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While the most melodramatic of millenarian fears have largely dissipated in the past few weeks, there is a great deal of uncertainty about the direction of rates and spreads in the new year and the great majority of US swap houses appear to be going into Y2K with flat positions. If there is a great deal of corporate issuance and much of it is unswapped, then spreads could spike up sharply as underwriters hedge unsold inventory with swaps. Fears of rate hikes could drive spreads higher as well and tempt end users to lock into fixed rate debt.

Egypt The $100m three year credit facility for Banque du Caire is fully subscribed according to arranger Sumitomo Bank. The arranger is still waiting on a couple of stragglers to build up an oversubscription.

* The Republic of Argentina may find accessing the dollar markets tough next year, given the fact that cross-over investors are less optimistic about the country's economic outlook than they are for other countries like Colombia, Mexico and even Brazil. Many cross-over investors are anchoring their decisions to extend Latin bond bets in strong economic fundamentals. Unfortunately for Argentina, it is still seen by many global fund managers as a country struggling to contain a fiscal deficit and meet large yearly funding requirements.

* Euro-MTS, the pan-European electronic trading platform for government bonds, has created a new division with the intention of listing high quality non-government bonds, starting with jumbo Pfandbriefe. The new division will be operational by early 2000. So far the only sub-sovereign bond to satisfy the strict criteria for qualification is the Eu5bn jumbo Pfandbrief for Allgemeine Hypothekenbank launched in late August.

Market report: Compiled by Glenn Blackley, RBC DS Global Markets, Australia. Tel: +61 2 9373 0431.

OFFICIALS FROM the Russian region of Nizhniy Novgorod last week secured investor support for the restructuring of a ING Barings-led $100m 8.75% October 2002 dollar Eurobond. Last Friday (December 10) 88.68% of bondholders voted to accept the restructuring terms proposed by the region - well in excess of the 75% minimum level of support required.

Canada Joint arrangers and underwriters Barclays Capital and Deutsche Bank have closed and signed a $100m credit financing for Agnico-Eagle Mine Ltd.

ABN Amro this week launched a $200m securitisation for project company Companhia Petrolífera Marlim, the proceeds of which will fund development of the Campo de Marlim oilfield off the coast of Brazil's Rio de Janeiro region. "We were looking to launch earlier this year," said a securitisation official at ABN Amro in London, "but in the third quarter Petrobras changed its accounting practices to US GAAP, so we had to wait. Once the paperwork was completed, we immediately launched the marketing process."

FOLLOWING THE successful sale of stock in the telecommunications group Thus in November by parent company Scottish Power, the UK market is braced for a variety of other telecom subsidiaries from industrial large majority owners. This week United Utilities said it intended to float off its own telecom subsidiary in an IPO which would see the shares initially listed in London, although this could be followed by a dual listing on a US market.

* Federal Home Loan Mortgage Corp Rating: Aaa/AAA

* Bank Nederlandse Gemeenten NV Rating: Aaa/AAA/AAA

The holiday season finally began to encroach on bond markets this week as issuance ground to a near halt ahead of the year end. That the market has remained open so long has surprised many bankers, with Y2K failing to bite - not yet, at least. Most syndicate managers were more concerned with co-ordinating Christmas parties than clashing roadshows as they had been earlier this year. And end of year bonuses are the numbers distracting many from economic data.