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The successful and straightforward completion of a maiden international bond offering by the Export Import Bank of China (Chexim) yesterday (Thursday) provided an important marker of the momentum building behind China Telecom's (CT) much anticipated debut. Scheduled to price on October 28, CT's five year SEC registered global has already garnered a massive, albeit price sensitive book in advance of roadshows which began in the US on Thursday.

UK food and drinks group Diageo has added a $1.5bn US MTN programme to its funding armoury. Arranged by Morgan Stanley Dean Witter, it will facilitate access to the US bond market where Diageo has already established a healthy investor following. Diageo is planning to inaugurate the programme next week with a two to three year $350m fixed rate issue.

Irish telco Esat Telecom has priced a Eu175m high yield bond through its indicated price talk in an impressive demonstration of the demand generated by the deal. Lead managed by Chase Manhattan and Credit Suisse First Boston the offering was more than four times oversubscribed with orders totalling over Eu800m.

Irish telco Esat Telecom has priced a Eu175m high yield bond through its indicated price talk in an impressive demonstration of the demand generated by the deal. Lead managed by Chase Manhattan and Credit Suisse First Boston the offering was more than four times oversubscribed with orders totalling over Eu800m.

Weak stockmarkets offered bonds their first support for some time this week as nerves about the valuation of US stocks and the recent rise in bond yields prompted flows into government bond markets. Having already risen to two year highs and with no new data adding to inflationary fears, a window of stability induced several borrowers to test the market. Ford Motor Credit launched its scheduled 10 year bond off its Global Landmark Security (GlobLS) programme. The $5bn transaction, issued at the tight end of the spread talk, attracted over $8bn of subscriptions from investors hungry for high grade liquid paper. The dollar market at the end of the week was dominated by Fannie Mae's announcement of its monthly calendar for its issuance of Benchmark Securities for the year 2000. Each maturity in the calendar has scheduled announcement, pricing and settlement dates, making the agency's debt closer than ever to its status as a Treasury surrogate. Separately, Fannie is said to be reopening its recent 10 year line in the near future. Volatility in credit markets erupted, however, when Mannesmann announced its Eu30bn take-over of Orange. Mannesmann's May 2009 deal widened 37bp over the week and the whole euro telecoms sector was repriced around 10bp to 15bp wider. Tobacco credits were also hit by news that cigarette companies would not be shielded from punitive damages in the Florida litigation action. The Philip Morris April 2006 euro widened 20bp, while BAT's February 2009 issue widened 19bp. But, the spread widening failed to hit new issuance in euros. Cofiroute provided the deal of the week, a Eu300m 10 year blow out priced at 50bp over OATs. The deal quickly tightened to 48bp over. DaimlerChrysler and Fiat took advantage of higher short term rates and investors' defensive stance to offer successful three year bonds. And Birka Energi demonstrated that the market is still open for well prepared triple-B credits with the smooth launch of a Eu500m seven year transaction. The Rabobank Group is set to issue hybrid tier 1 securities via lead managers Merrill Lynch and Warburg Dillon Read. Rabobank Capital Funding Trust, a US finance company, will be the issuing vehicle for the securities, proceeds of which will be used to finance Rabo's activities in the US. The euro denominated issue will be rated Aa1/AA, providing investors with a very rare opportunity to buy double-A rated tier 1 securities. Recent tier 1 issues for Deutsche and Dresdner were single-A rated. The deal is expected to carry a fixed coupon of 6.875% although some market participants believe that 7% will be needed to clear the transaction. Launch is expected in the next two weeks. Staples Inc, North America's second largest office products retailer, will next week roadshow a Eu200m five year transaction. Goldman Sachs has been appointed bookrunner with Salomon as joint lead. Staples is rated Baa2/BBB-. British retailing and leisure group Littlewoods is looking to raise £150m in the international bond markets. The privately-owned company has appointed Barclays Capital and Greenwich NatWest to lead manage the issue which is expected to have a 10 to 12 year maturity. German corporate Dyckerhoff's planned issue of Eu250m to Eu300m bond via Dresdner is likely to be a five year fixed rate deal priced at between Euribor plus 70bp to 80bp. Meanwhile Kugelfischer is set to opt for a Eu150m to Eu200m seven year deal priced at Euribor plus 85bp to 95bp, also via Dresdner. Sampdoria launched a novel Eu3.5m issue linked to the performance of the Italian football club. The bonds carry a minimum return of 2.5%, but should the second division team rise to the heights of Italian football and qualify for the Champions League, investors will be rewarded with a 14% coupon. Italian paper company, Cartiere Burgo is planning to launch a Eu200m five year floater next week via lead manager Mediobanca. Spread talk is 65bp to 70bp over Euribor. And Portuguese bank Montepio Geral will bring a Eu300m five year floater via ABN Amro and Merrill Lynch. n

Weak stockmarkets offered bonds their first support for some time this week as nerves about the valuation of US stocks and the recent rise in bond yields prompted flows into government bond markets.

Fannie Mae took the ultimate step this week in establishing its Benchmark Securities as US Treasury surrogates by announcing a monthly calendar for its year 2000 issues of bullet benchmark notes and bonds. In an unprecedented move, the company has scheduled the announcement, pricing and settlement dates for all of the stated maturities in the calendar.

There was significant dollar denominated issuance this week, but it had little impact on swap spreads. At the end of the week, 10 year spreads were at about 89.5bp over the August 2009 Treasury - exactly where they had been last Thursday. The five year mid market was at 75.75bp and the three year was at 71.5bp.

Mannesmann sent European institutional investors reeling from the euro corporate bond market this week as its £19.8bn (Eu30bn) bid for Orange and likely move from an A2/A to a triple-B credit prompted a dramatic repricing of telecoms credits.

Europe's growing municipal market is set to welcome yet another new name with the signing of a Eu500m Euro-MTN programme for the Italian region of Marche. Located in central Italy, Marche is a small but prosperous region which has until now fulfilled its financing needs in the domestic bank market.