We're a big company quoted on the Paris stock exchange. Our market cap is euro45 billion, so a lot of equities and bond investors do research into us. When we launch a credit facility or a big issue, we have some communication and we meet investors on a one-to-one basis." What is your strategy for the next 12 months? Springer: "We will continue to issue in euros and dollars. The rating agencies have given us a stable outlook, so they are not immediately contemplating an upgrade. But Ahold is an acquisitive company, and the moment an acquisition materializes an upgrade would become more likely because our ratios would improve across the board." Teyssier: "There is still room for new bonds off the Euro-MTN programme. We will issue in 2001 and we hope to be in the market once a year. We will probably issue in euro because it's our currency - our debt is in euro and the Euromarket is our domestic market. Eventually we could issue in sterling in longer maturities. But we probably won't go to the US market at all because it's too expensive. We have assets in the US - 23% of our sales are in the US, but for the time being it is much more expensive than the Euromarket." Oberndorfer: "In January we did three relatively short-dated trades. As soon as the upgrade is published, which the rating agencies have indicated could be between March and May 2001, we will tap the market with some longer-dated funding. We would like to raise some 10-year trades. We would expect, after the upgrade, to save around seven basis points in the 10-year sector." Matza: "I can't answer that question because it is subject to the integration process between Thames and RWE." De Bergeyck: "We intend to be opportunistic. We did some asset sales this year. Our debt maturities are not that long. We'll have some benchmark issues towards the end of the year, but we will do some short-end trades too, although that depends on conditions." What do you think is the greatest challenge the market has to face in 2001? Oberndorfer: "I guess it could be that credit will emerge as a new asset class, which will lead to a new approach to benchmarking. And there are a lot of regulatory problems to overcome, especially in the area of credit default swaps. The presentation of these structures within the International Accounting Standards framework will require a lot of work." Teyssier: "The decreasing interest rate. For investors it's more challenging, and it's less interesting for investors in the lower price range, so they have to use more risky structures with arbitrage opportunities. At least it will be good for the structured market." Matza: "Trying to lengthen the issue horizon. It's got to start moving out to a balanced profile. The short end is not that healthy because it has an increased refinancing risk. It will depend on the interest rate environment, but I don't see a huge move yet until the interest rates calm down." De Bergeyck: "Finding the best way to associate investors and issuers and to create a market place common for everybody. Also trying to find a link between short-term and benchmark issues. The problem is creating a platform. Banks are speaking about it, but for now it's in preliminary stages. This is the big thing for the market." Springer: "Bond investors aren't used to dealing with volatility. Managing spread volatility is the name of the game for bond investors. That's the real challenge. From my experience of running a bond portfolio, the market is very different from a few years ago."

The world and its capital markets have had three days to take in the terrible events that took place in New York, Washington and Pennsylvania. The tragedy left the civilised world feeling helpless and hopeless. For those in the capital markets, like everyone else, it was without doubt a day that they will never forget.

KPN has mandated eight banks to arrange a Eu2.5bn loan to provide the Dutch telecoms group with some headroom as it attempts to stave off a full restructuring of its debt through an asset disposal programme. Terms and conditions on the deal are scant at this stage, with a margin thought to start at 200bp before ratcheting between a floor of 100bp and a ceiling around 350bp.

Lebanon * Republic of Lebanon

The mood among the emerging market banking community in London this week was one of grim determination. Bankers were keen to emphasise that they would not to be bowed by the toughest week of their lives, but would push on with the autumn workload as best they could. Despite this, new issuance was inevitably postponed in the wake of Wednesday's market closure and the subsequent unwillingness of market participants to make or take sizeable orders until all market players are ready to participate again.

Energie Beheer Nederland has overhauled its Euro-MTN programme by redenominating it from $2 billion to euro2 billion ($1.81 billion) and replacing Credit Suisse First Boston as arranger with ABN Amro. ING Barings/BBL and Rabobank have been added to the dealer panel and Goldman Sachs, Merrill Lynch and Morgan Stanley have been dropped. The issuer has made just one trade so far this year - a ¥1 billion ($8.42 million) currency-linked note.

