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Issuers of European covered bonds this week took advantage of investors hunting for top quality credits, with bond and equity markets although better, remaining on the defensive. Several borrowers had been lining up offerings before the US attacks took place, but many projects were put on hold in the wake of those events and have only now been resurrected.

Chile successfully launched a $650m 10 year global bond this week, raising modest hopes among bankers desperate for mandates that other Latin issuers may be enticed into tapping the new issue market.

There has been little investment into Central Asia beyond EBRD credit lines for infrastructure and related projects. But for those international banks that have lent to the countries bordering Afghanistan, the escalating tension in the area has become a concern. Of the five countries, the Islamic Republic of Pakistan has enjoyed the most foreign investment and, along with Iran, is rated.

Who wants to be an investment banker at Credit Suisse First Boston? Don't all hold up your hands at once! Time was when CSFB bankers criss-crossed the glove and walked tall beside their counterparts at Goldman Sachs and Morgan Stanley. Since then, some of the gloss has come off CSFB's image and today we would be hard pressed to name half a dozen CSFB investment banking rain makers. We had hoped the arrival from Lazards of John Nelson, considered by many to be the best deal maker in the UK, would open the floodgates and lead to a wave of household name hirings. However, nothing happened. The great Mr Nelson seemed to have lost his appetite for closing deals, preferring to concentrate on broader issues. There were no dawn raids on Lazards' best young bankers and Nelson's much trumpeted arrival turned out to be as exciting as watching paint dry. That left Frank Quattrone to hog the CSFB investment banking limelight, which he did for two years until his product turned from gold into lead.

Railtrack's convertible bondholders were working out what to do with their investment this week following the collapse of Railtrack. With the government placing Railtrack in administration, convertible bondholders have almost certainly lost any hope of equity upside. But although the bondholders are likely to be regarded as pari passu with other Railtrack creditors, it is possible that they could seek reimbursement for their lost equity options.

Swap spreads were compressed early this week in anticipation of a further unplanned auction from the Treasury - this time of $6bn five year notes. The possibility of new supply pushed Treasury yields higher, compressing swap spreads. However, the Treasury did not auction five year notes after all and dollar swap spreads recaptured a bid. The lack of new issuance and sell-off in the market pushed spreads off lows. By yesterday's close (Thursday) the five year mid-market was 75.5bp and the 10 year was 72bp. Mid-week these two markets were at 71bp and 68.5bp, respectively.

Bulgaria The Eu10m EIB guarantee facility for the First Investment Bank will be signed by power of attorney next week.

Chile * Republic of Chile

* Achmea Hypotheekbank NV Amount: Eu50m (increase to Eu200m issue launched 03/10/01; fungible with Eu500m issue launched 04/05/01)

* CIF Euromortgage Rating: Aaa/AAA (Moody's/Fitch)

* Caisse de Refinancement Hipotécaire Rating: AAA

Euro volume remained low yesterday, with no trades going out beyond euro50 million ($45.65 million). Abbey National Treasury Services closed a one-year euro50 million MTN that pays interest quarterly. Goldman Sachs lead-managed the trade. Also closing for euro50 million was BBVA Capital Funding. Its note has a 15-year tenor and pays interest quarterly. Fellow Spanish issuer, Banesto Issuances, concluded a five-year euro30 million MTN that pays interest on an annual basis. The note carries a final coupon of 4.500%. SPV, Atlanteo Capital, kept up its busy issuance of late with two trades. It closed a euro3.11 million note that has a final coupon of 5.000%. The note matures on September 30 2003. It also traded a euro2.12 million note that carries a final coupon of 5.445%. The note goes out to October 31 2041. Another SPV, Trident Securities, also looked for maturity. It closed a euro2.80 million MTN that reaches out to September 19 2041. Landwirtschaftliche Rentenbank is set to issue a five-year euro19 million MTN. The note pays interest on a semi-annual basis and carries a final coupon of 3.83%. Deutsche Bank was the principal paying agent. HSBC (Netherlands) closed the shortest-dated trade - a euro20 million note that matures on December 6 of this year. And Svensk Exportkredit concluded a euro5 million MTN that matures on January 6 2010.