Taking another step in its effort to carve out a business in international capital markets, Bank of Boston Corp. has underwritten and sold a $100 million Eurobond for Indonesia's PT Ongko Multicorpa.

The issue is the latest in a growing number of transactions the banking company has led recently as part of a program to build up an investment banking-style business in emerging markets.

Executives noted that the company's growing appetite for international capital markets transactions comes amid what they believe is a growing interest among U.S. investors in debt and equity from emerging markets, especially Latin America.

"The investor community has recognized the enormous potential of" Latin America, Bank of Boston president Henrique Meirelles noted in a prepared statement.

Added Peter Allen, managing director for emerging market research at the bank, "U.S. business leaders believe the region's economic and political reforms are real and will last and that it's time to invest more aggressively in the region."

Despite an extensive network of offices outside the United States and a strong commercial banking operation in Latin America, Bank of Boston is a relative latecomer to international capital markets.

However, since the start of the year, Bank of Boston has led a $500 million Eurobond for Panama along with several other issues for Latin American corporations.

The lease-backed, seven-year notes for the Indonesian financial and industrial conglomerate were issued at 400 basis points over equivalent U.S. Treasury securities. The notes have not been registered in the United States and may be bought and sold here only privately under Rule 144a of the 1933 Securities Act.

As part of the effort to build a capital markets presence, the banking company last month obtained section 20 powers to underwrite high-yield bonds and has been actively hiring traders and securities markets specialists away from other institutions in order to build up advisory services as well as trading, underwriting, and distribution of emerging market securities.

Most recently, the bank last week recruited Mark Brostowski from Salomon Inc. to be managing director and head of high-yield trading. And in two related moves this year, it joined forces with Canada's Bank of Nova Scotia and Mexico's Grupo Inverlat to set up a pension fund management company in Mexico, and it obtained a mandate in Brazil to advise the state of Goias on privatizing a government-owned dam and power station. Bank of Boston is also advising Vietnam on how to restructure and securitize its foreign debt.

A survey released Monday by the bank in Barcelona said that 80% of U.S. investors contacted for the study are more confident in Latin America than they were five years ago. The survey noted that, as a result, U.S. investors are far more willing to consider equity investments, especially in companies that are being privatized.

"Instead of being interested in government debt, which caused so many problems in the last decade," said Charles Mallis, Bank of Boston's managing director for global financial institutions, "bank activity in Latin America is being driven by corporate clients because of privatization.

"Privatization is the key to banking enthusiasm today."

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