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REACTING to the opportunities for fixed income expansion presented by the success of the euro, bulge bracket firms have been hiring heavily in European fixed income sales. Morgan Stanley Dean Witter has recruited a team of five to its fixed income corporate derivatives marketing, bringing the number covering European corporates and sovereigns derivatives up to 20.

Market report: Compiled by Frank Hracs

* Volkswagen Financial Services NV Guarantor: Volkswagen Financial Services AG

DaimlerChrysler has upped the ceiling off its multi-currency CP programme from euro3 billion ($2.58 billion) to euro10 billion. The facility was signed in 1999 and was arranged by Deutsche Bank.

The bulging pipeline of debt that had been spectacularly growing for the past four weeks finally broke over the global capital markets this week. On Tuesday alone, $5bn of new debt was printed in the US high grade sector. There has been prodigious issuance in both the dollar and euro markets with more to come. Ten year dollar swap spreads fell to 124bp over the 5.75% August 2010 Treasury by yesterday (Thursday) afternoon, about 3bp tighter than a week ago. The five year mid-market came to 94.5bp over the 6.75% May 2005 Treasury, almost 2bp tighter on the week.

Uruguay ensured a successful debut in euros this week by pricing a Eu225m issue attractively for an investor base wary of high yielding credits following the recent sell-off in European telecoms deals. The five year 7% deal, led by CSFB and Schroder Salomon Smith Barney, was increased from Eu200m and priced at 99.49 to yield 7.125% or 195bp over the Bobl and 185bp over the Btan, compared with a price talk of 195bp-205bp over the Bobl.

Deutsche Bank has signed a euro10 billion ($8.59 billion) secured note programme via the conduit Eirles Two. It follows Eirles One's programme of the same size which signed in April this year. Both are domiciled in Ireland.

Deutsche Bank closed a Eu133.65m convertible for SGL Carbon on Tuesday despite all eyes being fixed on the massive Hutchison/Vodafone trade. The Eu120m - plus Eu13.67m greenshoe exercised yesterday (Thursday) - five year bond came at the tight end of the coupon range of 3.5%-4% following a six times oversubscription. The conversion premium was set at the top of the 20%-25% range. Dresdner Kleinwort Benson was joint lead manager for the sale.

DKB Australia has signed a $100 million Euro-MTN programme. DKB International is the arranger and the dealer panel comprises ABN Amro, Barclays Capital, Deutsche Bank, Goldman Sachs, HSBC, Lehman Brothers, Merrill Lynch, Morgan Stanley Dean Witter, Nomura, Salomon Smith Barney and the arranger.