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FREDDIE Mac will announce details of its Callable Reference Note programme today (Friday) as the global market for callable product quickly gathers pace. The US agency's formal announcement comes a week after the launch of its first callable reference issue which, together with the first two issues from Fannie Mae's own Callable Benchmark Note programme, should establish the callable asset class as a fixture in the global bond markets -- much like the two agencies' bullet issuance programmes.

Market commentary Compiled by Jim Webber, TD Securities, London, Tel: +44 171 282 8216

CITIBANK has won the mandate to arrange a $1.5bn revolving credit for Zurich Financial Services and Zurich Insurance Company that will refinance a $1bn 364 day credit first established in 1997. The loan has a maturity of five years and a margin of 20bp over Libor. A utilisation fee of 2.5bp is available if more than 50% of the credit is drawn and the commitment fee is 9bp.

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Chile's state-run Codelco, the world's biggest copper producer, became the first Chilean borrower to follow the sovereign's blowout debut last week when it launched its own inaugural offering of $300m of 10 year bonds. The A- rated 144A deal, led by Morgan Stanley Dean Witter, was priced yesterday (Thursday) to yield 7.377% or 217bp over Treasuries, in the middle of its 215bp to 220bp price talk range, after attracting $540m of orders.

* Stadtsparkasse Köln Rating: Aa3

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SPRINT Capital Corp and Delphi Automotive Systems stole the limelight in the US corporate bond market this week with respective $3.5bn and $1.5bn blow-out global bonds that took advantage of a continued investor thirst for high yielding triple-B rated bonds. Demand for the Baa1/BBB+ rated Sprint Capital Corp bonds was such that underwriters Warburg Dillon Read and Salomon Smith Barney increased the size of the deal from $3bn to $3.5bn and priced all of the five, 10 and 20 year tranches at the tighter end of the spread range.

THE STEADY flow of new issues continued in the dollar market this week and, under this inexorable pressure, dollar swap spreads have waned. By Thursday, two year spreads were down to about 43bp, while five year spreads were at 61bp and 10 years were 71.25bp. These prices are at least 3bp tighter than at the end of last week. Short end spreads are now at -- or very close to -- the levels they held before the explosion in the credit markets at the end of last summer. At that end of the curve at least, spreads appear to be at the bottom of the trading range.

Lithuania Syndication of the Eu55m two tranche loan for Vilniaus Bankas has closed oversubscribed and the credit will be increased to Eu75m. It will be signed on May 5.