Credit spread contraction is occurring and is evident in the A$1.35 billion, four-year bond sold last week by Commonwealth Bank. CBA bank priced A$850 million of fixed rate bonds and A$500 million of floating-rate notes at 89 basis points over swap and bank bills, respectively. The issue was not government guaranteed.The last such issue was from Westpac less than a month ago. And while this issue came with a five-year term to maturity, the 110 bps over swap/bank bills is a fair bit wider than the 89 bps paid by CBA last week.The only other domestic issuer last week was the Australian branch of WestLB, which issued A$650 million of government-guaranteed, December 2010, FRNs. The issue was priced at 29 bps over bank bills. WestLB has been an infrequent issuer, with only two other issues undertaken in 2004: A$250 million of December 2007 bonds; and A$500 million of September 2009 bonds.The SSA sector was active, with European Investment Bank and German development bank KfW topping-up existing lines while the Council of Europe opened a new one. EIB added A$350 million to its May 2014 line, to take outstandings to A$1.35 billion. The bonds were priced at 17 bps over swap, which compares very well with the 75 bps paid when the line was opened in May.The same cannot be said for KfW though; it added A$200 million to its March 2017 line at a margin of 30 bps over swap. The line was opened at A$300 million in March 2007, at a spread of 12 bps under swap. The addition takes the total outstanding to A$500 million.Council of Europe sold A$300 million of September 2014 bonds at a spread of 30 bps over swap.In other news, Insto reported Challenger Financial Services Group was seeking to buy back up to A$100 million of its A$250 million April 2010 bond issue (issued through subsidiary Challenger Treasury). The bonds were issued in April 2007 at swap plus 40 bps.