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 Credit Lyonnais Securities (USA)

Brady Bond Trading Recap

contributed by Credit Lyonnais Securities (USA) Inc.

Tuesday, January 4 2000

Daily Brady Bond Trading Commentary

The dramatic U.S. equity sell-off spilled over into Latin bourses, foreign exchange and debt markets. The rebound in Treasuries will do little to lift emerging market assets, as the U.S. equity market remains the determinant of sentiment and the key to global liquidity. Also weighing on Latin debt in particular is the specter of new supply. The consolidative trade to which we referred yesterday has already occurred to a large degree, and may have been necessary to entice investors to absorb a couple of billion dollars of paper. Further spillover into Asian markets over night may lead to selling of Latin paper again Wednesday, but we expect that buyers will emerge as spreads have already backed up 50 to 100 bps from Monday morning's levels. The year has not begun as most market participants expected, but the prospects for emerging markets are certainly brighter than they appeared at this time last year.

This report was prepared by Credit Lyonnais Securities (USA) Inc. The information and statistical data herein have been obtained from sources we believe to be reliable but in no way are warranted by us as to accuracy or completeness. Returns set forth in this report are estimates based on internal assumptions, and any changes in these assumptions may have material impact on such estimated returns. This is not a solicitation or any offer to buy or sell securities. We, our affiliates, and any officer, director or stockholder or any member of their families, may have a position in and may from time to time purchase or sell any of the above mentioned or related securities.
 

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