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 Credit Lyonnais Securities (USA)

Brady Bond Trading Recap

contributed by Credit Lyonnais Securities (USA) Inc.

Tuesday, January 11 2000

Daily Brady Bond Trading Commentary

Emerging market debt prices slid back to their lows for the year as U.S. interest rates moved higher and supply concerns continued to grow. With the Brazilian deal possibly on hold again after investors had to digest the $1.5 billion 30-year Turkey issue, Argentina is still looking to launch a bond of similar size within a week. With customer demand not as strong as anticipated, dealers fell comfortable lightening up on inventory ahead of new supply. Credit spreads tightened enough during Q4 '99 that the market must be sensitive to the U.S. interest rate environment and, for the moment, the scenario is not bullish. As a result, we see limited upside for most emerging market debt assets over the short term. We do see room, however, for another bounce from these levels and believe volatility will remain high, with external factors as key determinants of day to day gyrations.
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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