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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.

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.

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.

THE DEBT package backing the long mooted leveraged buy-out of Friedrich Gröhe finally emerged this week, as lead arrangers Dresdner Bank Frankfurt and HypoVereinsbank at last took the plunge and launched the deal to co-arrangers. Banks are offered tickets of DM125m for a fee of 87.5bp or DM75m for a fee of 67.5bp. Compared to the Ineos Acylics and the Accordis deals in the UK, the fees appear light.

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.

RUMOURS CONCERNING France Télécom's plans for the loan market persist thanks to the French telecom group's latest German acquisition. On Monday it paid Eu7.4bn for a 60.25% stake in E-Plus Mobilfunk put up for sale by Vega and Viag, only two weeks after its purchase of Vodafone AirTouch's 17.24% stake in E-Plus.

GMAC Canada issued a $200m Euro-MTN due January 2005 via Merrill Lynch and ABN Amro. Swap market sources close to the borrower said that the proceeds of the issue had been swapped to Canadian dollars. A treasury spokesman for the borrower confirmed that this was the case, but declined to elaborate on whether the ultimate destination was floating or fixed. The notes yielded 7.06% all-in, and swap bids to January 2005 were about 6.75%. This suggested a cost in floating US dollars of about Libor plus 30bp or more.

Market commentary:

Funding officials from the Republic of Hungary were soliciting bids this week for a euro issue designed to pre-fund some of the Baa1/BBB/BBB rated sovereign's 2000 liabilities. Hungary completed its $1.9bn overseas bond funding target for this year by the early June, following the launch of two euro denominated Eurobonds and one dollar denominated global bond.

India Potential sub-underwriters have been approached by arrangers ANZ Investment Bank and HSBC to join the offshore senior debt facilities for the $1.4bn Vizag power project in Andhra Pradesh.

The State of Israel broke new ground for the Middle East this week when it became the first sovereign from the region to tap the sterling bond market. In an opportunistic piece of financing the A3/A-/A- rated borrower raised £100m of 35 year money through a private placement solely lead managed by Warburg Dillon Read.

Brazil ABN Amro Bank NV, Bank of America and WestLB have been mandated to arrange a refinancing to replace the $1.75bn two year term loan for BellSouth Telecomunicaciones-Brazil (BCP) in March 1998. That deal was arranged by eight banks: Merrill Lynch, JP Morgan Securities, ABN Amro Bank, BT Alex Brown, Chase Securities, Nationsbank, Wachovia Bank and WestLB.