* BES Finance Ltd Guarantor: Banco Espirito Santo e Comercial de Lisboa SA

Outstandings in Euro-CP topped £

Caisse Nationale Des Caisses d'Epargne et de Prevoyance Financial institution Programme: euro10 billion Euro-MTN facility Signed: September 2000 Moody's programme rating: Aa2 Caisse Nationale Des Caisses d'Epargne et de Prevoyance (CNCEP) signed its euro10 billion ($8.49 billion) Euro-MTN programme in September 2000. The issuer is one of France's largest financial institutions and is the group head of 34 government-owned savings banks. Although CNCEP is a relative newcomer to the market it has already issued 37 deals with total outstandings of almost $3.5 billion. But CNCEP is no stranger to the Euromarket. It also has a Euro-CP programme and a history of retail and public bond issuance and loans. Cyril Bonnet, in CNCEP's capital markets department, says: "Every debt instrument we have helps to enlarge the spectrum of CNCEP. But the MTN shelf allows us the flexibility to reach more investors with small deals." Moody's and Standard & Poor's rate the issuer Aa2 and AA respectively. And it is in good company. Abbey National, Credit Agricole Indosuez and Svensk Exportkredit all have similar ratings. CNCEP ranks fourth in a league table of Aa2 issuers for volume of debt issued this year. Bonnet says: "We consider every double-A European financial institution as a serious competitor. So far CNCEP's signature has not been widespread in geographical terms. As a result investors are still very light with our credit risk, which gives them more ability to buy our EMTNs. This gives CNCEP some competitive edge vis Ó vis other European financial institutions. Furthermore our issuing policy is to offer permanent availability and flexibility." CNCEP issued nine MTNs in euro, US dollar and Swiss franc before it had even issued its benchmark trade on January 31 2001. Since then it has gone on to issue in yen and has been successful in marketing its name to dealers and investors. Bonnet says: "As a first step, we used a euro750 million seven-year inaugural public deal and did a large roadshow throughout Europe in January where we visited 11 countries and financial centres. We have had over the last months a large number of one-to-one presentations with investors and dealers to introduce CNCEP's strategy and business policy." He adds: "Our strategic target is to diversify our investor base, especially abroad and to grow CNCEP debt instrument holdings in bank and insurance investment portfolios and funds. The main motive is to gain name recognition." And CNCEP is keeping up with other names that have more experience in the market. It takes fourth place in a league table of private debt issued by French issuers from January 1 to June 7 2001, according to MTNWeek criteria. SG, Credit Lyonnais and Caisse des Depots et Consignations took the first three places. But Bonnet says: "With the euro, we all have to think European and therefore discrepancies between issuers from various countries should progressively vanish across a given economic sector." The borrower has issued in a range of structures, including equity-linked and interest rate-linked notes, and maturities between one and 15 years. Bonnet says: "We want to be very flexible but at present CNCEP does not issue notes that do not offer a guaranty on principal. We do not issue credit-linked notes either and we avoid any structure that can provide a risk linked to our name at redemption time. Nevertheless this is not definitely enshrined in our funding policy rules. Keep in mind we are still in the first year of the programme." He adds: "We are very happy with our first steps in the EMTN market. It has given us the opportunity to act in line with what we told the market. Most important for us is to gain name recognition and diversify the investor base that buys CNCEP debt instruments." Danone Finance Food producer Programme: euro3 billion Euro-MTN facility Signed: July 1996 Moody's programme rating: A1 Group Danone, a leading manufacturer of dairy products, biscuits and mineral water, came to the Euro-MTN market in 1996 at a time when only seven French corporates were part of the MTN market. It signed its euro3 billion Euro-MTN facility via its financial arm Danone Finance (Danone) and CSFB arranged the programme. Danone has $1.34 billion outstanding off 25 trades, according to MTNWare. It does not have a CP facility, but is regularly in the bond market and has $2.76 billion outstanding off standalone public issues and also off one private placement in the Euromarket. It has also issued two foreign-market public deals, according to Bondware. All the bonds are FRNs or FX-linked. Five years have passed since it signed its MTN shelf and there are now 25 French corporate issuers in the market, five of which signed their programmes last year. But Gerard Soularue, chairman for the French Association of Corporate Treasurers (FACT), and also Danone's treasury director, does not see this as part of a rush to the market. He thinks few other French corporates will sign in the future. He says: "I am not sure whether the number of French corporates in the market will increase much more. Although it is easy to move from CP to MTNs, the MTN market is really a place for the biggest companies, and they already have programmes." Danone does not rely as heavily on its MTN programme for funding as other French corporates