Ford Motor Credit, Tyco Make Big Issues Offerings
                    November 15, 2000

                    By DAVID FELDHEIM and JENNIFER ABLAN
                    Dow Jones Newswires

                    NEW YORK -- Despite volatile markets and uncertainty about the
                    election outcome, both the asset-backed and convertible bond markets
                    saw huge new issues.

                    In one of the largest offerings of its type, the Ford Motor Credit unit of
                    Ford Motor Co. issued $3.7 billion of auto-loan asset-backed securities.

                    Meanwhile, Tyco International Ltd., a manufacturing and services
                    concern, sold $3 billion [proceeds] of zero-coupon convertible bonds,
                    among the largest convertible issues ever done.

                                                In addition, electronics manufacturer
                                                Solectron Corp. late Tuesday was
                                                expected to sell $1 billion to $1.8 billion
                                                of zero-coupon convertibles.

                                                The convergence of the issues didn't
                                                signal that the debt markets are open
                                                for business as usual, analysts said.
                                                Rather, investors are in a selective
                                                frame of mind, willing to look at certain
                                                deals by certain issuers. "Investors
                                                want companies with strong cash-flow
                                                positions and a strong credit picture,"
                    said Tom Sugiura, a vice president in convertible research at Bear,
                    Stearns & Co.

                    People familiar with Ford Motor Credit's deal said the company has
                    raised its presence in the asset-backed sector because of the adverse
                    publicity its parent has suffered in the aftermath of the
                    Bridgestone/Firestone tire recall.

                    Because of the way they are structured, asset-backed securities can
                    qualify for triple-A ratings by major credit-rating agencies, as in the
                    Ford Motor Credit offering.

                    Anthony Thompson, head of ABS analysis at Goldman, Sachs & Co.,
                    said it "appears a lot of fixed-income investors have embraced the idea
                    that certain types of asset-backeds from large liquid issuers are a good
                    defense against event risk that might otherwise exist in the corporate

                    From an investor's perspective, Mr. Thompson added, large auto
                    issuers have less event risk.

                    A similar view was expressed by Niel McPherson,
                    ABS research head at Credit Suisse First
                    Boston, who said the ABS market "is not
                    charging Ford a premium to finance."

                    However, the yields of the asset-backed securities were at the wide end
                    of expectations, largely because of an "inordinate amount of supply"
                    that has come to the market in recent weeks, said Jeff Young,
                    securitzation manger for Ford Motor Credit.

                    In contrast to a sale of similar securities in October, Tuesday's didn't
                    attract much foreign buying, Mr. Young said. That is because the
                    structure of the issue was somewhat different, he said.

                    Separately, Tyco's convertible offering had a yield-to-maturity of 1.5%
                    and a conversion premium of 36%. It drew strong demand, which led to
                    an increase from an originally planned $2 billion size. Moody's Investors
                    Service rates Tyco International's senior unsecured notes Baa1 and
                    Solectron at Baa3.

                    Solectron was expected to provide a revised yield-to-maturity of 3.25%
                    and a conversion premium of 32% on its zero-coupon convertible deal.
                    Original indications were a yield-to-maturity between 2.75% and 3.25%
                    and a conversion premium of 30% to 35%.

                    John Everhart, senior securities analyst at American Express Financial
                    Advisors in Minneapolis, who manages the $4 billion AXP Bond Fund,
                    said the near-simultaneous sale of two giant convertible offerings
                    initially had posed concerns about how well the market might be able to
                    absorb the issues. But, "even with the size of the offerings, they are
                    better quality names," he said.

                    Although Tyco picked up outstanding convertible debt as part of a
                    previous acquisition, Tuesday's deal was the first to bear the Tyco
                    name, said Michael Robinson, Tyco's senior vice president and corporate
                    treasurer. "We knew that investors were really looking for high-grade,
                    large-cap names," he said.

                    While the convertible market moves in sympathy with stocks and
                    bonds, convertibles have performed better than most other financial
                    markets, said Anand Iyer, a managing director and head of global
                    convertible research at Morgan Stanley Dean Witter in New York.

                    Convertibles are hybrid securities that include some of the features of
                    bonds, such as a regular coupon or dividend payments, but also allow
                    investors to wager on a company's stock. They are convertible into
                    shares of the issuing company's common stock, which provides an
                    opportunity to benefit from appreciation in the stock price.

                    Both convertible offerings were brought via Merrill Lynch. Officials at the
                    firm declined to comment.


                    Treasurys ended mixed, as short maturities edged lower on news of
                    somewhat stronger-than-forecast retail sales and a surge in stocks that
                    drew interest away from bonds.

                    But longer Treasury issues gained on repositioning linked to
                    developments in the election vote-recount saga.

                    The benchmark 10-year Treasury was up 5/32 point, or 94 cents per
                    $1,000 face value, at 99 30/32. Its yield fell to 5.744% from 5.761%
                    late Monday, as yields move inversely to prices.

                    Meanwhile, the 30-year Treasury bond's price was up 11/32 at 106 2/32
                    to yield 5.811%, down from 5.833% Monday.

                    Treasurys met pressure after the
                    Commerce Department said retail
                    sales, excluding autos, rose 0.4%
                    last month, slightly more than
                    forecast by economists.

                    Bonds fell more as the Dow Jones
                    Industrial Average and the Nasdaq
                    Composite Index both surged. When
                    stocks weaken, investors often shift
                    funds to the relative safety of
                    government securities. Money may
                    flow back to stocks from bonds when
                    stocks rally.

                    The bond market also was influenced
                    by events related to the presidential
                    election. News that the Florida
                    secretary of state would have
                    discretion to consider recounted and absentee votes past a 5 p.m. EST
                    deadline Tuesday was viewed by some traders as favorable for Vice
                    President Al Gore, even though it was uncertain whether the
                    development might actually help Mr. Gore in the tally.

                    Some bond investors believe a Gore victory would be more favorable for
                    the Treasurys market, leading to larger reductions in outstanding
                    government debt.

                    In other credit markets:

                    The new-issue pipeline of the corporate bond market continued to grow
                    despite another day of waiting for a resolution over the results of the
                    U.S. presidential election.

                    Prices for U.S. mortgaged-backed securities ended slightly higher to
                    unchanged Tuesday in volatile trading.

                    The Eurobond session was led by midsize issues from Finance for
                    Danish Industry and Framtiden Housing Finance, while long-term
                    government debt outperformed the short.

                    -- Steven Vames and Angela Pruitt contributed to this article.

                    Write to David Feldheim at and Jennifer
                    Ablan at