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Avinder Bindra, managing director and head of global loan products for Asia, Japan and Australia at Citibank will leave the company at the end of September. "I've been at the bank a long time, but I've decided to leave and look at other opportunities," said Bindra. The bank has asked Bindra to stay for two months, after which he said he would take a few months off and review his options. Bindra said that he had some internet related opportunities amongst his choices, but declined to elaborate.

Commerzbank announced this week that it will enter the principal finance market through an unusual collaboration with an independent investment group. The bank will cooperate with Patron Capital Ltd, a UK based investment adviser set up in early 1999 by Keith Breslauer, a former Lehman Brothers principal finance specialist. Commerzbank is believed to have made principal finance style investments in a piecemeal way, but now wishes to expand its activity.

In MTNWeek's first dealer survey post-Emu, all eyes are focused on Europe. And the outlook is positive. There is no better time for market growth, diversification, new issuers and investors, according to the results. Any concerns about the euro have rapidly diminished with issuance in the new currency ever increasing. Non-Japan Asia is marked by its absence in the survey. Japan struggles to make an impact amidst the dominant theme of Euromarket expansion. Monetary union has certainly changed the face of the Euro-MTN world. ?Currencies The euro has been voted the main rising currency post-Emu, as predicted in MTNWeek's 1998 dealer survey. It is ahead of its major rivals yen, sterling and dollar, by a considerable margin, with 32.39the total votes. Eastern European currencies are also predicted to rise in favour, with zloty receiving 5.63 nd Czech koruna getting 4.22%votes. Though drachma is in evidence, it has failed to maintain its popularity of last year, gaining 4.22%the vote, compared to the 7.1% it achieved in 1998. Diminishing opportunities for convergence plays is largely to blame. The rand, mentioned as a strong contender in 1998, failed to get a single mention in this year's survey. Scandinavian currencies still look strong with Swedish krona in the top eight. ?Structures A varied bag of structures was picked out by dealers including Eonia-, credit-linked and commodity-linked trades in all currencies. However, the CMS-linked structure proved the most popular of the lot, ranking highest in the poll with 15.87the total votes. Investors gain flexibility in linking notes to the constant maturity swap rate. The Federal Reserve's decision to keep a tighter check on interest rates, is one reason given to explain investors' preference for CMS floaters. There is now uncertainty about where interest rates will go. Credit-linked structures are proving slow to catch on despite being predicted in last year's survey to be the dominant choice of investors in the coming year. This structure is likely to see more gradual growth. Equity-linked and index-linked structures remain popular. And favoured currency denominations are euros, yen and dollars, in that order of preference. The survey sees a more balanced split between vanilla and structured trades than last year, with an increase in vanilla products from 31.65% to 41.7% and a fall in structured deals from 68.35% to 58.3%. ?Issuers Unlike last year's survey, no particular borrower stood out in the poll for most exciting issuer. Dealers all seem to have their particular favourites when it comes to this category. Svensk Exportkredit (SEK) has the glory of the top position but by a narrow margin. It received 15% of the total votes but is closely followed by Republic of Italy and BAT international Finance. Italy was tipped for great things when it signed its programme in July last year and it is looking like it won't disappoint. SEK also stands above the bunch for innovation. It was voted as issuer most responsive to structure ideas by 13.46% of dealers. Unsurprisingly the banking sector was prominent in the innovative issuers category with many being named. Abbey National, Bacob Bank, Bayerische Landesbank, De Nationale Investeringsbank (DNIB), Rabobank and Halifax all got a mention along with those dealers who voted for their own houses. Imperial Chemical Industries which received the accolade in 1998, is notably absent from the list. The issuer has chosen more recently to stick with safer fixed-rate structures. ?Growth regions Europe has, once