do. But Soularue has witnessed many French corporate treasuries becoming more reliant on their MTN programmes for funds. He says: "If you look at the balance sheet of the largest French groups you will see that 90% of their funds come from MTNs. Part comes from Euro-CP and part comes from standalone bonds. MTNs fall in between these two and they are a very friendly way of financing companies on a daily basis with the sizes you want." Danone is rated A1 by Moody's. Standard & Poor's gives Danone a long-term rating of A+, after it downgraded the issuer from AA- in March 2000. But Soularue believes that ratings are still the key factor for investors. He says: "Name recognition was a valuable selling point a few years ago, but I'm not sure it's the case now. My discussions with other treasurers suggest that investors are now buying ratings more than names. But the way investors think is very interesting. A few years ago dealers were saying that investors chose issuers by the industry they were in." He adds: "The good thing about this market is that once you have set up your programme, visited your dealers and told them what you want, it is very easy to issue. You don't even need a roadshow; you can say 'I have this rating' and that's it." Danone has issued 44 trades off the programme. Over half of these were plain vanilla and some were interest rate-linked. Morgan Stanley, one of the leading structure houses, has managed nine trades for Danone since it set up its programme, according to MTNWare. Although Danone is not averse to issuing structures, it is not a priority for Soularue's treasury team. He says: "Issuers are not interested in structures. I don't care what goes on behind the scenes, it's what I will have after the swap that is important. We want to issue an amount at a cost." Region Ile de France Local authority Programme: euro1 billion Euro-MTN facility, Signed: May 2001 Moody's rating: Aaa Region Ile de France is the most recent French issuer to join the Euro-MTN market. It signed its euro1 billion Euro-MTN programme on May 4 2001 and is the seventh local authority to sign a Euro-MTN programme since the beginning of 2000. It joins an elite sector of triple-A rated local government borrowers and this will make it attractive to Japanese investors, particularly if Ile de France is prepared to issue structured trades. Kommunalbanken, the Norwegian local government funding agency, is the only other local authority borrower to have a triple-A rating from Moody's and has been one of the most successful new borrowers of the past year. Ile de France's signing was well planned and the issuer was keen to establish its name in the market, even before the document was signed. Andre Autrand is Ile de France's CFO and he sees the triple-A rating as a great advantage in selling the name to investors. He says: "Investors must share risk in different types of issuer and there are not that many triple-A-rated local authorities, so they will be very fond of our bonds. We can usually sell our bonds in a very short time." Ile de France has issued several times in the Euromarket before, with six public deals in the domestic market and the Euromarket. It also issued a Lfr2 billion ($42.1 million) private trade and its total debt outstanding off standalone bonds is over $1 billion, maturing between 2003 and 2010. Autrand explains why Ile de France has taken the step of setting up a programme. He says: "We wanted to set up one document once and for all and use it for as many funding operations as possible to cut the fixed cost of bond issues. And in particular it is a way to reduce legal fees." But despite its confidence, Ile de France is not rushing into the market. It will keep investors and dealers waiting until this autumn for its inaugural trade, which will be a public bond of roughly euro100 million. The lead-managers are yet to be appointed. And the borrower intends to keep investors informed by presenting a transparent treasury operation. Autrand says: "We will communicate with investors using different media. One will be a Bloomberg roadshow and we will also give investors visibility for the future. Our funding needs are well defined on an annual basis up until 2006." Ile de France does not intend to raise a huge amount of debt in its first year in the market. Autrand says that the target for 2001 is euro240 million, including the benchmark trade, due this autumn. Over the next three years it expects to raise roughly euro1 billion. But it is likely that Ile de France's borrowing needs will increase as France decentralizes the government of its infrastructure, education and public services. The French government will transfer greater responsibility to its local authorities, leaving them with bigger budgets to manage. Autrand says: "There is a debate in France at the moment about a new movement towards decentralization. So we will receive new responsibilities in the near future and this will increase our budget and, should new investments be involved, it will increase our borrowing needs." Region Ile de France is putting a lot of faith in its MTN programme and promises to be a regular name in the market. Autrand says: "The MTN programme is going to be a very important instrument and may be used for the majority of our funding. Our outstanding debt off bond issuance is 70% of our total debt and in future this will be off the MTN programme."

