10. The Euro-loan market began 1999 slowly, during January Western European market volume amounted to only US$ 9.2 billion (US$110 billion annualised) and United Kingdom volume was only US$ 4.2 billion (US$50.4 billion annualised). By the end of February, the volumes were Western Europe US$29.2 billion (US$174 billion annualised) and United Kingdom US$11 billion (US$66.15 billion annualised).
11. Loans launched during the first two months of 1999 would have used facilities concluded in 1998 and any launched in 1999 as benchmarks. Annex 1 shows selected loans signed between January 1997 and March 1999. These cover a wide range of borrowers including pure sovereigns, public bodies/state agencies and major corporates in a range of industries including telecommunications, roads, railways, power generation, healthcare, mining and services.
12. Maturities vary from very short-term to long-term (circa 20 years) for project financing/PFI but there are few transactions over 10 years. Transaction sizes vary but there are few large facilities. It is worth noting that in 1998 there were only 28 transactions greater than £1,000 million equivalent amount for Western European borrowers (mostly acquisition facilities) of which 19 were for United Kingdom borrowers.
13. There are a number of large project financing/PFI facilities that can be used as benchmarks for a non-state supported facility. These include ISAB Energy (approx £580 million), Saltend Co-generation (£718 million), Sarlux (approx £600 million), and a larger number of much smaller facilities e.g. Tagus Bridge, and the United Kingdom transactions for, inter alia, Severn River Crossing and Autolink Concessionaires. These facilities were priced at substantial margins, many in excess of 100 basis points but they did have maturities of the length required.
14. There are several comparable facilities for state-owned or state-supported entities in 1997 and early 1998, but hardly any in late 1998. These include: Aeroports de Paris; Reseau Ferre de France; Charbonnages de France; Radiotelevision Italiana; Posten Norge; Electricidade de Portugal; Ente Publico Radio Television Madrid; and Red Nacional de Ferroccarrilles (RENFE).
15. These transactions were all aggressively priced at their launch but were successful due to risk quality and lender appetite. There were no comparable transactions during the first two months of 1999. However, by the end of 1998, margins had risen substantially from the levels seen in 1997 and there is no doubt that if these transactions had been launched into the market in January or February 1999 the borrowers would have had to pay a higher margin. There are few pure sovereign facilities. Only HM the Queen in Right of Canada and the Kingdom of Spain are equivalent benchmarks, whilst there are a handful of Hellenic Republic transactions which are not equivalent benchmarks.