Salomon Swapco Inc
To Our Clients
March 22, 1997
1996 was Swapco's fourth year of operations and the growth of the Company's derivatives
portfolio has continued to surpass our expectations. For the year, outstanding notional increased
by $53 billion, or 47%. At December 31, it had reached $166.2 billion. The rate of growth, as
shown on the accompanying graph, declined slightly in the fourth quarter, but remains very close
to the $1 billion per week pace that has typified our history. The graphs on page 2 display our
two other customary portfolio growth indicators: outstanding trades and signed master swap
agreements. As those graphs show, these indicators have kept pace with notional growth.
Outstanding trades are up to 2,788, a 54% increase
from 1,806 a year ago. Signed master swap
agreements are up 68 for the to year 279.
While the Company's book has grown, the level of
capital required to support the business has
stabilized at a level well below its historical high at
the end of last year. Swapco received capital
1
Outstanding Notional
$-
$20
$40
$60
$80
$100
$120
$140
$160
$180
12/31/93
6/30/94
12/31/94
6/30/95
12/31/95
6/30/96
12/31/96
(Billions of Dollars)
