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.
Answer: Sovereign Bond Spreads, 31 August 2001
Here is an email: John, EGS are asking whether Orlando is yours for PRC and bonus purposes? Presumably no doubt about Wiggs et al. What's your view. They seem happy either way. Just want clarity. David
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A: Electro - Orlando Gonzales
Q: Sorry for the mixup. Attached is template for confirm and then the GTC (minus tax reps). I'm trying to fit in the tax reps in between phone calls and will distribute to Susan Musch (tax) for review. Stuart: Who else should be on the review list? Thanks. Sara
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A: par forward attachments
We'll get pointed questions related to Europe and broadband thanks to Steve Bergstrom. Suggest we answer that we feel confident that the first mover advantage will give us superior returns in the long run. USA: INTERVIEW-Dynegy feels gradual approach in Europe vindicated. By Andrew Kelly 10/15/2001 Reuters English News Service (C) Reuters Limited 2001. HOUSTON, Oct 15 (Reuters) - Natural gas and power marketer Dynegy Inc. said on Monday it felt vindicated in its step-by-step approach to building a business in Europe in view of recent retrenchments by rival Houston-based companies. Dynegy recently opened an office in Madrid to market natural gas, electricity and derivatives. Spain is the fifth country in continental Europe where Dynegy has set up an office since it started up its European operations in Britain in 1994. By contrast Enron Corp. has recently announced plans to cut staffing at its European operations by 5 percent to 10 percent amid concerns about slow and piecemeal progress toward deregulation of European natural gas and electricity markets. "Enron threw 800 bodies at it and tried to do it in a hurry. We've been going at it much more slowly because we thought it would take some time," Dynegy President and Chief Operating Officer Steve Bergstrom told Reuters in an interview. Another Dynegy rival, Reliant Resources Inc., said last month it was considering a possible sale of its electricity generation business in the Netherlands. "Reliant bought one utility in one country and realized that's not really the way to enter the market in Europe," Bergstrom said of the move which cost Reliant $2.4 billion. Bergstrom said his own company differed with Enron and Reliant in the execution of its entry into the European market, rather than in its assessment of the market's potential. "We've gone at this much more cautiously. We've made sure that we staff it appropriately for the market timing and we think we've done it the right way," he said. Bergstrom said there were similar differences between Dynegy and Enron's approach to the broadband telecommunications market where Enron has also cut jobs after admitting that it probably overestimated the market's short-term potential. "They're having to retrench, but you're not hearing them give up on the telecommunications business. Our cost structure is so much less than theirs, that's why we're a lot more optimistic, because they have to go through cutting a bunch of costs whereas we never added those costs," he said. Dynegy reported on Monday its third-quarter net earnings rose 62 percent as its wholesale energy business nearly doubled its returns. Dynegy has said it expects its broadband business, created late last year, to generate a positive net income next year. The business posted a $15 million loss in the third quarter of 2001. Dynegy's Chief Executive Officer Chuck Watson told analysts in a conference call on Monday that the unit's revenues had doubled in the latest quarter to $8 million. "We believe the industry touched the bottom in this communications market in the third quarter, with bandwidth demand picking up sharply in the foreseeable future," Watson said. Copyright ? 2000 Dow Jones & Company, Inc. All Rights Reserved.
Answer:
Reuters story on Dynegy 3Q earnings