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Commerzbank has confirmed its status as one of the leading players in rand sector. Yesterday, Monday December 4 2000 saw the German bank issue its longest-dated rand trade to date: a R100 million ($15.85 million) fixed-rated trade that matures on December 29 2006. The issue date is December 29 2000. Royal Bank of Canada, which has been responsible for lead managing over half the rand trades this year, was the bookrunner. The trade pays out an annual 12% coupon and was bought by the same investor who snapped up the seven other Commerzbank rand deals this year, according to Thomas Behme at the issuer's treasury. Only the European Investment bank has issued more rand this year. Commerzbank has sold 8 rand notes, raising $145 million. There have been 51 rand trades issued in total this year.

The loan market took a direct hit on Wednesday when Turkey's ninth largest bank, Demir Bank, went into state administration, only two weeks after it signed a $140m loan. But investors were reassured when the Turkish treasury announced that deposits and loans from foreign banks were to be guaranteed.

zech Republic The seven year Eu75m financing for the City of Prague is expected to close in the next two weeks. The facility has been oversubscribed and the borrower is considering an increase. The margin is 32.5bp over Libor over the first four years and 35bp in the last three.

EBS Building Society (EBS) is set to become the second Irish issuer to come to market this year. The Dublin-based mutual plans to sign a euro1 billion ($1.07 billion) Euro-MTN programme in early June 1999. Merrill Lynch has won the arrangership mandate. This means the bank now arranges six of the eight Irish programmes in the market. EBS plans to grab investor attention with an inaugural issue in July but full details of the bond have still to be decided. It will pave the way for future public and private placements. Mike Lennon, head of treasury at EBS, says: "If we go ahead with the public launch the first year's issuance will be more infrequent. We'll meet a lot of our needs from the public deal. But we'll still be in the market for smaller deals that make sense for us." Irish building societies have to meet the challenges of Emu's low interest rate environment. EBS was the first Irish building society to lower its variable mortgage rate below 5% following last month's euro rate cut. And in doing so, it managed to undercut the only other Irish building society in the MTN market, Irish Permanent. Lennon, at EBS, says: "We need to attract a wider array of investors since we're a euro country now." A dealer group with strong geographical distribution has been chosen but EBS is open to reverse enquiry. The named dealers off the shelf are Barclays Capital, Dresdner Bank, SG, Salomon Smith Barney and the arranger. Ratings are expected to be assigned to the programme shortly.

Dutch Housing Association Finance (DuHAF) will bring a pioneering programme to the private placement market when it signs its euro1 billion ($1.06 billion) Euro-MTN programme next week. DuHAF, guaranteed by the Dutch government, is a funding vehicle for social housing. It is zero risk-weighted. Morgan Stanley Dean Witter and Rabobank jointly arrange the facility. They are also the only named dealers. Notes off the facility will be rated triple-A by Standard & Poor's and Moody's. DuHAF is a vehicle to pool the funding needs of housing associations across the Netherlands. Twenty of the 700-plus associations are shareholders in DuHAF. The number is expected to reach 400 in two or three years' time. Valentijn Thijssen, from the treasury advisory group which acts as manager of the administration of the programme, says: "We will be a very active issuer and therefore attract the bigger housing associations. We want to capture those more advanced in their treasury activities and those with bigger funding needs." Since DuHAF caters for associations with varying funding needs, all maturities and tranche sizes will be considered. A funding target of euro500 million has been estimated with issuance planned for September. A target price of about two-and-a-half basis points below Euribor has been set. How much of the association's funding needs will be met off the facility is uncertain. Thijssen, of the treasury advisory group, says: "In the end it's just about price, as everything is. How much we do depends on whether we can beat the domestic funding rates."

Finland's second Euro-MTN signing of the year happened on December 4, through Elisa Communications. It also announced the dealer panel, which includes the arranger Chase Manhattan, ABN Amro, BNP Paribas, Handelsbanken, HSBC, Leonia Bank, MeritaNordbanken, Merrill Lynch, Okobank, SEB Debt Capital Markets, UBS Warburg and WestLB. The euro1 billion ($891.3 million) programme will be used sporadically for refinancing old debt at first, but by 2003 Juha Kervinen, group treasurer at Elisa Communications, hopes to be issuing more regularly. He says: "Telecom spreads have been widening all year, and although the sector is stable at the moment we may delay our inaugural until we have real funding needs." But he did not rule out issuing a euro300 million note before the end of the year. About 95% of the company's funding is in euros, so there are no plans to issue outside of Europe. This is the first Euro-MTN programme to be arranged by Chase Manhattan since Region of Umbria signed this time in 1999. But it is the 21st dealership won by the US bank this year.

Brazil * Banco BBA Creditanstalt

Enel has put pen to paper, today Thursday December 7 2000, and signed the eighth global MTN programme of 2000. For full details of the programme see MTNWeek, issue 208.

