Derivs - Credit

The difference between sovereign and corporate CDS spreads in Europe reached its tightest point since February this week as public finances came under increasing scrutiny. Greece saw its CDS spreads widen sharply to 185bp, dragging the rest of Europe with it.

Broker-dealer Knight Libertas has hired ex-CreditSights senior macro strategist Brian Yelvington to assume a new role in fixed income strategy.

An auction mechanism that would standardize how credit derivative tranche trades are settled when a company within the tranche restructures its debt is being formulated. The so-called Tiny Bang restructuring supplement follows Small Bang and Big Bang protocols introduced earlier this year and would primarily affect iTraxx trades in Europe.

Citigroup has hired Jeremiah Stafford, a former director in credit default swaps index trading from Barclays Capital in New York.

CME Group is heading towards a self-imposed, year-end deadline for the launch of its credit default swaps clearing platform, formerly known as CMDX, but its founding dealer members still have not been announced.

Equity and fx derivatives traders and salesmen are in line for a huge increase in bonuses this year, with credit derivatives execs not far behind, according to headhunters.

Britain’s sovereign CDS have been active this week after Fitch Ratings warned that the nation’s AAA rating is most at risk of all the premium-rated countries.

The notional amount of single name and index credit default swaps outstanding globally for the first half of 2009 was USD36 trillion, 14% less than what was recorded for July to Dec. 2008, according to an update from the Bank of International Settlements.

Donal Galvin, global head of client structured products, has resigned from Rabobank in London.

The leading contender in Japan for clearing over-the-counter derivatives has suffered a series of setbacks, forcing a progress report that was due in October from the Tokyo Stock Exchange to be pushed back at least two months.

Firms who trade over-the-counter derivatives hit out at the lack of clarity from regulators at the Futures and Options World derivatives conference in London this morning.

Swiss Re is preparing to outsource USD23 billion in proprietary credit investments to third-party asset manager BlackRock Solutions.