again, come out as the strongest growth area with over 80% of the vote. Southern Europe held a significant proportion of this figure, with 29.73% of Europe's total. Emerging markets and Scandinavia had surprisingly little impact in the survey, though both were predicted to be growth areas in last year's survey. Non-Japan Asia is notably absent, in terms of growth regions, currencies and investors. Recovery in the area is proving to be slow. Japanese borrowers remain quiet with no dealer picking the country out as an area of potential growth. Single-A rated issuers are expected to be the most popular in 1999, closely followed by those rated triple-B. Some dealers suggest double-A rated issuers could find themselves left struggling to find a market as investors are increasingly prepared to expose themselves to credit risk in the search for higher yield. Since top rated borrowers are always in demand the worry is that these issuers will slip through the net. The corporate sector remains the number one choice for dealers as a growth area, scooping 50% of the total votes. Local governments, insurance companies, especially guaranteed investment contract-backed issuers, were also worthy of a mention. ?Impact of Emu The general consensus of dealers is that the impact of Emu is dramatic. The market looks set to expand with more European issuers signing programmes and the growth of a wider ranging, deeper investor base. One dealer says: "Emu is a catalyst for growth. We will increasingly see the acceptance of MTN documents as the platform for issuance." The market will become increasingly open, transparent and liquid. Most predict greater competition between borrowers as they fight for attention in a broader investor-driven market. Many dealers expressed relief that the euro will make it far easier to do swaps into other non-European currencies. Others think deal size will increase and more plain vanilla issuance will be seen as investors fear the euro will become more volatile in the future. ?Investors The largest expansion and broadest diversification of investors looks set to be in the European market. One dealer suggests the absence of Japanese funds could be a major reason for the focus on Europe. An increased credit focus in the market is also expected. Many dealers predict more investors will be prepared to take a risk on lower rated borrowers in an attempt to gain greater yield. Some of those polled expect 1999 will see greater institutional demand, with mutual funds featuring well. ?League Tables Whether dealers love them or loathe them MTN issuance league tables were considered important by 65% of issuers polled in last week's survey. This week, market players had the opportunity to define the benchmarks they think should be used in ranking themselves. However, the results prove that dealers just can't agree on a formula to best represent an MTN trade. Unfortunately, many dealers simply include or exclude the criteria that will put them at the top. The market is divided. Thirty-three per cent think no cap should be placed on the size of trades. Of the other two-thirds of dealers, who thought a ceiling was necessary, a majority of 44% believed MTNWeek's current $250 million ceiling was a good measure. Thirty-eight per cent believed the cap should be lower than $200 million. The inclusion of self-led deals, deals for financially repackaged issuers and those trades with a term of less than 365 days, caused yet more division among dealers. While over 73% of people polled believed self-led trades should be excluded, on the subject of SPVs and deals of less than 365 days, the votes were split almost 50/50. ?Impact of the year 2000 Most dealers seem to agree that the possibility of information technology problems at the close of 1999 is causing jitters among borrowers. The prediction is that most issuers will look to complete all their funding before the final quarter of the year. The result will be a dramatic slow down in the market and a lack of liquidity. One dealer explains that banks will also be looking to balance their books early, rather than at the close of the year to avoid any upheavals a millennium bug may cause. Almost 20% of dealers polled had no concerns and believed that the arrival of the year 2000 would have no effect on the MTN market. Most people recognised the issue but felt it was overrated and was more about perceptions than reality. One dealer says: "It is a self-fulfilling prophecy that the fourth quarter will be quiet. Opportunistic issuers should be rewarded."

