Derivs - Credit

A dealer working group has met with Markit over plans for ABX.Prime, reviving discussions over the synthetic index of prime residential mortgage-backed securities, which was shelved in December.

Dealers in Australia and New Zealand have agreed to standardize credit default swaps, following in the footsteps of North America by opting for two fixed coupons—100 and 500 basis points.

Fuzzy language in the draft over-the-counter reform legislation revealed earlier today did little to quell concerns about the extent of forthcoming regulations, but there were some surprising nuggets in the concept paper.

Morgan Stanley Smith Barney and Wells Fargo are considering suspending the sale of leveraged exchange-traded funds. Spokeswomen for both firms said non-traditional ETF policies are currently under review mostly because of a notice from the Financial Industry Regulatory Authority last month that called leveraged ETFs unsuitable for long-term retail investors.

Hedge funds have been selling five-year credit default swaps today on BMW, Volvo, Renault and Daimler, as investors project a pick up in the auto industry brought on by better-than-expected second quarter results.

Standard Chartered recommended a relative value credit default swap trade in May, and then took a USD200,000 hit on its prop desk when the rationale behind the idea didn’t pan out.

Ambac Financial Group’s advisement that its principal operating subsidiary expects to take a USD1.6 billion second-quarter charge relating to souring credit derivatives—eliciting an 11 notch downgrade from Standard & Poor’s—has sparked a frenzy of shorting on monoline names.

The U.S. Depository Trust & Clearing Corp. is using a color coding system that demarcates standardized over-the-counter trades from customized ones in its Deriv/SERV Trade Information Warehouse, and plans to reveal details of the non-standard trades in a few weeks time.

BNP Paribas has hired Andrew Sultana from Nomura in London as a senior flow credit salesman covering Italy, and two from Citigroup: Marion Schlicker, covering flow sales to Germany from Frankfurt, and Alessandra Bock in high yield sales in London.

The volume of dealer and non-dealer firms that signed up to the Small Bang protocols, which put in motion an auction mechanism for settling restructuring credit events, is 2,105—more than the 2,095 adherents to the Big Bang in April.

Mizuho Securities USA has hired Mark Jicka as head of flow credit trading in the Americas, and Philip Garrubdo as head of flow credit sales Americas.

New York credit hedge fund Global Credit Advisers has hired Kirk Wortman to research leveraged loans, distressed investments and special situations for its GCA Credit Opportunities Master Fund, a long/short credit hedge fund focused on high-yield and distressed corporate debt.