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Last week's events are continuing to have a knock-on effect on the volumes of trades closed. US dollar was the currency of just three deals and the overall total was down to 43, the lowest number of trades closed in the past week. IBJ Australia Bank (IBJ), Merrill Lynch and Bayerische Landesbank were the only issuers in US dollar. IBJ closed a $50 million three-month note. Merrill Lynch closed a self-led $7.50 million note that goes out to 2004. And Balaba closed a six-year fixed-rate trade for $300 million that pays a final coupon of 5.375%. The note was led by Dresdner Kleinwort Wasserstein.

Thirteen trades were in US dollar, with investors keeping mainly to the triple- and double-A rated issuers. Bayerische Hypo- und Vereinsbank closed a $100 million vanilla floater out of its Singapore office. The two-year note pays 3m $Libor+2bp and was self-led. Triple-A rated Bank Nederlandse Gemeenten closed a $20 million capped floater via Mizuho. The 10-year note is capped at 7.5% throughout the 10 years and interest is based on $Libor+70bp. The issuer swaps this into Euribor. Bianca Ydema, at the issuer, says: "We did the same structure one week ago - it is possible it is the same investor looking for different issuers. The trade gives us a good level." Deutsche Bank also issued two 10-year deals off its Euro-MTN programme for $5 million and $10 million. Issuance of 10-year US dollar trades has increased during the second half of this year. A total of 266 trades have been issued this year in 10-year US dollar with June and July being the busiest months for this type of note. Mizuho is bookrunner of about one fifth of these notes. Most of these trades have been sold to triple-A and double-A rated issuers.

The market is still holding off on the short-term maturities in US dollar and only Unibanco - Uniao de Bancos Brasileiros closed a $1.5 million two-year trade. Three- to six-year tenors were definitely the flavour of the day. KfW International Finance closed a $150 million three-year floating rate note based on $Libor. The bookrunner was JPMorgan. Other issuers in this sector were BNP Paribas, SGA and Abbey National Treasury Services with $400,000, $2 million and $5 million notes respectively. Five issuers were in the five-year sector and the six-year sector saw four notes from two borrowers: a $3 million trade from BNP Paribas and two $30 million and one $20 million deals from UBS (Jersey). Royal Bank of Scotland closed a flipper. The $20 million note is a 10-year no-call-two and is floating rate for the first two years linked to $Libor. After two years, if it is not called, it becomes fixed rate at 7.25%. The note was self-lead by Royal Bank of Scotland Financial Markets.

* Federal Home Loan Banks Rating: Aaa/AAA

The high grade US bond market was revived this week with a small but significant number of deals from borrowers keen to help the market to its feet and take advantage of historic low short dated Treasury rates. By yesterday (Thursday), Walt Disney had issued a $1bn two part deal, Campbell Soup had come to market with a $300m seven year offering, IBM with a $1.5bn five year, GECC with a $2bn one year floating rate note and Canadian National Railways with a $600m offering of 10 and 30 year bonds.

In the four days of stock market trading in the US this week, $1.3tr has been sliced off market value as the Dow Jones Industrial Average declined by 13%. In the midst of the turmoil, swap spreads have plunged. By the close yesterday (Thursday), 10 year swap spreads had tightened by 14bp from levels seen at the opening bell on Monday to 71bp midmarket. Five year spreads had come in about 8bp to 83bp.

Issuers, bankers and investors this week struggled to get back to business following the devastation of last week. Liquidity seeped back by the day, and some cheer was provided by large, liquid issues from three of the market's top borrowers: Freddie Mac, the Inter-American Development Bank (IADB) and the World Bank.