The credit market has arrived. Or so say the dealers. MTNWeek polled more dealers than ever before in its fourth annual dealer survey and the overwhelming response was that 2000 will be the year of the triple-B European corporate. But these results reflect optimism on the part of dealers. Figures from MTNWare and remarks made by some dealers in other parts of the survey suggest that there is some way to go before investors become happy moving all the way down the credit curve. Currencies Euro tops the currency table, but only just (see table 1). Last year it received 18% of the vote than its nearest rival, dollar. One dealer sums up the frustration felt with the currency's poor performance: "The euro is supposed to be a reserve currency." This year it has taken a battering and it is not surprising that many dealers predict that yen will become the main currency for trading. Yen is also the currency of choice for many structures, especially CMS-linked notes, interest rate-linked notes and power reverse duals. The rising stars are Singapore and Hong Kong dollars, which have never before made an appearance in an MTNWeek dealer survey. Trading in these two currencies this year has already outstripped total issuance in 1999 (see MTNWeek, issue 180). One dealer predicts that the market will see more activity from south east Asian investors over the next 12 months. Both Scandinavian and central European currencies are predicted only modest growth. Zloty, which has become the eighth most popular currency of this year, is tipped to fall. Structures The MTN market has definitely become less focused on structures, with dealers saying that 56.68:f their business is plain vanilla (see fig 1). One leading MTN house says: "The biggest disappointment this year has been the drop-off in structured business." And another top-five player agrees: "There has not been enough structured business this year." Despite this, all dealers named structures that they think will take off in 2000. And CMS is back, winning 7.6% of the vote. The structure, which was the star of 1999, has had a quiet year, but it is back in favour. And it is only just beaten by the equity-linked notes that have dominated 2000. The plummet of the stock markets has taken the shine off equity-linked notes and these structures only manage a 10.1% share of the vote. Lightly structured notes are predicted to be the mainstay of business with callables receiving 13.9% of the vote. Credit-linked notes, which were the top structure in the 1998 survey, pick up only 0.63% of the dealers' votes. But vanilla trades, particularly FRNs, are predicted to dominate the market in the next 12 months. Floaters pick up 17% of the vote. One dealer voices a common theme: "I predict a return to defensive structures." Ratchet notes, which act a little like a collared floater, are mentioned by a couple of dealers as a less risky trade that will be popular. Issuers SNS Bank easily tops the poll as the issuer which has made best use of its programme. Last year it did not receive any votes, but the Dutch bank, which signed its euro10 billion ($9.38 billion) Euro-MTN programme in 1998, has had a very successful year. It has issued 58 notes this year, raising $3.73 billion. Abbey National, whose appearance in MTNWeek's dealer surveys is a foregone conclusion, comes in second ahead of market leader SEK and the increasingly ubiquitous Islandsbanki FBA. Volvo has done well to be the only corporate to make it into the top six. The only other corporates mentioned were fellow car maker Renault, and Scottish & Newcastle, which has had a busy 2000. SEK, for the second year running, wins the issuer most responsive to structures poll. NIB Capital, which was fourth last year, comes in second along with fellow financials, BCEE, Irish Permanent, SNS Bank and Westland Utrecht. Indeed all the issuers voted for in this category were financials. Jackson National Life, which has proved to be the most active of all the gics, received votes in both categories, but not enough to make it into the tables. It will be pleased, however, not to have been mentioned in a new category: most difficult issuer. In response to issuers naming their most disappointing dealer in the issuers survey (see issue 181), traders were given their chance to name and shame. Diageo, which prides itself on its aggressive tactics, comes out as the most difficult issuer in the market. Vattenfall is the only other issuer to be named by more than one house. However 24 other issuers are nominated. Market veterans KfW and Republic of Italy receive a vote as well as corporates Ford and Compagnie de Saint-Gobain. "All telecoms" was the vote of one exasperated dealer. Growth areas The corporate sector of the Euro-MTN market has been given a huge vote of confidence by dealers. Eighty percent of houses believe that corporates are the next growth area. Yet though 26% of new signings this year have been corporates (compared to 22% in 1999) corporate issuance is a little sluggish. Last year 4.93% of non-syndicated debt was off private corporate Euro-MTN programmes, but this has only crept up to 5.19% this year. Dealers refuse to be pessimistic, however. "As the corporate sector takes off, more corporates will be happy about issuing regularly off their programmes rather than using them for one-off public deals," says one dealer. Not only do corporates get the thumbs up, so too do triple-B's. Last year only 28.57% of dealers believed that triple-B issuance would grow, but this year triple-B's get 51.52%of the vote. This is despite the fact that only 3.27% of non-syndicated debt has been issued by triple-B's in 2000. And Europe gets the most votes for growth region. Scandinavia, Greece, UK, France, Italy and eastern Europe all get a mention and overall Europe receives 79:f the votes. The US and non-Japan Asia only pick up 4ach and Japan receives 8 Investors Dealers were asked to predict how the investor base will change over the next 12 months. One says: "Investors are going to become more credit conscious and sophisticated in their search for yield premiums." But many dealers worry that an increasing focus on credit means a drop-off in structures. The dominance of plain vanilla was predicted by many houses. This is despite the fact that dealers report a slight increase in structured business. In 1999 41.7% of business was structured, according to the dealer survey. This year it is 43.32%. Dealers also think larger orders and more short-dated trades are future trends. But the vote is split as to whether European retail will become more prominent or not. However, dealers think that there will be a pick up in retail business from Japan. But regional banks in Japan are predicted to become less important. One house thinks that pension funds in Italy will be a driving force in the market. The market in 2000 It is perhaps not surprising that dealers had a good whine when they were asked what was the most disappointing aspect of the market this year. But the strength of their views was noticeable. "A quiet Easter," said one. Another was more forceful: "January and February were very, very quiet!" Other dealers pinpointed the problem. One dealer blamed "European investors," while another said, "If only European investors were buying more." The lack of both a thriving structured market and a credit market were highlighted as serious concerns. "Lots of public deals and poor mark-to-market performance has distracted investors from the private market," says a trader. And a Japanese house remarked on another important issue: "The decrease of investor demand in Japan due to the introduction of the mark-to-market accounting rule is disappointing." Though it was often investors who got the blame for the volatile market, issuers also came in for some criticism. "Issuers have been too opportunistic this year," says one dealer.

