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Dollar swap spreads climbed from their lows this week. At yesterday's (Thursday's) close, the 10 year mid-market was 84.75bp over the new 5% August 2011 Treasury and the five year mid-market was 77.5bp over the 4.625% May 2006 Treasury. Spreads oscillated alongside the Treasury market for much of the week, but the swap market was given an unexpected paying impetus late yesterday by a large sale of agency securities. A hedge fund was reported to be selling up to several billions of dollars of agency positions, and the buyers of these assets hedged by paying into the swap market. There is a very high degree of correlation between agencies and swaps, and the latter is often used as hedge for the former.

Diversified European Credit has increased the debt ceiling off its Euro-MTN programme. The shelf's original debt limit was euro2 billion ($1.83 billion) and this has now been upped to euro5 billion. The programme was signed without an arranger or dealer panel in July last year and since then 17 trades have been issued under it. All are still outstanding and the volume is $598.80 million.

Deutsche Telekom (DT) was involved this week in a desperate attempt to salvage its credibility following the collapse in its share price after Deutsche Bank sold Eu1.04bn of DT stock last week. DT's share price has dived by 25% in the week and a half following the sale. The fall in DT's share price was caused by the sale of a block Deutsche Bank sold on behalf of an affiliate of Hutchison Whampoa, which took a major stake in DT in return for the sale of the US wireless unit VoiceStream earlier this year. But with much more DT stock remaining in the market following this acquisition it is likely that the share price will remain depressed.

Croatia Mandated arrangers Bank Austria, Bank of Tokyo-Mitsubishi, BayernLB and Erste Bank have signed banks into the Eu45m deal for Hrvatska Elektroprivreda (HEP).

Colombia * Republic of Colombia

* Bayerische Landesbank Girozentrale Rating: Aaa/AAA/AAA

* Bank Nederlandse Gemeenten NV Rating: Aaa/AAA/AAA

Dutch issuers only issued two notes in euro but they accounted for just over 40% of the volume announced in the currency on Friday. ABN Amro issued a euro15 million ($13.40 million) trade that matures in two years. It pays a final coupon of 5%. And SNS Bank Nederland did a euro100 million three-year trade that pays 6.375%. France was again the busiest issuing country with five trades, but they only came to $37.2 million. Societe Generale Acceptance did a euro10 million and a euro20 million trade. The former matures in October 2003, the latter in August 2011. Caisse Centrale du Credit Imobilier de France also issued twice. Both are for euro5 million and mature in three years. Banca di Roma (London) did its fourth and fifth trades of 2001. Both were sized at euro5 million but one goes to August 2006 and the other to August 2009.

Atlanteo Capital, the conduit run by Banco Bilbao Vizcaya Argentaria, did a 39-year trade on Monday, its third note of around that maturity in less than a month. It issued two 40-year trades just prior to this one. The euro37.26 million ($33.36 million) note pays a single coupon. The longest trade apart from Atlanteo Capital's had a tenor of six years. Diversified European Credit issued a six-year euro100 million note, and European Credit (Luxembourg) issued a euro150 million note of the same length. The latter issuer also announced two other trades, for euro15 million that goes out to May next year, and for euro5 million that goes out to August 2004. The day's biggest trade came from Landesbank Sachsen. It announced a euro250 million note that goes out to February 2003. Fellow German issuer Westfalische Hypothekenbank was also involved, making its 28th contribution to the market this year with a euro100 million trade. It matures in August 2003. BNP Paribas, HSBC Investment Bank and NIB Capital Bank made up the rest of the announced trades, with euro3 million, euro20 million and euro12 million trades that respectively have terms of three years, two months and two years.

The European holiday yesterday will have dampened activity slightly, but there were still nine trades announced, one of which, from Bank Nederlandse Gemeenten, was for euro500 million ($447.67 million). The trade was unsyndicated however and matures in five year's time. The others were quite small in comparison. Bayerische Landesbank did a euro10 million three-year deal that pays 2.5%. Merrill Lynch followed suit in terms of size, but their three euro10 million notes go out to August 2008. Cassa Di Risparmio di Firenze announced a euro63.53 million note that matures in September 2006. BNP Paribas was the bookrunner. It is the issuer's fourth note this year, all of which have been denominated in euro and all of which have been led by BNP Paribas, the arranger of the programme. Credit LyonnaisFinance (Guernsey) announced two trades. One, for euro7.6 million and one for euro1.5 million. Both mature in August next year. And Development Bank of Singapore did the smallest euro note of the day. It was a euro900,000 four-year trade.

Only seven trades were announced in euro yesterday, possibly due to the upcoming holiday, but there were a couple of reasonable sizes. Credit Lyonnais did a euro250 million ($223.83 million) three-year note via Salomon Smith Barney. It matures in August 2004. And FCE Bank did a euro175 million trade via Banca d'Intermediazione Mobiliare that goes to March 2005. Its coupon is Euribor+37.5 basis points. But apart from these two and France Telecom's euro100 million two-year note, none of the other trades was for more than euro20 million. HSBC Bank and Societe Generale Acceptance both went for notes of this size. HSBC's had a term of just two months, but SGA's goes out to December 2009. Abbey National Treasury Services announced a euro10.95 million note that it issued through Salomon Smith Barney. It has a term of three years. And St Michael Finance did the smallest note of the day: a euro9 million one-year trade that pays a final coupon of 4.205%.

France Télécom (FT) dominated talk in the telecoms sector this week after Moody's revised the outlook on its A3 rating late on Monday from stable to negative, fuelling expectation that the French operator could lose its single-A status. Analysts were not surprised by the news, but they found the timing strange. "While a stable outlook clearly did not make sense any more," said one, "there have not been any new developments to prompt Moody's to take action at this time."