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 Credit Lyonnais Securities (USA)

Brady Bond Trading Recap

contributed by Credit Lyonnais Securities (USA) Inc.

Thursday, January 20 2000

Daily Brady Bond Trading Commentary

The Brazil 12.75% of 2020 tightened versus Treasuries, as did most of the Brazilian curve, indicating that the supply has not overwhelmed the market. But reports that Argentina will try to launch a US$1.5 billion 5 to 10-year issue next week may be keeping some investors sidelined for the moment. Additional supply from a major Latin in the very near term could easily send the market below its recent lows, particularly as U.S. and Europe rates appear on the rise.

On the positive side, if Argentina is able to address most of its financing needs during the first half of 2000, and de la Rua maintains his disciplined fiscal posture while he finds other ways to stimulate the economy, then pessimism among international investors may begin to wane. We remain constructive on the market in general at these levels but acknowledge that surprisingly low liquidity may lead to opportunities to buy at more attractive prices.

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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