NEC Corporation has launched a jumbo convertible bond in the Japanese domestic market, raising ¥100bn of zero coupon funds with an issue that enjoyed tremendous demand from domestic and international investors. Daiwa SB Capital Markets was lead manager for the transaction and sold 30% of the paper into the Euromarket. The deal was more than 10 times covered, according to Koki Yakato, deputy general manager at Daiwa SBCM in Tokyo.

DEUTSCHE BANK has signaled its commitment to its M&A practice by taking Bob Cotter from Salomon Smith Barney in New York, Cotter was co-head of M&A at Salomon but will be head of Deutsche's global M&A practice. Deutsche Bank's M&A practice ranked 10th in the world last year in terms of announced mergers worldwide by dollar volume, but has dropped to 18th this year.

UK corporate, Diageo added a $1.5 billion US MTN facility to its financing arsenal on October 20, to access domestic retail investors (see MTNWeek, issue 153). Many European borrowers are keen to follow Diageo but this is a sector closely guarded by US issuers. And American buyers who traditionally look for top names could prove hard to please. Yet Diageo's $300 million fixed rate 10-year inaugural US MTN trade was announced within a week of signing. And the pricing level achieved was tight at 110 basis points over treasuries. Mike Turnbull, executive director and head of UK corporate coverage at Morgan Stanley Dean Witter (MSDW), the US programme arranger, says: "The issuer acted responsibly to ensure it introduced paper that investors wanted. But it was still able to achieve pricing well inside that of other single-A rated borrowers." Andrew Moorfield, director, corporate finance and capital markets at Diageo, has clear aims for the programme. He says: "Diageo wanted to increase the liquidity of its secondary paper and access second and third tier investors in the US. We hoped in signing the US facility we could diversify the funding base and our maturity profile, for example we had big gaps in the 2002 and 2003 maturities." But some dealers are sceptical as to whether US MTNs are a good option for non-US borrowers. One dealer says: "Many banks are not emphasising the yankee product to issuers, since rapid growth in the Euromarket is offering more arbitrage opportunities." And Ron Ross, director, debt capital markets at Merrill Lynch, says: "The advantage of issuing in Europe for European corporates is a lower fee structure than in the US." Diageo wanted a three- or four-year note for its inaugural, but found that the 10-year deal offered a better price and was what buyers wanted. Paper was sold to 40 retail investor accounts and half of the orders were for under $5 million, with one for $300,000. There are relatively few non-US borrowers with SEC-registered US MTN programmes, although it is steadily increasing. Northern Rock signed a $1 billion facility in May this year. Establishing a name in the market is the main concern for newcomers. Moorfield, at Diageo, believes the MTN trade was piggy-backed on the strength of Diageo's yankee and global bond issues which raised its profile in the US. He says: "There is a yankee premium for non-US borrowers but due to the frequency of Diageo's presence in the market and the success of its global bonds, the premium was diluted. European issuers should be encouraged to look at the market, which is deep and liquid - the premium could be worth it." Diageo was formed in December 1997 when Grand Metropolitan merged with Guinness. Among its many tasty products are Haagan Daz, Smirnoff and Burger King. Diageo, translated from Latin and Greek as everyday all around the world is an apt name, considering its extensive product distribution. Diageo's name may not be universally known in the US but Ross, at Merrill Lynch, believes its success in America is down to its brands. He says: "Diageo's main objective is to tap the retail investor base using the appeal of its well-recognised brand names." Despite being UK-based, Diageo's funding requirement is in dollars since the majority of its business is in the US. Moorfield, at Diageo, says that if the US facility meets the aim of investor diversification, then the ceiling will be raised and it will increasingly be used for funding instead of Diageo's $5 billion Euro-MTN programme. Yet Matthew Antoniou, debt capital markets manager at Diageo, emphasises this does not devalue the Euro-MTN shelf. He says: "Diageo's intention is not to be frequently accessing the market but to be a steady issuer off the Euro-MTN programme. It will continue to do relatively small trades and seek out discreet private placements, but always with aggressive pricing." Diageo has not ruled out trading in the Euromarket before the close of 1999. And Moorfield, at Diageo, says a $50 million US MTN will be issued in the next few weeks. Diageo sells itself as a flexible and sophisticated issuer, keen to meet investors' needs, which is crucial in the competitive US market. Antoniou, at Diageo, says: "Diageo is open to all structure ideas and will consider any type of note as long as the price is good. We can give an answer to our dealers within 24 hours." But Moorfield, at Diageo, adds: "Diageo is cash-rich and is not prepared to pay a premium to do a particular structure or lengthy maturity." Diageo had good demand for its first US MTN but if it issues more frequently it may have to compromise on levels, especially for short-dated deals. Yet Bob Bonefide, head of MTN and CP origination at MSDW in New York, says: "The US market is so large, deep and diverse it would be impossible for Diageo to reach saturation point. Even for GMAC and GE Capital, issuing billions of dollars-worth of debt, good pricing can still be achieved." He expects more European issuers will sign US programmes in 2000. Turnbull, at MSDW, says Diageo is equipped with a variety of funding vehicles in order to have flexiblity. He says: "Diageo is always reasonable in its expectations. Markets go in cycles and Diageo's pragmatic approach to funding means it won't dump money into a market that doesn't want it."

