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Market commentary: Compiled by Jim Webber,

French retailer Carrefour boosted its standing with European investors this week with a Eu750m five year deal which withstood from the slew of problems plaguing the corporate market. While many banks have struggled to find buyers willing to place orders for new issues and seen the spreads on deals widen as a consequence, bookrunners Paribas and JP Morgan found takers for their allotments before launch and correctly sized and priced the Carrefour issue to ensure a stable aftermarket performance.

French retailer Carrefour boosted its standing with European investors this week with a Eu750m five year deal which withstood from the slew of problems plaguing the corporate market. While many banks have struggled to find buyers willing to place orders for new issues and seen the spreads on deals widen as a consequence, bookrunners Paribas and JP Morgan found takers for their allotments before launch and correctly sized and priced the Carrefour issue to ensure a stable aftermarket performance.

As foreshadowed in EW599 Hungarian mobile phone operator Pannon GSM is set to launch a Euromarket offering. An expected Eu125m five year Euro/144A issue via ING Barings is to be launched late next week or early the following week, following a series of investor presentations in Europe and the US which kicked off this week.

Banco Essi, Merrill Lynch and Warburg Dillon Read have completed the Portuguese government's Eu1.6bn sale of stock in Portugal Telecom. The deal, which was combined with a capital increase, is the fourth divestment of Portugal Telecom by the government, and the sale in the national operator has inspired keen interest from international and local investors.

International Paper, the world's largest paper and forest products company, plans to launch a Eu300m seven year transaction next week following roadshows to be hosted in Europe by Credit Suisse First Boston. Bill Boehmler, the company's Treasurer, told Euroweek that the deal has been planned since last year when they were hoping to issue in Deutschmarks and convert to euros at the beginning of the year. "We had hoped to be one of the first entrants in the new market," he said.

US dollar swap spreads moved out sharply this week. By yesterday (Thursday), the 10 year swap was trading close to 90bp, more than 5bp wider than its closing price on July 10. The five year swap moved out to about 75.6bp mid-market, while the three year was at about 64bp. At the same time, corporate secondary spreads held their ground over the early part of the week and then firmed by about 1bp on Thursday - a day of considerable dollar issuance. Consequently, arbitrage to floating rate has improved appreciably over the course of the week, and underwriters should see some interest in opportunistic debt raising.

Argentina

US investors remained wary of Latin American this week, with even Pemex experiencing a slow response to a $1bn oil backed receivables issue it plans to launch next week. The offering, led by Morgan Stanley Dean Witter, will be broken into four tranches: one MBIA triple-A wrapped piece with an average life of 13 years, and three unwrapped triple-B rated portions with average lives of seven, 16 and 25 years.

A string of successful deals ahead of the summer break look set to improve the outlook for Germany's Neuer Markt after the disappointing performance of new issues in recent weeks. Among the deals attracting strong levels of interest is Dresdner Kleinwort Benson's sale of stock

US credit card bank MBNA appeared in the Euromarkets in two guises this week, selling Eu500m of bonds backed by US collateral through MAESTRO 6, and a £250m securitisation of its UK portfolio, CARDS 9. The US asset deal is MBNA's second in euros - at the end of April the bank became the first American institution to securitise in the single currency, with a Eu750m five year floater, lead managed by Credit Suisse First Boston.