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The 25bp rise in the US Fed funds rate announced after the FOMC meeting on Tuesday set a constructive tone across all the markets, giving most participants confidence that rates will not be increased again before the end of the year. After several months of volatility, some semblance of stability returned to the dollar sector and a rally in corporate spreads allowed Wells Fargo to increase its global transaction to $1.5bn from $1bn. The deal, evenly split into two tranches of a two year FRN and a three year fixed rate bond, was led jointly by Bear Stearns and Morgan Stanley Dean Witter.

Bear Stearns and Morgan Stanley Dean Witter were joint lead managers for Wells Fargo's $1.5bn two year floater and three year bullet. The floating rate tranche was priced to yield Libor plus 20bp at the re-offer and the bullet tranche was priced at the tight end of expectations to yield 91bp over the off-the-run 6.25% August 2002 Treasury. The borrower was last week talked of as wishing to swap the three year tranche into floating; although the borrower could not be reached for comment, more than one shop confirmed that Wells Fargo had been asking for three year bids on Tuesday afternoon.

The equity new issue pipeline is filling up fast after the summer lull, with bankers hopeful that this week's interest rate move in the US will provide a helpful boost to market conditions. Issuers and underwriters are eager to get their deals into the market as quickly as possible, conscious that the primary market is likely to shut down completely from late November because of Y2K concerns.

The 25bp rise in the US Fed funds rate announced after the FOMC meeting on Tuesday set a constructive tone across all the markets, giving most participants confidence that rates will not be increased again before the end of the year. After several months of volatility, some semblance of stability returned to the dollar sector and a rally in corporate spreads allowed Wells Fargo to increase its global transaction to $1.5bn from $1bn. The deal, evenly split into two tranches of a two year FRN and a three year fixed rate bond, was led jointly by Bear Stearns and Morgan Stanley Dean Witter. The EIB issued a rare Eurodollar transaction - a $750m five year bond at 60bp over Treasuries, lead managed by Deutsche and Nomura. The leads cited strong European and Asian central bank demand as the rationale for launch but syndicate members remained sceptical. Dollar buying outside the US remains very thin and the EIB deal is considered unlikely to perform until retail take up the bonds in the next several weeks. Activity in euros was much more boisterous with issuers rushing to get into the market before the traditional September scrum. AHB's record Eu5bn Pfandbriefe dominated, and expected issues by DePfa (Eu3bn to Eu5bn) and Rheinhyp (Eu2bn to Eu3bn) are creating oversupply concerns in the Pfandbriefe sector. The only benchmark corporate bond to be launched proved to be the star performer of the week. The long awaited Eu2bn five year bond for German telecoms group Mannesmann sold out quickly at a generous re-offer spread of 75bp over the Bund, tightening some 3bp by Thursday's close. The success of the deal has done much to improve the company's capital markets image, dented by the volatile performance of its two previous bonds. A mandate for Volvo's Eu2.5bn financing is being fiercely fought over with several houses in the frame to bring the issue, expected to comprise floating rate and fixed rate tranches. Another hotly contested mandate is for the Eu1bn 10 year issue by Suez-Lyonnaise. BNP and Paribas are considered front runners for the deal which will be a debut benchmark bond for the giant French utilities group. A decision by the company is expected to be announced today (Friday). French computer company Bull announced plans to raise Eu100m to Eu150m in the international market next week. BNP and Banque CPR will lead manage the issue which will be structured with a four year maturity and put option after two years. It will be Bull's first international debt offering. Air Liquide, however, has postponed its planned euro issue until next year. Two Spanish utilities are eyeing the euro sector. Gas Natural is said to have mandated Merrill Lynch to lead manage the inaugural trade off its Euro-MTN programme. The issuer, which was recently rated, is thought to be planning a Eu300m-Eu500m bond for the end of September or early October. Water company Aguas de Barcelona is also seeking ratings with a view to launching its international markets debut. Market participants speculate that a fund raising exercise could be connected with the forthcoming privatisation of Madrid water company Canal de Isabel Segundo. In the agency sector, KfW is to launch its third global bond transaction early next week via Deutsche and Dresdner Kleinwort Benson. The deal will mature in January 2010 and will be for a minimum of Eu2bn. The market expects a spread of around 40bp/42bp over the July 2009 Bund. Forthcoming financial deals include a Eu500m five year bond by SNS Bank Nederland which is due for launch next Tuesday. Bayerische Landesbank, CDC Marchés and SNS Financial Markets have been mandated as joint bookrunners. Spread talk is in to 23bp to 25bp over euribor range. And, if market conditions are right, Household is likely to launch a five year euro issue next week while HypoVereinsbank will start bookbuilding for a Eu1bn 10 year transaction to be led by HVB, Paribas and Warburg Dillon Read. Market spread talk for the issue is in the 70bp to 75bp range. n

A Brazilian mandate for a Eu500m seven year benchmark was the focus of fierce competition among underwriters this week, with some houses attempting to drum up investor support for a yield as thin as 10.5%. Rivals said ABN Amro, which upset the market last week with an aggressively priced deal for Brazilian development bank BNDES, has been sounding investors out on whether they would accept a seven year offering for Brazil at just 10.5%, when its dollar denominated five year benchmark, maturing 2004, is yielding 14.67%.

ABN Amro and Warburg Dillon Read will launch a roadshow for the sale of San Miguel's (SMC) A$1.3bn stake in Coca-Cola Amatil (CCA) next week. Jardine Fleming - which had been expected to lead the sale with ABN Amro when Euroweek revealed the sale plan in June - is not in the deal, for which there is no syndicate. Bank officials declined to comment.

Thailand will be in the running to reopen the Asian equity markets after the summer lull with three issues set to test the appetite for paper from the country. Siam Cement and Thai Farmers Bank look set to launch in two weeks' time, with Thai Military Bank possible a week later, according to bankers.

The integrity of the emerging market Brady bond and Eurobond markets was thrown into jeopardy this week when Ecuador announced it would not be paying a $96m Brady bond coupon payment and said it would instead restructure its $6bn Brady debt.

Lesser rated central and eastern European sovereigns face the prospect of an uncertain exile from the international bond markets after B3 rated Ecuador this week announced that it is to restructure its Brady bonds. Among those countries considered most likely to be affected by the fall-out from Ecuador's debt crisis are Kazakhstan and Romania.

Europe n European Loan Conduit No 1 BV