replacement value of counterparty re-
ceivables with an average `AA' rating.
Capital requirements are calculated
daily using a dynamic approach that
incorporates counterparty credit qual-
ity, portfolio diversification, and sover-
eign risk. The company is required to
maintain $175 million as a minimum
level of capital. Dividend payments
may be made only if they do not result
in a capital shortfall.
Financial Strength
Swapco generated net income of $26.6
million for the six-month period ending
June 30, 1997, compared with $39.1
million for full-year 1996. During the
first half of 1997, total revenues (net of
interest expense) were $54.0 million,
compared with $79.7 million for all of
1996. Net interest income accounted
for 15.1% and 31.6% of revenues during
first-half 1997 and fiscal 1996, respec-
tively, with the balance from interme-
diation, guarantee, and management
fees charged to affiliates. Operating ex-
penses consist of management fees and
affiliate sales commissions, compensa-
tion, professional services, occupancy,
and other. Operating expenses totaled
$8.8 million for the first six months of
1997, compared with $18.0 million for
all of 1996.
Copyright © 1997 by Fitch Investors Service, L.P., One State Street Plaza, NY, NY 10004
Telephone: New York, 1-800-75 FITCH, (212) 908-0500, Fax (212) 480-4435; Chicago, IL, 1-800-48 FITCH, (312) 214-3434, Fax (312) 214-3110;
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Barbara A. Besen, Publisher; John Forde, Editor-in-Chief; Madeline O'Connell, Director, Subscriber Services; Jason H. Kantor, Manager, Publishing Technology;
Diane Lupi, Nicholas T. Tresniowski, Managing Editors; Jennifer Hickey, Editor; Jay Davis, Martin E. Guzman, Senior Publishing Specialists; Dena Noe,
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Reproduction in whole or in part prohibited except by permission.
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Salomon Swapco Inc
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Fitch Investors Service, L.P.
