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Spreads remained under pressure across all markets this week, a situation exacerbated by US Fed chairman Alan Greenspan's hawkish comments in his Humphrey-Hawkins testimony. Greenspan suggested that the Fed would raise interest rates at the first sign of higher inflation. Although he signalled that an increase was not imminent, the market is now anticipating at least one more rate rise this year.

Market commentary: Compiled by Jim Webber,

ABN AMRO and Citibank have launched the $190m seven year deal for Canal Plus Polska, after minor alterations to fees. The borrower is looking for about $130m denominated in dollars, and the equivalent of $60m denominated in zloty. The highest participation level was first reported as 60bp for $15m, but co-arrangers now earn 60bp for taking $17.5m. Senior lead managers earn 50bp for $12.5, and lead managers earn 40bp for $7.5m.

Italian borrowers have been quick to seize the opportunities presented by the new euro bond market, launching a series of benchmark transactions this year in a bid to expand their investor base across Europe and beyond. The country's leading corporate and municipal borrowers have been among the most active debt issuers from Europe - headed, of course, by Olivetti, whose audacious takeover of Telecom Italia has heralded the new era of corporate restructuring and M&A activity that is set to transform Europe's industrial landscape and financial markets. Italian banks, increasingly focused on return on equity, are reluctant to keep lending at below-market rates and are encouraging their clients in the direction of the bond markets. And the burgeoning demand for credit products has ensured a warm welcome for established issuers and new borrowers alike. But borrowers have to be realistic in their pricing expectations if they are to transfer a strong domestic investor base into a strong pan-European investor base. As Eugénie Ballara reports, the days of cheap pricing - in the bank market and the bond market - are over. Italian corporate issuance in the international debt market has increased dramatically this year. Borrowers have moved quickly to take advantage of the replacement of their domestic lira market with the much broader and deeper euro bond market. Although many corporate issuers still have access to cheap loans, the rapidly growing level of M&A activity, a need to restructure debt and a desire to diversify their sources of funding is encouraging more and more companies to consider bond financings.

WITH ONLY a few weeks to go before the equity and equity linked debt markets close for the summer, Deutsche Bank (books) and ABN Amro Rothschild this week launched the Eu100m convertible bond for CSM, the Dutch producer of sugar and sugar products. The group, which was publicly floated in 1919, has a huge following in the local market with some 38% of its shares held by retail investors. While the bulk of its equity is in free float, 10% is held between ING Groep and local pension fund Algemeen Burgerlijk.

Roadshows began in New York on Wednesday for a $300m to $500m dated upper tier two capital raising by the Development Bank of Singapore (DBS). Representing a first of its kind from the city state, the prospective deal also marks the first truly internationally placed subordinated bank deal from Asia since a Siam Commercial Bank transaction in spring 1996.

JAZZTEL, the Spanish CLEC (competitive local exchange carrier) telecoms company, which is in the market for a Eu300m eight year deal, has received an eager reception from banks and the arrangers believe the loan will close oversubscribed. About 35 banks are approaching their credit committees on the deal following a bank meeting in Madrid. Potential investors were impressed with the management of Jazztel which is drawn from established Spanish telecoms companies Telefónica, Airtel and Retevision.

Offers have dried up in the US dollar swaps while bids continue to strengthen. By Thursday, the 10 year mid-market had climbed another 2bp or 3bp from last week's close and was quoted as 92bp. The five year mid point is about 76.5bp, while three years is at 65bp.

Croatia Banks with interests in eastern Europe can look forward to a syndicated loan for Hrvatske telekomunikacije dd, the Croatian state telecoms company, at the end of the year.