DLJ has hired a managing director from Salomon Smith Barney to head up its European telecoms and media group. David Diwik will start work at the London office in September. He will report to Joel Cohen, CEO of DLJ's European investment banking group, who is currently still based in New York.

Yesterday (Thursday), dollar swaps were trading very close to where they had been a week earlier. The 10 year mid-market was around 121bp over the 6.5% Treasury due 2010, while the five year was at 102bp over the 6.75% Treasury due May 2005. The 30 year swap was at 138.5bp over the long bond. Swap rates, meanwhile, are appreciably tighter. Yesterday, two year swaps were quoted as 6.98%-7%, against 7.1-7.12% at the beginning of the week. Five and 10 year rates were also about 10bp tighter, at 7.05-7.08% and 7.14-7.16% respectively.

Dow Chemical Company (Dow) has signed a $1 billion Euro-CP facility with Deutsche Bank as arranger. The dealers are Deutsche Bank and Citibank. It also has a $500 million Euro-MTN programme and two US CP facilities but has not issued off any of them to date. Dow is the second biggest US chemical company after DuPont and is in the process of buying its rival Union Carbide. The issuer's short-term ratings are P-1 from Moody's and A-1 from Standard & Poor's.

Competition in the Dutch housing sector is hotting up. When WSW signs its unlimited Euro-MTN programme in September (see MTNWeek issue 136) it will be the third debt facility for housing associations in the Netherlands. Dutch Housing Association Finance (DuHAF) signed a euro1 billion Euro-MTN facility earlier in the year, and in a crowded market is determined to stand out. But it has a battle on its hands. Valentijn Thijssen is the senior consultant in the treasury advisory group at DuHAF Holdings. He was pleased with the Euribor flat rate achieved in the inaugural trade, in June, and is optimistic that the next issue will be even tighter. He says: "It was not too sharp to scare investors but it was a good level compared with the local private placement market. It was important to show we can compete with these levels. And we are keen to prove that we can become cheaper." But Waarborgfonds Sociale Woningbouw (WSW) is chasing close behind. This programme is co-arranged by ABN Amro and Bank Nederlandse Gemeenten (BNG). WSW was founded in 1984 as a guarantee fund for Dutch housing associations. It guarantees the debt of 637 associations - 90% of the total number, including 13 within DuHAF's group. But while associations under WSW's facility will issue in their own name, notes from DuHAF's programme will be in DuHAF's name. A spokesman, at WSW, says: "Investors may view WSW as being in competition with DuHAF, because both entities will have Euro-MTN programmes. But we think the programmes complement each other, and that investors have a wider choice." Yet, Thijssen, at DuHAF, believes DuHAF's programme offers a superior service. He says: "One of our roles is informing the housing associations on how the market works. An association on its own would have to invest a lot of time to acquire the same level of knowledge that we provide. The BNG/ABN Amro programme is very different from our approach, because there is no central manager and information provider." Colonnade, the ING Barings arranged pass-through securities programme, offers further competition as a funding vehicle for housing associations. The facility was signed in April 1998, and two public issues of Fls325 million ($155 million) and $75 million were launched in June and November. WSW guaranteed the notes. DuHAF's programme is jointly arranged by Morgan Stanley Dean Witter (MSDW) and Rabobank International. Deborah Loades, Euro-MTN product manager, at MSDW, says: "There are three different methods for the housing associations to access the market. We