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DLJ has hired a managing director from Salomon Smith Barney to head up its European telecoms and media group. David Diwik will start work at the London office in September. He will report to Joel Cohen, CEO of DLJ's European investment banking group, who is currently still based in New York.

Yesterday (Thursday), dollar swaps were trading very close to where they had been a week earlier. The 10 year mid-market was around 121bp over the 6.5% Treasury due 2010, while the five year was at 102bp over the 6.75% Treasury due May 2005. The 30 year swap was at 138.5bp over the long bond. Swap rates, meanwhile, are appreciably tighter. Yesterday, two year swaps were quoted as 6.98%-7%, against 7.1-7.12% at the beginning of the week. Five and 10 year rates were also about 10bp tighter, at 7.05-7.08% and 7.14-7.16% respectively.

Dow Chemical Company (Dow) has signed a $1 billion Euro-CP facility with Deutsche Bank as arranger. The dealers are Deutsche Bank and Citibank. It also has a $500 million Euro-MTN programme and two US CP facilities but has not issued off any of them to date. Dow is the second biggest US chemical company after DuPont and is in the process of buying its rival Union Carbide. The issuer's short-term ratings are P-1 from Moody's and A-1 from Standard & Poor's.

Competition in the Dutch housing sector is hotting up. When WSW signs its unlimited Euro-MTN programme in September (see MTNWeek issue 136) it will be the third debt facility for housing associations in the Netherlands. Dutch Housing Association Finance (DuHAF) signed a euro1 billion Euro-MTN facility earlier in the year, and in a crowded market is determined to stand out. But it has a battle on its hands. Valentijn Thijssen is the senior consultant in the treasury advisory group at DuHAF Holdings. He was pleased with the Euribor flat rate achieved in the inaugural trade, in June, and is optimistic that the next issue will be even tighter. He says: "It was not too sharp to scare investors but it was a good level compared with the local private placement market. It was important to show we can compete with these levels. And we are keen to prove that we can become cheaper." But Waarborgfonds Sociale Woningbouw (WSW) is chasing close behind. This programme is co-arranged by ABN Amro and Bank Nederlandse Gemeenten (BNG). WSW was founded in 1984 as a guarantee fund for Dutch housing associations. It guarantees the debt of 637 associations - 90% of the total number, including 13 within DuHAF's group. But while associations under WSW's facility will issue in their own name, notes from DuHAF's programme will be in DuHAF's name. A spokesman, at WSW, says: "Investors may view WSW as being in competition with DuHAF, because both entities will have Euro-MTN programmes. But we think the programmes complement each other, and that investors have a wider choice." Yet, Thijssen, at DuHAF, believes DuHAF's programme offers a superior service. He says: "One of our roles is informing the housing associations on how the market works. An association on its own would have to invest a lot of time to acquire the same level of knowledge that we provide. The BNG/ABN Amro programme is very different from our approach, because there is no central manager and information provider." Colonnade, the ING Barings arranged pass-through securities programme, offers further competition as a funding vehicle for housing associations. The facility was signed in April 1998, and two public issues of Fls325 million ($155 million) and $75 million were launched in June and November. WSW guaranteed the notes. DuHAF's programme is jointly arranged by Morgan Stanley Dean Witter (MSDW) and Rabobank International. Deborah Loades, Euro-MTN product manager, at MSDW, says: "There are three different methods for the housing associations to access the market. We believe the DuHAF route is the most attractive since it is the only one which combines the ability to issue opportunistically and strategically through a large, liquid issuing entity." In the early 1990s the central government privatized the social housing association system in the Netherlands. Until Colonnade and DuHAF signed facilities to issue in the Euromarket, the majority of funding for the associations had been met through the domestic private market. WSW has triple-A ratings from Moody's and Standard & Poor's. The same rating is applied to notes issued by the housing associations WSW guarantees, including those in DuHAF's group. A WSW spokesman says: "WSW is the safety net for investors. Investors don't have to worry about risk, or which housing association is more solvent than another, we take the burden." But, because WSW secures notes issued by so many associations, some more credit-worthy than others, it will not take the risk of complicated structures, swaps, or short maturities. DuHAF is restricted to issue only in guilders and euros and only notes longer than two years. Although it plans to negotiate better terms with WSW. It is increasingly important that DuHAF can offer flexible funding. Consolidation among housing associations is occurring rapidly and as the sector contracts and becomes more competitive DuHAF is keen to attract more associations. DuHAF only has its two arrangers as dealers but is open to reverse enquiry. DuHAF is owned by housing association shareholders so when it comes to closing a deal response times may be slow. Thijssen, at DuHAF, says: "If I have to round up lots of housing associations for a trade it takes more preparation and can be longer in the sorting out process." Although he goes on to say that if just one association is involved the turnaround could be within an hour. Eddy Villiers, head of new issues, Rabobank International, says: "The structure of DuHAF's programme is not the sort that will enable trades to come to market within a day. But the programme is for strategic not opportunistic issuance. The housing associations have specific funding needs and we have time to prepare and match investors' demands to those of the issuer." WSW has been delayed in signing its programme because there are several parties involved. But Douglas Grobbe, head of origination, Benelux, at ABN Amro, does not consider WSW will have any problems when it comes to trading. He says: "The housing associations are very used to the market. They have been issuing in the domestic market for many years and are used to the process. The only difference is that issuance comes off the Euro-MTN programme. It offers standardization for issuers and makes them more visible in the Euromarket." As competition in the sector increases it is possible that DuHAF, Colonnade and WSW will be forced to merge facilities to make issuance more efficient. However, Villiers, at Rabobank, thinks DuHAF's facility will be active and compete in its own right. He draws the comparison with other umbrella programmes. He says: "The bundling of the funding for municipalities or housing associations in this way will be extremely successful. It allows smaller entities to get greater status in the market and achieve better levels." And Thijssen, at DuHAF, shrugs off the challenge of competition. He says: "Apart from our zero solvency and our triple-A credit rating, DuHAF is an acknowledged and respected name. We can facilitate individual needs with small structured trades or with larger bonds, which we then split up, to get a better level for the issuers."

