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Market report Compiled by Frank Hracs, TD Securities, Toronto

Argentina and its top corporates suffered another setback this week when Standard & Poor's (S&P) placed the country on CreditWatch for a downgrade, just a month after affirming the sovereign's BB foreign currency rating. Although Argentine sovereign spreads started to stabilise this week - the market having already discounted bad news into the country's bonds - bankers warned that a loss of Argentina's BBB- local currency rating could trigger a run of downgrades on the country's blue chip corporates that carry BBB- ratings - something the market has not yet factored into current prices.

The governor of the Czech National Bank (CNB), Josef Tosovsky, has announced that he will retire at the end of the month, after 10 years at the helm, and will join the Financial Stability Unit (FSU) of the Bank for International Settlements as its new chairman. The move, announced on Tuesday, follows the failure of Tosovsky's bid to replace Hungarian ex-prime minister Miklos Nemeth as a vice president at the EBRD. Last week, the Polish central bank was thrown into turmoil with the surprise appointment of its governor, Hanna Gronkiewicz-Waltz, to the EBRD vice presidency coveted by Tosovsky. Now the Czech Republic too finds itself without a head of monetary policy, though at a less economically sensitive time.

Deutsche Post is offering its shares at a large discount to its closest comparable to try and attract interest in its Eu5.8bn-Eu7.4bn IPO and the tactic seems to be paying off. The deal, which offers shares at between Eu18 and Eu23, is thought to be on course to be over four times covered.

US dollar swap spreads gradually tightened again this week in markets characterised by improving credit conditions, but also a dearth of new issue business. The 10 year was trading at around 109bp over Treasuries midday yesterday (Thursday).

Hungary The market is waiting to see who will arrange the new financing for oil and gas company Mol. Bidding for the EIB guaranteed facility closed on Tuesday.

Uncertainty about the Dutch government's proposed changes to the tax treatment of securitisations played havoc in the market this week. The two most recently issued deals, SNS Bank's Hermes II and DBV Levensverzekeringsmaatschappij's Holland Homes closed on schedule, but SNS Bank had to abandon its planned sale of a subordinated tranche, fearing that the tax changes could leave the deal with a cash shortfall.

The low cost airline easyJet announced a price range for its £181m-£254m IPO this week, although analysts continue to question the firm's business model. easyJet is roadshowing the deal in the Netherlands today (Friday) and will visit London and the US next week. The base offering consists of 63m shares at 250p-350p, and the greenshoe is made up of 9.45m shares. All the shares offered are new. The total will represent 28.8% of the company.

Latin America * Corporación de Andina de Fomento

ENI has added CSFB as a dealer to its euro1 billion ($861.6 million) Euro-CP programme. Issuance off the programme has been very high this year. The programme was signed in 1999 via Goldman Sachs.

* Fortis Lux Finance SA Guarantor: Fortis Bank

* Banca Popolare di Bergamo - Credito Varesino SCRL Senior rating: A2/A