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Salomon Bros. to Peddle Bond 'Yield Book'

May 14, 1996|From Bloomberg Business News

NEW YORK — Salomon Bros. plans to sell to investors the information that helped make the firm the world's biggest bond trader.

Salomon said it formed Salomon Analytics Inc., a subsidiary that will market its "Yield Book" to customers. The Yield Book is a computer system and database full of confidential information on the $20-trillion world bond market.

The 86-year-old securities unit of Salomon Inc. had considered selling part or all of the Yield Book--a compendium of bond prices and yields as well as programs to value securities--because it doesn't make enough money on the service to support the dozens of people who help maintain it, sources at the firm said earlier this year.

Salomon provided the Yield Book on a complimentary basis to some of its customers. Starting June 1, Salomon Analytics will offer the service to existing Salomon Bros. customers as well as to new accounts, the firm said in a statement.

The Yield Book does not include the programs used by Salomon's proprietary traders that help them profit from anomalies in worldwide markets. Proprietary trading--wagering part of the firm's $4 billion of equity in the worldwide bond, stock and currency markets--traditionally provided the bulk of Salomon's profits.

Salomon built its reputation in the bond market buying, selling and underwriting securities with governments, corporations and individuals, earning billions of dollars in the process. As the most active trader, Salomon collected more information about prices and customer demand than its competitors.

There are signs the firm is recovering. It earned $704 million before taxes last year and $368 million in the first quarter.

Moody's Investors Service last week upgraded its ratings outlook on Salomon Inc.'s debt to "stable" from "negative."

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