SALOMON NOT PULLING OUT OF EUROYEN BONDS
<Salomon Brothers Inc> is not withdrawing
as a market maker in euroyen bonds, contrary to strong market
rumours circulating in London, a London-based spokeswoman for
the company's New York headquarters said.
    Earlier, a spokesman for Salomon Brothers' London
operations declined to comment at all on rumours that have been
circulating here.
    Euroyen bond traders had said they were informally
contacted by their counterparts at Salomon and told that they
would no longer be market makers in those securities.
    The traders said that Salomon had not notified the
Association of International Bond Dealers (AIBD) of its plans
to withdraw as a market maker. Under new rules recently adopted
by the AIBD, notification would be required if the firm decided
it no longer wished to make two-way prices at all times in
euroyen bonds.
    According to dealers at several Japanese banks, Salomon's
euroyen bond traders have been in a meeting and unavailable to
make prices. Market sources said that Salomon had offered the
traders a chance to remain with the firm if they were willing
to trade eurobonds denominated in other currencies.
    Dealers noted that at one point this year, euroyen bond
issuance had actually outpaced that of eurodollar denominated
bonds, the first time the U.S. Unit has been eclipsed as the
currency of choice for international borrowers.
    Dealers said that given the dollar's recent weakness, the
yen could once again top the eurobond issuance tables.
    Last week, Salomon Brothers announced it would trim its
worldwide staff by 800 and withdraw from several areas of
business, most specifically short term bank lending.
 REUTER
