Last week’s reports of the government intending to issue a 20-year eurobond gained more substance with news that Morgan Stanley Dean Witter and Credit Suisse First Boston have been appointed as lead managers. The bond is expected to be priced at around a 500 b.p. spread over the U.S. 30-year Treasury bond.
On the corporate side, Banque Audi has just closed the sale of its three-year dollar denominated bond, with orders amounting to more than $26 million, carrying a fixed rate of return and with a convertible option into the bank’s global depositary receipts. The bank will accept all orders on the 6 percent and 7 percent bonds but only a portion of those on the more popular 8 percent paper.
With the Federal Reserve keeping overnight bank lending rates unchanged at 6.5 percent, optimism was also reinforced by a stream of economic reports pointing to a soft landing for the US economy. US
Treasuries showed little reaction to second-quarter GDP growth, inching up as expected to 5.3 percent, but jumped after the government reported that orders for durable manufactured goods for July plunged
12.4 percent to $212.4 billion against market expectations of a 6.7 percent drop. Moreover, treasuries got a slight boost from the Treasury Department’s 12 th buyback, purchasing $750 million of 30-year bonds, its first buyback of callable bonds. ― ( Banque du Liban et d'Outre-Mer Sal )
© 2000 Mena Report (www.menareport.com )