Fergus Kiely Head of FRNs (syndicate) and Euro-MTNs HSBC Fergus Kiely could nearly qualify as a Euro-MTN veteran at this stage as he has clocked up seven year's experience in the market and transformed HSBC's Euro-MTN desk in the process. And since the beginning of this year, he has taken on responsibility for FRNs (syndicate) too. Kiely joined HSBC in March 1997 when he moved from its British rival Greenwich NatWest (NatWest). At NatWest he spent three years working in MTNs for Ken Baugh who now works for Banc One on the issuing side. Kiely originally joined NatWest in 1989 when he worked as an asset manager in its start-up operation, leasing and asset finance before moving into capital markets. In less than a year of joining HSBC's MTN desk, his boss, Keith Phair, resigned and Kiely became head of the desk as well as sole member of HSBC's Euro-MTN team. He has since built up a team of five dedicated MTN staff along with other indirect reporting lines from sales people in Asia and Europe. Kiely says: "The biggest challenge has been building the band. The key to a successful desk is the staff and it's vital to get the right mix of people. It was a big change to go from doing it all myself to expanding the business and working as a team." New additions to Kiely's team include a Japanese hire who will join the London desk shortly and liaise with the 10 dedicated MTN sales people HSBC has in its Tokyo office. Another new hire will join in Germany and one more in London. Kiely will also take on a new hire based in HSBC/Credit Commercial de France's Paris office, following the merger of the two houses last April. The international expansion in the team reflects Kiely's strategy for HSBC's Euro-MTN business. As desk head over the last three years, Kiely has pushed to build the international Euro-MTN distribution capabilities of HSBC. In 2000, HSBC ranked joint seventh in the league table of programme arrangers, according to MTNWare. The table rankings are based on number of debt programmes - excluding financial repackaged facilities - signed between January 1 and December 31, 2000, grouping banks and their subsidiaries together. Although not top of the list, Kiely argues that HSBC's distribution capabilities are global and growing, allowing the bank to compete globally with top tier Euro-MTN houses. "In theory any house can act as an arranger on a programme as this is a legal process. What it's really about is distribution. Often issuers are disappointed with dealers or arrangers they appoint in servicing them going forward. In the past we have not actively gone for programme arrangerships but have instead concentrated on the distribution side of the business. Now we are competent in placement we will focus on winning mandates from our customers to arrange their programmes," says Kiely. Kiely's goals for the year ahead centre on developing a well-cemented team and building HSBC's Euro-MTN distribution capabilities. But he insists he wants to retain the human touch that a one-man Euro-MTN business can cultivate and which is not always present in larger operations. "We believe in e-commerce and the importance of technology. But we also place a high importance on the personal touch. Issuers and investors value the human touch and we will continue to provide that interaction." Nabil Aboulzelof Director and head of structured products Barclays Capital As one of the smaller houses in the Euro-MTN market, Barclays Capital has a niche European market, particularly strong in its domestic UK client base, and competes in a focused approach against the bigger powerhouses. Nabil Aboulzelof has been head of the MTN desk in London since August 2000 and has already doubled the size of the desk and aims to make his mark in 2001. The biggest challenge for Aboulzelof since taking up his position at Barclays has been the spread widening that's taken place in public and private markets, especially in the telecom and auto sectors. This has made it more difficult to grab the attention of investors and sales people with ideas to place different credits or structures. This stems from the oversupply of paper in the markets. Aboulzelof says January this year saw a supply of euro84 billion ($78.57 billion), smashing the previous record of euro53 billion in June last year. It leaves investors spoilt for spreads and creates tougher markets for dealers with a variety of credits to satisfy. But Aboulzelof says this is part and parcel of the mature Euro-MTN market as it is now. One of his goals for the desk in 2001 is to boost the volume of trades done off the desk as well as balance the structured deals. "You've got to make sure you're maintaining volume on the desk. It's important not to lose sight of that because then you see where demand is going. The more vanilla you place the more you find out about demand," he says. Aboulzelof comes from a background in structures. He started his city career when he completed his degrees in mechanical engineering with business and finance at University College London and London School of Economics. He then did a four-and-a-half year stint at SG in London, where he worked in the structured products group and sales divisions, before moving to ABN Amro (ABN). He spent two years in ABN's London and Amsterdam offices doing structures and Euro-MTNs. When asked what he sees as the ingredients to a successful Euro-MTN desk, Aboulzelof is careful to look beyond his background in structures. He says: "A successful desk manages both volume and relationships. You have to make money. You can't just focus