SALOMON ISSUES 228 MLN DLR FLOATING RATE CMO
Salomon Brothers International's CMO
Eurotrust subsidiary is issuing a 228 mln dlr collateralised
mortgage obligation priced at par and yielding 40 basis points
over the three-month London interbank offered rate (Libor),
Salomon said as lead manager.
    However, interest, which is paid quarterly, cannot rise
above 11.50 pct.
    The stated maturity date of the issue is May 1, 2017, but
the deal has an expected life of 3.6 years which will vary with
the rate at which homebuyers prepay their mortgages
    The pool itself consists of Federal National Mortgage
Association (Fannie Mae) securities paying 10.50 pct.
    The issue settles on April 27 with no accrued interest.
    Salomon noted that the issue carries the lowest spread over
Libor of any CMO issued in the euromarkets to date.
    In explaining the pricing, a Salomon official noted that
there has been very heavy demand for high-coupon U.S.Agency
mortgage issues such as Fannie Maes and that the rising price
of the collateral must be passed along to investors.
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