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Europaische Hypothekenbank (Eurohypo) set up a euro5 billion ($4.41 billion) debt issuance programme on July 27. Deutsche Bank is the arranger. Reinolf Dibus is Eurohypo's managing director. He explains why there was a need to set the programme up. He says: "We are frequent issuers in the covered bond market, but we had some problems with documentation. This programme will give us flexibility and a cost-efficient way of issuing." Eurohypo, based in Luxembourg, is a frequent issuer of jumbo bonds as well as lettres de gage and the programme will be used for deals under euro500 million. Dibus says: "The programme will not be just for opportunistic funding. Our main currencies will be US dollar, Swiss franc and euro. But all jumbo bonds will be issued as standalone bonds." Dibus considers jumbo bonds to be those over euro500 million, with a minimum maturity of three years and at least three joint-lead managers. The borrower has not decided on its first trade yet, but Dibus says: "We will issue off the programme in the next few weeks, but it will not be a very big trade - certainly less than euro500 million." It will not be Eurohypo's first time in the MTN market. The bank set up a Euro-MTN programme in 1991, denominated in ecu. This programme remains dormant. Eurohypo's Dublin branch also has a euro1.5 billion Euro-CP programme signed in 1998 and arranged by Deutsche Bank. The borrower has already been to meet investors on a roadshow in May and will not be roadshowing again in the near future. Dibus says: "We have not planned a roadshow especially for this programme, but we went on a big roadshow in May around Asia, Europe and the US. The roadshow was to market our US dollar jumbo project, but we also spoke to investors about the debt issuance programme." The dealer panel is ABN Amro, Barclays Capital, CDC IXIS Capital Markets, Deutsche Bank, Dresdner Kleinwort Wasserstein, JPMorgan, Morgan Stanley, SG and UBS Warburg.

It was a busy day for the euro in the MTN market as euro587.11million ($516.99 million) was traded off twenty notes. Fortis Ifico was the busiest issuer, as it concluded three euro trades - for euro3 million, euro10 million and euro22.50 million. All the notes are issued on August 22 and have a tenor of five years. HSBC (Netherlands) was busy with two euro20 million trades that are issued on August 6. Both notes come at the short-end, maturing in just over a month. FSA Global Funding concluded the longest-dated trade - a euro127 million note that reaches out to June 29 2015. Salomon Smith Barney acts as the bookrunner off the trade. Salomon Smith Barney also placed a trade for Banque et Caisse d'Epargne de L'Etat Luxembourg. The euro3.45 million MTN matures in one year. Westland Utrecht/Hypotheekbank teamed up with one of its most frequent bookrunner's, ABN Amro, on a two-year euro21 million trade. The note has a zero interest payment frequency. AIG SunAmerica Institutional Funding concluded a seven-year euro70 million note that pays interest singularly. The trade comes in the week that the issuer announced it has increased the limit off its note issuance programme from $15 billion to $25 billion. In addition, Merrill Lynch has replaced BNP Paribas as the arranger and dealer off the programme.

* Abbey National Treasury Services plc Guarantor: Abbey National plc

Euro volume was dominated by one issuer yesterday - GMAC International Finance (GMAC). GMAC traded two euro250 million ($219.67 million) notes. One is a two-year note to be issued on August 13. The second trade is a three-year note issued on August 16. Both notes pay interest quarterly. The next highest volume trade was a euro50 million MTN issued by Dexia Credit Local de France. The note has a zero interest payment frequency and reaches out for ten years. HSBC Investment Bank (Netherlands) issued at the short-end with a euro20 million note that matures on September 14 of this year. Credit Lyonnais Finance (Guernsey) came to the market with two eight-year euro5 million notes. The notes take the issuer's euro trades to seven for this year, accounting for a 55.06% share of its volume traded. Deutsche Bank issued the smallest trade - a euro3.70 million note that is to be issued on August 9. The note pays interest quarterly and matures on May 9 2006.

Friday was dominated by small and short-dated euro trades. Of the 11 notes traded, nine had a tenor of five years and under. Credit Lyonnais Finance traded the smallest note of the day - a one-year euro2.5 million ($2.19 million) note that pays interest singularly. Credit Agricole Indosuez traded a euro3.5 million MTN with a tenor of just nine months. The only trade over six years was Atlanteo Capital's euro36.60 million MTN which is to be issued on August 3 and matures on December 30 2015. The note pays interest singularly and has a final coupon of 1.000%. BNP Paribas issued two euro notes for euro3 million and euro30 million. The smaller note pays interest annually and has a final coupon of 7.000%. It matures on July 16 2004. The one-year euro30 million issue pays interest quarterly.

Just a few issuers dominated euro trades yesterday. UBS Warburg (Jersey) was particularly active issuing eight trades. Each was a euro10 million ($8.82 million) note that has a zero interest payment frequency. All the notes are issued on August 20 and have a tenor of five years. Deutsche Bank came to the market with three trades for euro5.75 million, euro6.50 million and euro7 million. All the notes mature in five years. Zenith Investments issued a euro19.56 million and a euro35.60 million note. The smaller two-year note is issued on August 29. The larger note has a maturity of 27 months. Both trades pay interest singularly. Goldman Sachs bookrunnered a euro250 million note for Hypothekenbank in Essen. The note is issued tomorrow (August 3) and matures on February 3 2003. Deutsche Telekom concluded the largest trade - a two-year euro500 million note that pays interest quarterly. Morgan Stanley is set to issue a six-year euro100 million note on August 8. The note pays interest singularly.

Market conditions conspired to make Fannie Mae's third issue of subordinated debt on Wednesday arguably the most successful since the asset class first appeared at the beginning of the year. Fannie Mae's inaugural sub debt deal was priced in January at a spread to senior paper of 22bp, and reached 19bp in the aftermarket. Since then, subordinated agency paper has steadily widened.

The trend continued in euro yesterday for short-dated trades. Ten notes were traded but none had a tenor of more than five years. Credit Lyonnais Finance followed up its one-year euro2.5 million ($2.19 million) note from Friday with a three-month euro25 million note that has a zero interest payment frequency. At the other end of the maturity curve, Crediop Overseas Bank concluded a euro10 million note that matures on December 29 2006. The note pays interest singularly and has a final coupon of 4.500%. Banque PSA Finance issued the largest trade - a euro200 million note to be issued on August 14. The two-year note pays interest singularly. Pfandbrief Bank International traded the second largest note, for euro150 million. The note pays interest singularly and has a final coupon of 4.245%. Also trading were Banque et Caisse d'Epargne de l'Etat Luxembourg, whose euro7.2 million MTN was its 55th in euro this year. In contrast, Abbey National Funding issued its first euro MTN in 2001 - a euro6.93 million trade that matures in one-year.

Focus Retail Group launched its £170m B3/B rated senior notes this week, pricing them at the top end of price talk. The notes are split into two tranches, both maturing on November 1, 2010. The larger £125m piece offers a standard non-call term of 4-1/4 years, and was priced at par with a coupon of 11%. The £45m piece has a non-standard, immediate call, redeemable at 102.00 until November 2003 and at par thereafter, and was priced at par with a coupon of 13%.