on individual structured deals. It's a marriage between volume and profitability." Aboulzelof has three others in his Euro-MTN team. He markets the Euro-MTN product as a funding platform that can satisfy all of an issuer's funding requirements. And he believes there is a growing acceptance among issuers of the importance of the Euro-MTN programme as a funding solution. He sees a closer correlation between banks that do Euro-MTN deals for issuers and banks that win bigger mandates on the back of it. "Issuers are more aware of which dealers are doing private deals for them. And it's those dealers that issuers tend to invite to pitch for public deals. MTN deals open a door into public issues," he says. That said, the focus for Barclays' Euro-MTN desk under Aboulzelof will remain firmly on strategic European clients with whom the bank has existing business relationships. Aboulzelof is keen not to spread the Euro-MTN desk too thin so as to maintain a high level of personal service with core clients. He believes the Euro-MTN market is a series of pockets of demand from specific investors and therefore has enough niches to allow big powerhouses and smaller more focused houses to compete. He says Barclays cultivates its niche business by being able to tap into these pockets of demand and respond quickly to investors. With this in mind, Aboulzelof does not see the various mergers and subsequent emergence of large MTN houses as a threat. "Big powerhouses bring benefit to smaller houses. When two merge they don't necessarily get twice the coverage. Other banks can pick up some of the business," he says. Frank Toulouze Director, primary and structured finance Mizuho Financial Group Frank Toulouze works on Mizuho's primary and structured finance desk. He joined the bank last April, when it was still known as Industrial Bank of Japan (IBJ). Five months later, on September 29 2000, IBJ completed its merger with Fuji Bank and Dai-Ichi Kangyo Bank to form Mizuho Financial Group, the biggest bank in the world in terms of assets. It now has a balance sheet of $1.3 trillion. Toulouze says: "When I left Salomon for IBJ it was a clear understanding that the merger was on its way, so it wasn't a surprise for me." Before he joined IBJ Toulouze worked in debt capital markets at Salomon Smith Barney. He started working for the group in 1990, when he joined Citibank's fixed income sector in Paris as assets manager. After two years Toulouze moved to London, but stayed with Citibank until last year, when the world of structures lured him away from the debt capital markets team. Toulouze says: "I wanted to move to a much more structure-intensive business, such as IBJ's Japan-oriented MTN desk, compared with the vanilla business I was involved in at Citibank and SSB, so the move made sense." And structures remains his area of expertise. Mizuho's forte is definitely its structured business into Japan. And although the Euro-MTN market has been seeing fewer structured trades this year Mizuho is going strong. Toulouze says: "The structured business is still good, as far as Mizuho is concerned. We know who buys the structured paper in Japan, especially. The investors are generally liquid and we know them very well, so we think this kind of structured business will continue to be strong in future." This confidence is a sign of Mizuho's close working relationship with its investors in Japan. The bank's Tokyo operation has 124 sales staff who work with the investors, who are mainly small investment houses. But Mizuho has also been involved in large deals that show it has the capability of any of its American and European competitors. Toulouze says: "We've done some significant deals for corporates in the private market. For example, last year we were in a position to raise ¥145 billion ($1.5 billion at the time) for Unilever in 48 hours. Of course, most of our corporate deals are a lot smaller." He now oversees the Czech Republic, the Slovac Republic, France and Holland and his responsibilities cover corporate issuers, financial institutions and supranational issuers. Although the primary and structures finance desk covers various issuance in the international market, the bulk of its business is Euro-MTNs and the majority of these are in yen. But Japanese investors are known for their conservative attitude to credit and one challenging aspect of Toulouze's role is encouraging the investors to consider credits apart from triple-As. He says: "The Japanese market is not that open to credit corporates. Japanese investors are still very much credit-risk adverse and it takes time to educate them." Toulouze believes that this situation will not change overnight, but over the next few years the market may see more Japanese investors looking lower down the credit curve. He says: "Over the next few years I think that the credit awareness of Japanese investors will open more and more. There will be a gradual trend towards more enquiry for single-A and sometimes triple-B names, including corporates. At the moment most of the structured trades are with higher-grade issuers, but I think this will change slowly in the next few years. I also think there will be more samurai bond issues from international corporates - there is a huge pool of liquidity here."

European bourses were due to observe a three minute silence at 1.45pm BST today (Friday) as a mark of respect for the appalling tragedy in the US. The decision from the major European exchanges came after an announcement from the Council of the EU that today would be a "European day of mourning".