Salomon dials up new
telephone utility bond

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By Dave Segal
dsegal@starbulletin.com

Salomon Smith Barney said today that confusion over its telephone bond key rates listing has prompted it to switch the benchmark bond it provides to the New York Times for that category.

The financial services firm and the New York Times were made aware of a discrepancy in their listings after a series of phone calls by the Star-Bulletin. The Star-Bulletin, which carries the key rates, is one of about 600 newspapers that has the data available for use.

Salomon Smith Barney said the telephone bond now listed in the key rates will be a BellSouth Corp. 30-year uninsured, callable bond with a 6 7/8 interest rate and a maturity date of Oct. 15, 2031. The investment grade bond, which is yielding more than 7 percent, is rated Aa3 by Moody's Investors Service, A+ by Standard & Poor's Corp. and AA- by Fitch Investors Service. The highest rating a bond can get is AAA while BBB is the lowest investment grade rating.

Star-Bulletin readers, enticed by interest-rate yields of between 7 and 8 percent in the telephone bond listing, initially prompted this newspaper's probe. In the investigation, it was discovered that two years ago Salomon Smith Barney had switched its US West telephone bond benchmark to an electric company bond, Virginia Electric and Power Co.

A Salomon Smith Barney spokesman said the telephone bond switch in the key rates would be made as soon as possible.