Derivs - Credit

Goldman Sachs is offering to replace users’ non-standardized credit default swaps featuring ‘modified restructuring’ with the new ones bearing ‘no restructuring’ trading conventions. It believes contracts on the old format hold secondary market value, but on the other side buysiders need to get out of Mod R contracts, since they are no longer liquid.

South African regulators are looking at over-the-counter derivatives, focusing on contracts-for-difference as well as credit default swaps.

Asian corporates are beginning to flirt with simple hybrid products as a way to play interest rate fluctuations at the same time as the risk of sovereign defaults, according to fixed income structurers in Hong Kong.

Regulations issued by the Bank of Thailand earlier this month have cleared up questions over what hedging and speculative transactions are allowed by Thai banks and investors, particularly when the trades reference foreign assets or are done with a foreign counterparty.

Gary Gensler, chairman of the Commodity Futures Trading Commission, has pushed back on certain points of the Obama administration’s draft Over-the-Counter Derivatives Markets Act of 2009, a consolidation of previously voiced positions on the market.

Lighthouse Financial Group, a full-service broker-dealer in New York, wants to add a pair of corporate bond and credit default swap brokers at the v.p. level—specifically with index as well as single name experience. Tom Novellino, a v.p. from the corporate bond team at Rafferty Capital Markets in Garden City, N.Y., recently joined the desk.

Credit derivatives players are wondering what the recent equity market correction means for CDS spreads over the coming months as signs of weakening continue. Just a few weeks ago, it seemed as if the CDX North America Investment Grade series 12 might duck the 100 basis point barrier amid rising confidence and an apparent recovery.

Three directors in credit default swaps trading at HSBC in London—Karanvir Anand, Pritesh Tank and Nick Gray—left last week.

Konstantinos Diamantopoulos, a director in derivatives marketing at Bank of America Merrill Lynch in London, has left the firm.

Robert Abdel-Malak, the cfo of global securitized products at Bank of America Merrill Lynch, has joined Nomura Securities in New York.

CME Group will not be establishing a credit default swap default fund separate from the one covering futures and options, Kim Taylor, president of CME Clearing, told Derivatives Week. The move is in contrast to IntercontinentalExchange Clear Europe and Eurex, which have separate funds.

Sunrise Securities, a New York-based boutique investment bank, is starting up a structured products business as part of a broader fixed-income buildout.