Derivs - Credit

Société Générale is marketing hybrid structured notes featuring both credit-default swaps and equity index options to high-net-worth investors in Latin America.

Gregor Kapferer, head of credit trading at BayernLB in New York, has been promoted to oversee all cash and derivatives trading on the desk across credit, fx and interest rates—a newly created role.

The past week has been marked by nerves in the financial markets. Investors are wary that the long rally since March is losing momentum and that valuations are looking frothy, despite a solid earnings season.

Researchers at Goldman Sachs have offered an estimate of risk reduction from clearing over-the-counter derivatives. Specifically, they calculate that introducing clearing for dealer-to-dealer trades will yield 16 times the counterparty risk reduction than would be achieved for trades between non-dealers.

Standardized documents for Shariah-compliant credit default swaps are not close for the simple reason that the underlying derivatives don’t pass muster in their current form with Islamic scholars.

Ex-Royal Bank of Scotland saleswoman, Jacqueline Tan, is widely tipped to head up corporate structuring solutions at Barclays Capital for the Asia Pacific region.

Citadel Securities has added three more credit traders in New York.

Top derivatives dealers in the U.S. have been mulling what to do about a series of broker/dealers trying to get into the credit default swaps market now that exchange trading is on the horizon.

Some swap counterparties to Lehman Brothers are arguing that they shouldn’t have to make payments, even after the U.S. bankruptcy court recently ordered one such firm, Metavante Corp., to pay up. At issue is whether a firm with an open swap must keep making payments while Lehman is not making its scheduled payments.

Brazil’s decision to impose capital controls last week brought back unwelcome memories for many investors. South America has a history of governments intervening in capital flows, most recently in Argentina. The results are often unsuccessful and only serve to scare foreign investors away from the region.

Société Générale Corporate and Investment Banking has added a flow credit desk in New York and has relocated Cedric Lespiau, a senior index trader from London, to head up U.S. credit derivative index products.

Chak Wong, managing director and head of corporate structuring solutions at Barclays Capital in Asia, left the firm last week for an academic position.