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The Republic of Turkey launched a Eu250m tap yesterday (Thursday) though ABN Amro and Credit Suisse First Boston of its Eu500m 8.25% 2004, first launched only two weeks earlier via the same lead managers. The deal ends speculation as to whether the republic would await the expected tightening of its dollar curve in response to the continued successful implementation of the IMF programme, and launch a much larger dollar denominated offering.

CSFB, Dresdner Kleinwort Wasserstein and SG have won the mandate to arrange a Eu600m facility for diversified natural resources group Xstrata to finance its acquisition of Spanish company Asturian de Zinc. All three banks are bookrunners and Dresdner is facility agent.

A European Union directive to be drafted soon will mean that fungible trades cannot be reopened without the issuer paying withholding tax. As a result of the forthcoming directive, issuers are rushing to increase and settle fungible trades before March 1 this year - the cut-off date to avoid paying withholding tax. Bas Snijders, director of funding at SNS Bank, says: "It's difficult to say what effect this will have on the market. It will be impossible to increase fungible bonds." SNS Bank Nederland reopened two of its fungible bonds this week. The original euro700 million ($642.53 million) and euro800 million deals were each increased to euro1 billion. The former was lead-managed by HSBC and Merrill Lynch, while Barclays Capital and BNP Paribas lead managed the latter. By increasing the bonds now, SNS will avoid paying withholding tax. Snijders says: "We accommodated strong institutional and retail demand for both issues, but it will not actually save us money at this stage." The trades will be settled two days before March 1.

* Banque PSA Finance Rating: A3/A-

Freddie Mac plans to launch its latest EuReference Note issue, a Eu5bn three year transaction via BNP Paribas, Lehman Brothers and Merrill Lynch, within the next week, Louise Herrle, the US agency's treasurer told EuroWeek yesterday (Wednesday).

Ned Gramlich, a US Federal Reserve governor, this morning told delegates at the Euromoney International Bond Congress, in his address on changes in productivity growth and their impact on monetary policy, that the role of IT infrastructure development as key to productivity growth could be the reason why Europe has lagged the US in recent years.

Freddie Mac priced $5bn of 5.25% three year notes last Friday (February 9) using a Dutch auction system. The transaction was the first of this maturity and the longest the agency has done through an auction. The Dutch auction system continues to perturb some dealers who believe it may erode secondary market support for the securities.

Goldman Sachs has signed a $10 billion multi-issuer secured obligation programme under the name FABS Luxembourg. It is the second FABS programme arranged by Goldman Sachs and the first financial repackaged facility to be signed this year. The first FABS facility was also a $10 billion shelf and was signed in December 1998. It is domiciled in the Netherlands and has $87.35 million outstanding off 10 trades.

Debt management officials from EU member states met with tax legislators on Friday for the latest in a series of discussions on the use of fungible bond issues under the proposed European Union savings tax directive. Bankers warned that the concerns raised in the meetings could delay the appearance of the draft savings tax directive, which is due for publication on or around March 1.

Ten year swaps rose at the end of this week. By the close of trading yesterday (Thursday) the mid-market at 10 years was 97.5bp over the new 5% February 2011 Treasury, while the mid-market at five years was around 82.5bp over the reopened 5.75% Treasury due November 2005. These prices were off the highs of the day. Earlier in the afternoon, the five year had dealt at 86bp and the 10 year at 99.75bp. Although five year spreads are little changed from a week ago, the 10 year is at least 4bp wider.

A resounding new corporate benchmark was created for the Asian market this week, when Hutchison Whampoa launched a $1.5bn 10 year bond. The deal is the largest single tranche corporate bond from non-Japan Asia, and follows Hutchison’s last foray into the debt capital markets in 1997, when it arranged a $2bn multi-tranche bond offering.

Mark Grotevant, group head of telecommunications and media, leveraged finance research at Credit Suisse First Boston, told delegates at the Euromoney International Bond Congress today that he expects high yield telecoms bonds to earn excess returns in 2001.