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* DePfa Rating: Aa3/AA

DOLLAR swap spreads began to sag from the first moments of the week's business as, on Monday morning, it was clear that the week ahead would see considerable dollar-denominated issuance, much of which would be swapped out of fixed dollars. Consequently, in the first session of the week, the 10 year mid-market contracted to below 77bp and the five year midmarket softened to 63bp.

CSFB AND Cazenove have been appointed by UK electrical retailer Dixons to explore the possibility of seeking a stockmarket flotation for Freeserve, its internet service provider. The two banks will consider the option of a listing in addition to "strategic alternatives available to Freeserve to realise its full potential". The spin-off of Freeserve has been expected in the market for some time and the two investment banks will look at the best way to maximise shareholders' valuation of the group.

VOLKSWAGEN and Dresdner Bank have become the latest German blue chips to announce plans for large capital increases, adding to an already full pipeline of new issues in Germany over the next few months. Dresdner joins its three largest domestic banking rivals -- Deutsche Bank, Commerzbank and HypoVereinsbank -- in looking to raise new equity capital that will put around Eu8bn in new equity on the Frankfurt stockmarket.

Czech Republic The City of Prague has awarded a joint mandate to ABN Amro and Deutsche, to arrange a funding package consisting of a Eu200m 10 year bond, preceded by a Eu100m bridge loan for between three and six months, probably priced around 30bp over Libor.

* Bayerische Handelsbank Rating: AAA

EUROPÄISCHE Hypothekenbank der Deutsche Bank will soon launch the largest ever mortgage Pfandbrief transaction, a Eu2bn global which is set to boost the product's status on the international markets. Whereas public (Öffentliche) Pfandbriefe have been widely marketed outside Germany, mortgage (Hypotheken) Pfandbriefe have remained a domestically oriented product.

THE Eu180m one year term loan for Türkiye Garanti Bankasi was signed in London on Friday, April 9. The facility was increased from Eu140m after a heavy oversubscription. The deal has a margin of 55bp over Euribor, with co-arrangers taking 70bp flat for commitments of Eu9m. The top fee in general syndication is 65bp flat for managers taking Eu7.5m

THE RESURGENCE in the sterling sector of the high yield market continued this week, with further supply provided by the launch of a £100m issue for engineering components manufacturer Doncasters. Officials at lead manager Credit Suisse First Boston said that the issue, one of the highest rated junk bonds ever launched in the European market at Ba2/BB, was more than two times oversubscribed.

THE ARRANGING group of a jumbo credit facility for LVMH will emerge over the next week as the French brandy-to-luggage company closes in on its target Gucci. Most observers expect the group to consist of ABN Amro, Chase Manhattan, Citibank, Credit Suisse First Boston. The absence of the French banks is due to the conflicting nature of the takeover -- Gucci, LVMH and Pinault-Printemps Redoute (PPR) all have French banks as traditional lenders.

ARRANGERS Chase Manhattan, Credit Suisse First Boston, Deutsche Bank and SG have launched the $2bn 364 day revolving credit for Glencore International to arrangers and co-arrangers. Once these levels have been completed, general syndication will be launched. Senior lead managers will be offered 10bp for $75m, lead managers 8bp for $50m and managers 6bp for $25m.

THE BOOK of demand for Software AG, the German systems software company, is coming together well after one week of marketing. The deal will be completed at the end of next week, with early indications pointing to a successful offering -- particularly among international institutional investors. The IPO is being run by HypoVereinsbank and Commerzbank in the local market, and Lehman Brothers in the international tranche. This week bankers reported that demand from the local market, while building steadily, has not been as frenetic as in some recent hi-tech deals from the Neuer Markt. The lead managers indicated a price range of between Eu31 to Eu37 and grey market trading has been observed at between Eu33 and Eu36. Investors in Switzerland and the US appear to be particularly keen, with large and firm orders coming from both areas.