Croatia Lead arrangers Bayerische Landesbank (books), Citibank (books), Commerzbank (co-ordinator, books), Dai-Ichi Kangyo Bank (facility agent) and WestLB (documentation) have signed the Eu150m term credit facility for Zagrebacka banka dd.

Electrolux has redenominated its $1 billion global MTN programme to euro1 billion ($941.44 million). Credit Suisse First Boston and JP Morgan have been dropped as dealers while ABN Amro and Morgan Stanley Dean Witter have been added, alongside Salomon Smith Barney (see MTNWeek, issue 190)

Ecuador appears to have beaten investors into submission with its debt restructuring proposal to swap $6.65bn in defaulted Bradys bonds and Eurobonds for $3.95bn of new 12 and 30 year global bonds. After roadshows in New York and London this week, Ecuador was on track to attain the 85% investor approval it needs for the restructuring to go ahead. Ecuador's success, however, was more the result of coercion than negotiation. If 50% plus one of the current bondholders vote in favour of the exchange, then that will result in the dissolution of certain terms on the current bonds, making it a worse bet for bondholders who do not vote in favour.

Mexico ? Grupo Televisa SA

Erdoelbevorratungsverband (EBV) set out its stall in the private market last week, by issuing a euro25 million ($24.57 million) 30-year CMS-linked note. The borrower achieved a tight sub-Libor price due to its triple-A rating and status as a quasi-state entity. But with eight other German borrowers holding top ratings, competition is hotting up. EBV may have to be increasingly adventurous in its issuance to keep a foothold in private placements. EBV has been lucky in that investor appetite for its paper has been strong since it signed its euro2 billion programme on 13 September, last year. But its funding requirement off the facility in 1999 was low and it had the luxury of being able to wait five months for the right opportunity. Westdeutsche Landesbank (WestLB) was the quickest dealer off the mark with a trade for EBV. It was lead-bookrunner off its inaugural which will settle on September 29 2000. Hans Joachim Von Hanisch, head of Euro-MTNs at WestLB in London, explains why the deal was transacted so far in advance. He says: "The trade was driven by demand from pension funds in Europe which were keen to invest in the 30-year category and wanted forward purchase of bonds in September." Sanders Schier is on the board at EBV and is responsible for its financing. He says EBV will focus on the private market in 2000 since that is where he believes it will get the best levels. EBV has issued schuldschein for 21 years and intends to continue to rely on this source. As a result the funding target off its Euro-MTN shelf this year is relatively small at euro250 million, so Schier thinks a public issue would probably not suit EBV's strategy. He explains: "We have certain dates when refinancing is due but we know that it is unlikely investors will be there then. So we have a permanent buffer zone of euro100 million. If a dealer comes to us with a trade of up to euro50 million per tranche and it is an attractive offer then we will do it." EBV is responsible for importing, storing and maintaining emergency oil reserves within Germany. It was set up in 1978 by the government through its oil stockholding law because Germany is 98% dependent on imported oil. EBV doesn't need government approval for every note traded, but its link to the state does mean it is limited in what it can issue. Yet, borrower flexibility is essential as competition heightens and investors take the driving seat. Schier, at EBV, is aware that even triple-A rated issuers have to play into buyers' hands. He says: "For the time being we are limited to issuing in euros as a conservative approach. While targets can be achieved in euros we will continue to issue in the currency. But the programme allows for issuance in other currencies and I think this will be one of the next steps." Some banks are concerned that EBV is ignoring the potential for quality funding in other areas. An official at Deutsche Bank in Frankfurt, arranger off EBV's facility, says: "The tight pricing and the fact that EBV is restricted in the currencies and structures it is open to could be a problem. Japanese investors have shown interest in the name, but they can only buy in yen. EBV could play on many more possibilities but there is work to be done." EBV believes it will have no problem standing out from the crowd. Its state support makes it extremely stable since the law protects it from changes in the market price of its oil reserves and it is forbidden to ever sell at a loss or be bankrupt. Schier, at EBV, emphasises that EBV's debt is highly attractive to risk-adverse investors. Also, as a corporate, it offers diversification from the usual set of triple-A rated banks. He says: "EBV's 20% risk weighting in addition to Standard & Poor's triple-A rating, its government backing and the security of the law which does not allow EBV to go bankrupt, means it can position itself strongly in the market as a superior credit to compete with other issuers in its peer group." Triple-A rated Kreditanstalt fur Weideraufbau (KfW) issued $9.44 billion off 70 non-syndicated trades in 1999. Frank Czichowski, head of capital markets at KfW, believes that in a rapidly changing market borrowers can't afford to be rigid in their style of funding. He considers that KfW's success comes from being alert to market dynamics and being fast to react. He says: "There are more issuers coming to the market so competition is clearly growing. For triple-A borrowers providing liquidity for investors is one of the main issues. Speed and flexibility are also priorities. Often investors want to express a certain view on the market or want something specific. Issuers have to be quick in responding to these particular needs." One of EBV's aims is to increase its recognition in the market. Von Hanisch at WestLB, says: "EBV is keen to raise its profile and increase attention on its credit since it has an on-going need for private placements." But the new borrower did not use the traditional route of a public debut issue to get its name known so it has its work cut out. Yet Schier at EBV, has full confidence in his chosen panel of banks. He says: "We selected eight banks which we know have strong national and international coverage and can reach the investors we want to target. We are willing and happy to visit investors on an individual basis, but we think it is more valuable to concentrate on keeping up contact with dealers."

