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Despite some hectic trading on Wednesday, trading flows were thin this week and customers remained largely absent from the market. Prices moved little, especially by recent standards. At the beginning of the week, 10 year dollar swap spreads were at about 129bp to 130bp over the 2010 Treasury, while five year swap spreads were at 96.5bp to 97.5bp over the old 5.875% November 2004 Treasury.

Despite some hectic trading on Wednesday, trading flows were thin this week and customers remained largely absent from the market. Prices moved little, especially by recent standards. At the beginning of the week, 10 year dollar swap spreads were at about 129bp to 130bp over the 2010 Treasury, while five year swap spreads were at 96.5bp to 97.5bp over the old 5.875% November 2004 Treasury.

THE UK Treasury, which oversees the private finance initiative (PFI), used the programme itself two weeks ago, as UBS Warburg placed £127.79m of bonds to finance the renovation of the ministry's headquarters in central London. The transaction was launched without much publicity as the Treasury was keen to control press coverage itself, but details of the deal have now emerged.

The £250m facility for Airtours will be signed today (Friday), and has been increased to £300m. The loan is arranged by Barclays. The three year revolver offered a margin of 40bp over Libor, plus a utilisation fee of 5bp if more than 50% is drawn down.

* Council of Europe Development Bank Rating: Aa1/AAA

* Caisse Centrale du Credit Immobilier de France Rating: A1/A+/AA-

Widening secondary credit markets made life tricky for borrowers entering the primary market this week, but, despite little sign of the hostile environment abating, corporates continue to queue up to tap the euro market. Activity in the dollar market was heavily restricted by a trio of factors: the downgrading of finance company Finova; continued volatility on Nasdaq; and expectations of a 50bp rate increase at next week's FOMC meeting.

PREMARKETING of the jumbo Vodafone Pacific share placement began this week, despite the volatile global market conditions and the recent adverse sentiment towards Telstra, Australia's largest telecommunications company (see page 1). Bankers report that institutions are enthusiastic about Vodafone Pacific and its management but will be especially sensitive to pricing given the global mark down of telecommunications stocks in recent weeks and the continued concerns over the direction of Nasdaq.

France Lead arrangers JP Morgan and SG have launched the long-awaited $400m facility for Havas Advertising to syndication. The funds will be used to back the borrower's acquisition of Snyder of the US, to make it the fourth largest advertising company in the world.

Morocco Banks will bid next week for the long term debt financing solution for the Médi Telecom project. The debt will refinance two bridge facilities which fall due in August this year as well as raising additional capital for the continued build out of the borrower's GSM mobile telecoms network - the country's second such operator.

The £4.3bn acquisition facility for Air Liquide, which was signed in September 1999, is to be cancelled after the borrower's acquisition of BOC Group of the UK fell through -- but Air Liquide may shortly return to the loan market. The acquisition was a rare joint bid by the French company Air Liquide and Air Products and Chemicals of the US. But antitrust regulations, as dictated by the US Federal Trade Commission, have forced the acquisition to be called off. The loan, which was for the sole purpose of supporting the bid, and has not been drawn down, lapses unused.

Hong Kong Hong Kong International Terminals is tapping the market for a HK$5bn five year term loan through co-ordinators HSBC Investment Bank Asia and Citicorp International. The arrangers are forming a sub-underwriting group before proceeding with general syndication.