Merrill Lynch: Country of risk will determine bond index selection

By E. Janene Geiss

Philadelphia, Oct. 13 - Merrill Lynch announced Thursday that "country of risk" will replace the country of legal domicile for deciding whether an issuer is included in its various global bond indexes.

The change will take effect on Dec. 31 for the January 2006 constituent lists.

The rule change will result in 14 bonds moving from the high-yield to the emerging markets index series. Ten bonds drop out of the high-grade corporate indices, but they do not reappear in the emerging markets index as it excludes investment-grade rated debt.

No bonds will move from emerging markets indices into either the high-grade or high-yield indexes, officials said.

This change also affects the selection of securities for various regional indices such as the European Issuers High Yield Index and the Canadian Issuers High Yield Index.

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