RBC Capital Markets has reportedly taken a hit on a credit default swap position on WorldCom and has let go Simon Howard-Glossop, head of credit trading in New York. Howard-Glossop could not be reached for comment. A trader on the credit desk in New York declined all comment. Beja Rodeck, a spokeswoman at RBC in Toronto, did not return calls and Chris Pepper, a spokesman in Toronto, was unable to provide a comment.
RBC is believed to have been a net seller of credit protection on WorldCom, according to rival bankers. Credit protection on the communications company blew out some 300 basis points in March after the Securities and Exchange Commission decided to probe its accounting practices (DW, 3/25).
The firm reported in its second quarter results yesterday "The specific provision for credit losses was $328 million...The specific provision associated with a telecommunications account classified as impaired this quarter was partially offset by a $98 million gain on a related credit derivative, recorded in other income."
