Message-ID: <686875.1075863370894.JavaMail.evans@thyme> Date: Mon, 3 Sep 2001 08:31:29 -0700 (PDT) From: karin.levin@enron.com To: jarek.astramowicz@enron.com, john.bottomley@enron.com, s..bradford@enron.com, london.brown@enron.com, rick.buy@enron.com, paul.chivers@enron.com, markus.fiala@enron.com, renata.frankova@enron.com, nigel.friend@enron.com, joe.gold@enron.com, david.gorte@enron.com, bjorn.hagelmann@enron.com, richard.harper@enron.com, olivier.herbelot@enron.com, andrew.marsden@enron.com, ted.murphy@enron.com, roderick.nelson@enron.com, mark.ruane@enron.com, bryan.seyfried@enron.com, eric.shaw@enron.com, john.sherriff@enron.com, stuart.staley@enron.com, antony.steiner@enron.com, padmesh.thuraisingham@enron.com, steve.young@enron.com Subject: Sovereign Bond Spreads, 31 August 2001 Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable X-From: Levin, Karin X-To: Astramowicz, Jarek , Bottomley, John , Bradford, William S. , Brown, Michael - COO London , Buy, Rick , Chivers, Paul , Fiala, Markus , Frankova, Renata , Friend, Nigel , Gold, Joe , Gorte, David , Hagelmann, Bjorn , Harper, Richard , Herbelot, Olivier , Marsden, Andrew , Murphy, Ted , Nelson, Roderick , Ruane, Mark , Seyfried, Bryan , Shaw, Eric , Sherriff, John , Staley, Stuart , Steiner, Antony , Thuraisingham, Padmesh , Young, Steve X-cc: X-bcc: X-Folder: \RBUY (Non-Privileged)\Buy, Rick\Inbox X-Origin: Buy-R X-FileName: RBUY (Non-Privileged).pst Sovereign Bond Spreads: =20 Significant New Issuance - CSFB Commentary: ?=09The emerging debt markets were less volatile this week following the st= abilization in the Argentine financial sector. Although there was no real p= rogress in improving the country's fundamentals, international reserves and= private sector deposits stopped falling, generating positive momentum for = the market. As a result, Argentina broke through an important 1400 resistan= ce level this week and the positive tone spilt over into other markets. The= Turkish Eurobond market had a very strong week supported by dramatic impro= vement in the local market: the Central Bank cut its overnight lending rate= from 62% to 60% after a successful T-Bill auction on Friday and local debt= yields declined sharply. Most of the Turkish curve was very well bid again= st the background of revived investor activity. The Turkey 2030 benchmark r= eached its high since the beginning of July at +935 bps spread on Thursday.= The Russian market also gained this week on the back of both the general E= M sentiment and local news on the incorporation of the "financial reserve" = (designed to accumulate US$1.8bn to help the government service its debt in= 2003) into the draft budget for 2002. Russian assets are now trading only = 1 point below their highs since the 1998 crisis. For Central and Eastern Eu= ropean assets this was a strong week with good demand especially for sovere= ign bonds, although there was no significant move in prices. Despite the ov= erall positive sentiment, Friday witnessed some weakening in all the emergi= ng markets, caused mainly by the technical factor of profit taking once the= market reached two month highs. The EMBI+ Index closed only 4 bps tighter = on the week at +882 bps after touching +861 bps during the Thursday session= . ?=09On its 30th August meeting, the European Central Bank lowered its bench= mark repo rate by ? point to 4.25%. European benchmark bonds reacted positi= vely to the announcement and now are pricing in at least another ? point ra= te cut this year. This is good news for issuers of *uro denominated bonds a= s the long awaited rate cut will lower European benchmark yields going forw= ard. ?=09Fitch upgraded the Republic of Estonia's rating to "A-" from "BBB+" on = Thursday reflecting its strong GDP growth, fiscal deficit reduction and goo= d fiscal prospects.