Eurobond Prices Fall; Warning on Inflation By Bankers Is Noted --- Special to The Wall Street Journal
LONDON -- Eurodollar bond prices fell 1/4 to 1/2 point yesterday.</br></br>The drop followed comments from central bankers at a conference in Boston that inflation remains a serious potential problem. Among the central bankers issuing the warning was Paul Volcker, chairman of the U.S. Federal Reserve Board, according to commercial bankers who attended the meeting.</br></br>They said the central bank chiefs also indicated there isn't much scope for further falls in interest rates.</br></br>In the Eurobond market, C. Itoh & Co., a Japanese trading house, became only the second borrower to offer equity-purchase warrants on Eurobonds denominated in European currency units, as the relatively firm market for equity-linked issues continued to attract more borrowers.</br></br>An ECU is a weighted basket of European currencies. Traditionally, the Japanese borrowers that dominate the equity-linked sector have preferred to borrow in the dollar market, where they have established both their names and an understanding of the market mechanisms, said lead underwriter Banque Paribas Capital Markets.