Eni has hit the market twice with two five-year dollar trades to be issued tomorrow. Both trades pay interest annually. The $20 million note pays a final coupon of 6.42% and the $15 million issue pays a final coupon of 6.36%. It is Eni's third dollar trade this year following another five-year note, issued on November 16, which paid a final coupon of 6.82%. Eni has used its programme on only two more occasions, issuing two ten-year euro500 million ($438.43 million) notes that were both issued on 9 June 2000.

* Banca Popolare di Intra Rating: BBB+/A- (S&P/Fitch)

The US MTN market is renowned as an issuer-driven credit market with large vanilla trades. When the euro was introduced dealers thought the Euro-MTN market would become increasingly like the US MTN market. Two years on, it has developed and is heading for the liquidity and easy issuance that comes with a single currency. This year has seen less structured private placements than previous years and investors are moving down the credit curve. Has the US MTN market got anything left to offer that the Euro-MTN market can't? Diageo set up its US MTN programme in October 1999 and Matthew Antoniou, head of capital markets at Diageo, says: "We use MTNs in general to smooth out our maturity profile. We like to have maximum flexibility in funding so we are not held hostage to any one market and the more markets we have access to the better." And one US issuer also finds that the US market provides long maturities. Chris Nolan, manager of treasury and foreign exchange at Coca Cola Amatil, says: "You can go out for a much longer duration in the US market of around 30 years. The US investors are willing to take a little more risk than Euro investors, but that is changing." Bruce Cairnduff, director of iBrax, ran the Deutsche US MTN desk in New York until two years ago. He says: "There is a huge benefit in having a US domestic programme as well as a Euro programme. Every major issuer should and probably does have both programmes or a global MTN. Markets throughout the world behave in different ways at different times, so it is an advantage if you've created access to markets in the US, Europe and Japan." But some dealers feel the US market lacks the excitement of the Euromarket. There are still three main differences between the two markets. The Euromarket remains a multi-currency market, with just 34% of the trades this year done in euro. This gives arbitrage opportunities that are not possible in the US MTN market. Michael Maita, vice president, debt capital markets at Morgan Stanley Dean Witter in New York, says: "The Euro-market is fragmented and flexible in terms of currency. Historically the Euro-MTN has two purposes - as a platform for Eurobonds and for reverse enquiry for private placements." Secondly, US MTNs are almost exclusively vanilla products. This eliminates much of the more intellectually stimulating work of devising structures. There have been strict regulations governing the issuance of structures in the US following the bankruptcy scandal of Orange County in 1994. More than $1.6 billion was lost from one of the US' most profitable derivatives-based investment pools. And thirdly, US programmes are closed to reverse enquiry. Cairnduff, who also worked in the UK heading the desks at Lehman Brothers and then Sumitomo, says: "US issuers only work with their dealer group. It's difficult for dealers on a competitive basis to show opportunities to issuers. The whole process is homogeneous and there is no opportunity for dealers to be creative." Bank of Scotland set up both its US and Euro-MTN programmes in 1996, but has used the Euro programme much more. Stephen Lorimer, senior dealer, capital markets at the bank, says: "Virtually everything we do is off our Euro-MTN programme." One particular aspect of the US market can be off-putting to issuers that are used to the flexible attitude to credits in the Euromarket. Lorimer, at Bank of Scotland, which is rated A1/Aa3, says: "Rating is all-important. Some will buy a split-rated issuer and some won't, so it can be frustrating for issuers on the cusp. I think the European investor base is prepared to sit down and do its own credit work." But the uniform approach to credit ratings can also mean increased liquidity in the US market. Whereas a European investor might prefer a well-known issuer of its own nationality, US investors see the rating and may not need further details of the issuer's credit story. Lafarge's US subsidiary has a US MTN programme, but Lafarge itself has not yet felt the need to set one up. Jean-Marc Doucet, long-term funding manager at Lafarge, says: "As a French issuer, about 30% or 40% of the bonds and notes we place are in French investors' hands, so liquidity in the Euromarket is not as high as in the US." One downside of the US market is rule 133 of the US Financial Accounting Standards Board (FASB). US investors have to mark-to-market currency swaps and as a result these transactions are more complex than in the Euromarket. Brian McCarthy, director, head of Euro-MTNs at Lehman Brothers, says: "FASB 133 is a major concern for US issuers that want to look to issue in other currencies. This makes the EMTN market all the more fascinating since the US MTN market is almost entirely dollar based." But another rule, 2a-7, ensures that the share price of a money market fund and the market value of its portfolio do not differ too much. This protects investors, and permits the short-term money market funds to invest only in highly-rated notes. McCarthy says: "It's easier for issuers to get lots of large MTNs done in the US in the front-end of the curve by using the named agents on their MTN programmes. Many of the US banks and finance companies take advantage of this aggressive front-end bid and can be in and out of the market for $500 million in a few hours by merely posting MTN levels."

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