The yen sector ended last week quite well considering the events earlier in the week. There were 30 trades announced on Friday, though they only amounted to just over $200 million-worth. The biggest transaction was a ¥3 billion ($24.96 million) seven-year trade by Cadbury Schweppes Finance. World Bank and New South Wales Treasury Corp (NSWT) both opted for ¥2 billion 20-year deals. World Bank's pays a final coupon of 3% and NSWT's pays a final coupon of 4.1%. NSWT also did a ¥600 million trade with the same tenor. Its final coupon is 4%. Kommunekredit announced a ¥500 million note that goes out to September 2021. Kommuninvest I Sverige did a ¥400 million trade that matures in September 2026. And KfW did two trades. Both were ¥1 billion notes that go out to October 2031. At least one had Mizuho as the bookrunner, and that one has an FX/capped currency-linked hybrid structure. Interest is 3.5% until February 2 2005, when the interest is linked to the US dollar/yen exchange rate and the note becomes callable annually. Sanwa International did its 80th yen note of 2001. It was a ¥200 million trade that goes out to September 2016. There were six other trades from Japanese issuers. Daiwa Securities SMBC Europe did two ¥500 million notes and one ¥1 billion trade. All have 15-year terms. Mitsubishi Cororation announced a ¥1.2 billion 10-year note. MMC International Finance did a ¥1 billion three-month trade, and Nomura Europe Finance did a ¥205.92 million trade that matures in January next year.

* Nomura Global Funding plc Guarantor: Nomura Securities Co Ltd

It's a bit up and down in the yen sector at the moment. Having appeared to pull through last week's drama without much effect, yesterday the number of deals dropped to one of the lowest numbers in the last two months. Just 16 trades were announced, and only one of them was for more than ¥3 billion ($25.58 million). Morgan Stanley Dean Witter Japan issued a note for ¥20 billion, which continues the borrower's run in big yen deals. It goes out to October 4 this year and pays a final coupon of 0.045%. Ricoh Finance Nederland announced the next biggest trade: a ¥3 billion one-year note. It pays a final coupon of 0.06%. Nippon Oil Finance did a ¥2 billion deal with a five-year tenor, and CDC IXIS Capital Markets announced a ¥1.4 billion 20-year note. It was a non-call three PRDC, with an additional trigger call that takes effect if the interest goes above a set limit. Hypo Alpe-Adria Bank announced a ¥600 million note. The bookrunner was Shinkin International, and the structure was a reverse floating-rate note. The first year has a fixed coupon of 2.5% and thereafter there is a step-up coupon minus 6m ¥Libor. Kommunalbanken did a ¥300 million trade via Mizuho. It matures in October 2026 and pays a final coupon of 4.5%. And Commerzbank International announced a ¥300.74 million note that matures in March next year and pays a final coupon of 9.6%.

The yen market has not suffered nearly as much as other areas since last Tuesday's terrorist attacks. Trades are still being done and yesterday saw some big deals go through. John Hancock Global Funding announced a ¥40 billion ($341.04 million) five-year trade that pays a final coupon of 2.8%. Nomura Global Funding did a syndicated ¥60 billion trade via Nomura International. Credit Suisse First Boston and UBS Warburg were the co-managers. It matures in October 2006 and pays an annual coupon of 0.8%. And Morgan Stanley Dean Witter (Cayman Islands) did a ¥83 billion transaction with a term of just two weeks. It pays a coupon of 0.45%. French issuers were back on top in terms of number if trades. Credit Agricole Indosuez di a ¥1 billion deal that goes out to October 2011. It has a fixed rate and a floating rate structure to its coupon. The fixed part pays 1.7%, and the floating rate part is linked to the 6m Libor rate. Louis Vuitton Moet Hennessy Japan did its debut trade. The ¥3 billion note goes out to March next year and was managed by HSBC. It pays a fixed rate of 0.16%. Olivier Seux says this should be the start of an active life for the new issuer. And BNP Paribas and CDC IXIX Capital Markets were also involved with deals ranging from ¥100 million to ¥500 million. Most of the maturity dates went past 2016. The one Dutch issuer, Nederlandse Waterschapsbank, announced a ¥1 billion 25-year trade. Nomura was the bookrunner and the note had a non-call two power reverse dual currency FX-linked structure.

Pirelli has renegotiated its purchase of Olivetti, the holding company which controls Telecom Italia, through a complex exchangeable bond. The Italian cable and tyre company sold a Eu1bn exchangeable to Bell, the investment vehicle controlled by Roberto Colannino, former chief executive of Olivetti and Telecom Italia. Pirelli gained control of Olivetti and Telecom Italia on July 30 when it bought 1.55bn shares from Bell at an 80% premium.