believe the DuHAF route is the most attractive since it is the only one which combines the ability to issue opportunistically and strategically through a large, liquid issuing entity." In the early 1990s the central government privatized the social housing association system in the Netherlands. Until Colonnade and DuHAF signed facilities to issue in the Euromarket, the majority of funding for the associations had been met through the domestic private market. WSW has triple-A ratings from Moody's and Standard & Poor's. The same rating is applied to notes issued by the housing associations WSW guarantees, including those in DuHAF's group. A WSW spokesman says: "WSW is the safety net for investors. Investors don't have to worry about risk, or which housing association is more solvent than another, we take the burden." But, because WSW secures notes issued by so many associations, some more credit-worthy than others, it will not take the risk of complicated structures, swaps, or short maturities. DuHAF is restricted to issue only in guilders and euros and only notes longer than two years. Although it plans to negotiate better terms with WSW. It is increasingly important that DuHAF can offer flexible funding. Consolidation among housing associations is occurring rapidly and as the sector contracts and becomes more competitive DuHAF is keen to attract more associations. DuHAF only has its two arrangers as dealers but is open to reverse enquiry. DuHAF is owned by housing association shareholders so when it comes to closing a deal response times may be slow. Thijssen, at DuHAF, says: "If I have to round up lots of housing associations for a trade it takes more preparation and can be longer in the sorting out process." Although he goes on to say that if just one association is involved the turnaround could be within an hour. Eddy Villiers, head of new issues, Rabobank International, says: "The structure of DuHAF's programme is not the sort that will enable trades to come to market within a day. But the programme is for strategic not opportunistic issuance. The housing associations have specific funding needs and we have time to prepare and match investors' demands to those of the issuer." WSW has been delayed in signing its programme because there are several parties involved. But Douglas Grobbe, head of origination, Benelux, at ABN Amro, does not consider WSW will have any problems when it comes to trading. He says: "The housing associations are very used to the market. They have been issuing in the domestic market for many years and are used to the process. The only difference is that issuance comes off the Euro-MTN programme. It offers standardization for issuers and makes them more visible in the Euromarket." As competition in the sector increases it is possible that DuHAF, Colonnade and WSW will be forced to merge facilities to make issuance more efficient. However, Villiers, at Rabobank, thinks DuHAF's facility will be active and compete in its own right. He draws the comparison with other umbrella programmes. He says: "The bundling of the funding for municipalities or housing associations in this way will be extremely successful. It allows smaller entities to get greater status in the market and achieve better levels." And Thijssen, at DuHAF, shrugs off the challenge of competition. He says: "Apart from our zero solvency and our triple-A credit rating, DuHAF is an acknowledged and respected name. We can facilitate individual needs with small structured trades or with larger bonds, which we then split up, to get a better level for the issuers."

Croatia Lead arrangers Bayerische Landesbank (books), Citibank (books), Commerzbank (co-ordinator, books), Dai-Ichi Kangyo Bank (facility agent) and WestLB (documentation) have signed the Eu150m term credit facility for Zagrebacka banka dd.