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US dollar swaps widened sharply yesterday (Thursday) as equities sold off and Treasuries rallied. The US economy is displaying signs of weakness and the shares of technology companies slumped, giving Nasdaq its worst month since the 1987 crash. The 10 year swap spread widened to a mid of 117.5bp and the five year pushed out to 106.75bp. Two year swaps are 78bp, while 30 year levels are unchanged.

Moody's aligned itself with Standard & Poor's (S&P) and Fitch this week, when it announced plans to change the way it rates preferred stock. Unlike the other rating agencies, which rate preferred stock and bonds on the same scale, Moody's has used a different rating scale for prefs - arguing that there are "fundamental differences between preferred stock and bonds".

* European Investment Bank Rating: Aaa/AAA

* BES Finance Ltd Guarantor: Banco Espirito Santo SA

Domestic issuance: * Pfandbriefzentrale der Schweizerischen Kantonalbanken

Sceptics insist that credit derivatives and synthetic securitisation are a flash in the pan. But most of the evidence suggests these techniques are so powerful and versatile that they will play a vital role in the new world of grown-up risk management.

The credit derivatives market and its alter ego, synthetic securitisation, have grown exponentially in the last few years as banks have spotted a welcome opportunity to raise their return on capital. But there is still a long way to go before unfunded credit risk is a truly liquid commodity.

Synthetic securitisation came like the answer to a prayer for many big banks, offering the prospect of transferring almost unlimited quantities of low yielding corporate loans with unprecedented efficiency.

In mid-November Dan Wilchins, managing editor of Derivatives Week, spent a day on the credit derivative trading desk at Chase in New York.

Hypo Tirol Bank (Hypo Tirol) signed a euro2 billion ($1.72 billion) debt issuance programme on Thursday 30 November. It is the third signing this year from an Austrian bank, following Bawag, which signed its euro3 billion Euro-MTN in June and Oberosterreichische Landesbank which signed its euro1 billion debt issuance programme in July. Deutsche Bank has scooped the arrangership and the mandate confirms Deutsche Bank's position at the top of the arrangership league table (see page 22). Deutsche Bank has arranged 21 programmes this year, including one for ENV, another Austrian issuer. The tally puts the bank seven programmes ahead of Merrill Lynch which held the top spot for 1998 and 1999. Hypo Tirol is one of eight Austrian Landesbanks and has a balance sheet of euro4.85 billion, as of December 1999. The issuer is rated AA+ by Standard & Poors. The dealers on the dealer panel are the arranger, Commerzbank, Credit Suisse First Boston, DG Bank, Erste Bank der Osterreichischen Sparkassen, HypoVereinsbank, JP Morgan and Merrill Lynch.

Enel will sign its euro3 billion ($2.53 billion) global MTN programme next week, if all goes to plan. Deutsche Bank and JP Morgan are the arrangers. The dealer panel comprises ABN Amro, Barclays Capital, BNP Paribas, Lehman Brothers, Mediobanca, Merrill Lynch, Salomon Smith Barney and UBS Warburg. It is the third Italian utility to join the market in the past year, after Eni signed its Euro-MTN programme in November 1999 and Edison, the electricity producer, signed its facility last July. And it has been a good year for utilities, with 12 signings already and Enel raising this number to 13. The number has already surpassed the 11 programmes signed by utilities in 1999. Enel is the world's largest publicly listed electric utility with 29 million customers. Standard & Poor's has assigned its programme an A+ rating. The Italian utility, which once had a monopoly on generating electricity in Italy, is now ensuring its place in the energy market by buying gas and water operations.