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US dollar swap spreads moved out sharply this week. By yesterday (Thursday), the 10 year swap was trading close to 90bp, more than 5bp wider than its closing price on July 10. The five year swap moved out to about 75.6bp mid-market, while the three year was at about 64bp. At the same time, corporate secondary spreads held their ground over the early part of the week and then firmed by about 1bp on Thursday - a day of considerable dollar issuance. Consequently, arbitrage to floating rate has improved appreciably over the course of the week, and underwriters should see some interest in opportunistic debt raising.

Argentina

US investors remained wary of Latin American this week, with even Pemex experiencing a slow response to a $1bn oil backed receivables issue it plans to launch next week. The offering, led by Morgan Stanley Dean Witter, will be broken into four tranches: one MBIA triple-A wrapped piece with an average life of 13 years, and three unwrapped triple-B rated portions with average lives of seven, 16 and 25 years.

A string of successful deals ahead of the summer break look set to improve the outlook for Germany's Neuer Markt after the disappointing performance of new issues in recent weeks. Among the deals attracting strong levels of interest is Dresdner Kleinwort Benson's sale of stock

US credit card bank MBNA appeared in the Euromarkets in two guises this week, selling Eu500m of bonds backed by US collateral through MAESTRO 6, and a £250m securitisation of its UK portfolio, CARDS 9. The US asset deal is MBNA's second in euros - at the end of April the bank became the first American institution to securitise in the single currency, with a Eu750m five year floater, lead managed by Credit Suisse First Boston.

Egypt General syndication of the $150m three year term loan for Commercial International Bank (Egypt) SAE is advancing smoothly.

n Investment bankers have been pitching for the sale of stock in Morocco Telecom. The deal is likely to raise around $1bn and will be the most important equity deal yet to emerge from the Middle East. The government is likely to appoint one local or regional firm to fulfil the home markets alongside one or two international investment banks to distribute stock to international buyers. The timing of the deal is undecided although the last quarter of this year or early next year look the most likely targets.

n Commerzbank AG Rating: Aa3/AA-

A string of successful deals ahead of the summer break look set to improve the outlook for Germany's Neuer Markt after the disappointing performance of new issues in recent weeks. Among the deals attracting strong levels of interest is Dresdner Kleinwort Benson's sale of stock

Paribas launched a highly unusual securitisation this week, parcelling 2,300 small business loans for Sodie SA, a subsidiary of French steelmaker Usinor whose mission is to promote employment in regions of France where the steel industry has contracted, putting people out of work. In the diversity of its exposure, the deal is most closely comparable to Deutsche's CORE collateralised loan obligation, which parcels very large numbers of loans to small and medium sized German businesses, and to Gerling Insurance Group's SECTRS transaction in March this year, which conveyed exposure to a reference portfolio of 92,000 European companies as a hedge for Gerling's credit insurance book.

PINAULT Printemps La Redoute is at last to tap the Euroloan market for a Eu1bn credit arranged by SG, Commerzbank and Crédit Mutuel. Proceeds are likely to be used for general corporate purposes including the refinancing of existing debt and most bankers think that they will not be used to finance the possible acquisition of Gucci.