Eicsson's treasurer Vidar Mohammar gives his opinions on competion and online trading in the MTN market... Q. How has your borrowing strategy changed as the market has become more credit aware? A. Not really. Ericsson is pretty well known already. We are borrowing at much the same levels as we were a year ago. Q. How do you reassure investors about your credit? A. We have had the same rating for such a long time that it is not an issue. The market sees us as a pretty good credit. Q. How important is it to be a pan-European household name in selling your story? A. Being a household name absolutely makes life easier. Investors already know who you are when you go out and roadshow. Q. What percentage of your investors are non-domestic? And how does this compare to a year ago? A. The majority of our investors come from outside Sweden and this has not changed. Q. What sort of structures are investors interested in buying from you? A. They are interested in all sorts of structures but we mainly issue plain vanilla. If the pricing is right we will do equity-linked deals. Q. How do you feel about the market going online? Are you happy for your levels to be posted on a screen that everyone can access? A. We are happy to post our levels if we are issuing, but if we are not issuing it is a waste of time. Q. Do you think borrowers' relationships with their dealers will suffer as a result of online trading? A. It's just another way of issuing. It is not replacing other ways of issuing, it is complementing them. It is useful for reaching institutional investors. Q. How do you see the market developing in 2000? A. It will be more common to go online. This should push pricing down, which is good for borrowers and investors.

? Bancaja International Finance Guarantor: Caja de Ahorros de Valencia, Castellon y Alicante (Bancaja)

Eridania Beghin-Say's manager, capital markets, Paolo Falcone gives his views on online trading and competition in the MTN market... Q. How has your borrowing strategy changed as the market has become more credit aware? A. EBS' strategy has not changed a lot. We use our Euro-MTN programme opportunistically as a way of lowering our funding costs. And though in the last months of 1999 the costs of borrowing were higher, we tried to stick to our targets. Q. How do you reassure investors about your credit? A. We have explained our situation. Being in the agri-business is very cyclical. We were rated A- by Standard & Poor's and were downgraded in October 1999. But we are now a very strong triple-B+. After the downgrading we reviewed our targets. Q. How important is it to be a pan-European household name in selling your story? A. While in France and Italy EBS has very good name recognition, in some other European countries our brands are better known. For instance, our olive oil brand, Koipe, is the leading olive oil in Spain. Q. What sort of structures are investors interested in buying from you? A. Almost all our transactions are structured but we swap all our trades into floating rate. Structured notes are currently a good way of hitting our targets. If we understand the risk we will look at credit-linked, currency-linked or equity-linked. Q. How important is it for you to be a frequent borrower, able to build your own yield curve as triple-As can? A. We have not used our programme to issue public bonds. We have not issued any bonds since 1998. We have set up targets for three to 10 years for our programme and we issue frequently but in small amounts. We like to tell the market that we are here. Q. How do you feel about the market going online? Are you happy for your levels to be posted on a screen that everyone can access? A. We are thinking of posting our levels online with dealers who may be interested, including Warburg Dillon Read (WDR). But we will not do this in the short-term. We prefer only some dealers knowing our targets. When we change our targets we tell the dealers we are working with. Seeing other people's levels could be interesting and allows you to see where you are compared to the rest of the triple-B's in the market. Q. How do you see the market developing in 2000? A. The market will be more active on both sides. There will be opportunities for corporates and investors. Our Euro-MTN programme provides us with a good source of funding. It does today and it will tomorrow.