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The covered bond sector moved up a gear this week as over Eu9bn of bonds hit the euro market. Hypothekenbank in Essen AG launched the joint biggest jumbo Pfandbrief ever, a benchmark Eu5bn January 2011 deal. Joint leads Barclays Capital, Commerzbank and Schroder Salomon Smith Barney reported strong orders for the deal despite the size.

Inter-American Development Bank (IADB) has signed and self-arranged a global debt programme that replaces its Euro- and US MTN shelves. The new facility has no size limit or dealer panel. Hakan Lonaeus, chief of funding at IADB, says: "This facility streamlines our two existing shelves and essentially simplifies the documentation." The inaugural trade, a $2 billion five-year deal, was done last week via ABN Amro and Merrill Lynch. It is expected that the facility will be used to find most of the issuer's $6 billion to $8 billion funding requirements during the year. Lonaeus says: "The Aussie dollar and Taiwan markets will be accessed with our domestic programmes in those countries, but otherwise we will access any currency with this programme depending on the arbitrage opportunity."

Three deals from Irish issuers are part of the healthy pipeline building in the subordinated bank capital market at the start of 2001, according to originators. However, investors may have to wait until February and March before the primary markets pick up a head of steam, despite the activity already underway in other sectors of the market.

Islandsbanki-FBA came to the market for the first time this year with a one-year $15 million FRN. The trade is unstructured and pays interest quarterly. It was unsyndicated and Lehman Brothers was the dealer. Ingvar Ragnarsson, senior funding manager at Islandsbanki-FBA, says the expected amount of funds to be raised off the programme this year is euro700 million ($664.33 million).

Dutch steel producer Ispat is set to issue the first European high yield deal of 2001 and take advantage of the recovering market, with a Eu175m 10 year bond via Credit Suisse First Boston. "Roadshows are underway this week and we will be looking to price by the end of next week," said a syndicate official at CSFB.

Kommunkredit Austria has issued a euro50 million ($47.45 million) FRN via DG Deutsche Genossenschaftsbank as lead dealer. The note, Kommunalkredit Austria's first this year, pays interest semi-annually and the final coupon is Euriobor +0.5%. The note, which matures in January 2008, is the 24th off Kommunalkredit Austria's euro2 billion debt issuance programme. Last year it issued a Swiss franc note and dollar trade, but the issuance was predominantly in euro.

Kommunalkredit Austria has increased the debt ceiling of its debt issuance programme from euro2 billion ($1.88 billion) to euro3 billion. The programme was nearing its ceiling and has $1.97 billion outstanding off 24 trades.

BNP Paribas and Dresdner will make another attempt at raising money to help French building materials group Lafarge buy competitor Blue Circle when the terms for a Eu1bn preferential rights issue are set next week. Lafarge, after failing to acquire Blue Circle in April 2000, will pay 495p per share, or a total of Eu3.8bn, for the 77.4% of the company it does not already own. Although the price per share has been increased from 473p to 495p since April, Lafarge will only pay what it was ready to pay in April. "With the depreciation of the pound against the euro, the global investment remains the same as in April," said an analyst from a leading French bank.

The New Year has seen one of the market's longest running questions answered. Who would run the JP Morgan/Chase desk? The wild boy of the MTN market, Morgan's Rupert Lewis, or everybody's favourite accountant, Chase's Garrath Fulford? Well the dice has rolled and bean counter Garrath has been appointed. Rupert has gone off skiing, which in this day and age is the most dignified form of sulking. Whether he will return remains unanswered. The merger sees just one person leave the desk. The alarmingly named Rob Stoole, Morgan's junior trader, has moved to syndicate. We shall miss his floaters. And Garrath can count himself one of the luckier MTNers around after doing pretty well out of the SBC/UBS merger, unlike poor Jon Saunders. When Gavin Eddy arrived from Merrill Lynch Garrath was fortunate enough to spend less than a year in exile in Japan before he found the Chase job. Barclays now has a full house, after officially hiring Landesbank Baden Wurttemburg's Monja Blattner. Whether A-booze-a-lot and A-pose-a-lot can justify a four-strong MTN desk remains to be seen.

* Corporacion Andina de Fomento (CAF) launched a $300m 10 year Yankee bond issue on Wednesday via sole lead manager Merrill Lynch, which was oversubscribed despite an increase from $250m. Three quarters of the deal was placed in the US but the inclusion of an unusual Luxembourg listing paid off handsomely, said a Merrill Lynch syndicate official, with 25% of the bond going to European investors.

BNP Paribas and Dresdner Kleinwort Wasserstein are understood to have underwritten about Eu3.5bn of debt supporting Lafarge's cash bid for UK cement company Blue Circle. The size of the loan to be syndicated is still unclear but it is understood that the borrower plans to make a rights issue of about Eu1bn (see equity capital markets pages). The amount of the loan depends on the amount raised in the issue.