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 Credit Lyonnais Securities (USA)

Brady Bond Trading Recap

contributed by Credit Lyonnais Securities (USA) Inc.

Wednesday, January 19 2000

Daily Brady Bond Trading Commentary

Emerging market debt prices moved higher in volatile trading Wednesday. The market continues to focus on the U.S. interest rate backdrop and on supply. Brazil priced a US$1.0 billion 20-year bond to yield 650 bps over Treasuries, very much near the yield on the 14.50% of 2009. Investors made room for the new bonds partially by selling the 10.125% of 2027, which still trades 40-50 bps through the two shorter dated issues. The COPOM's two-day meeting ends Wednesday, and market consensus is that there will be no change in interest rates. With inflation appearing to level off after a spike late last year, the market still anticipates a small rate cut in coming months.
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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