Derivs - Credit

An unidentified North American bank is said to be looking at writing leveraged total return swaps for funds of funds investing in distressed assets.

Telecom names have been a big focus in European credit default swap trading over the past month, with Deutsche Telekom and British Telecom featuring most, according to new figures from broker GFI Group.

A “standard converter” allowing credit default swap traders to calculate payments under new fixed-coupon CDS contracts is slated for release Feb. 23. Markit revealed the plan this afternoon at a New York forum it hosted to educate market participants.

Rumors of fourth-quarter losses at Swiss banks UBS and Credit Suisse sparked activity in the otherwise quiet single-name credit default swap market Thursday, with spreads on both names widening around 10-15 basis points from previous day’s close.

Annual bonuses for European Deutsche Bank employees will be cut by at least 75%, with structured product players and senior staffers expected to receive the least.

Deutsche Bank has opened up a new head of credit sales position in Singapore, bringing in Matthew Engman from the firm’s Tokyo office to fill the role.

The prevailing view of representatives from the National Conference of Insurance Legislators who met to discuss state regulation of credit default swaps Saturday was that “naked swaps should be illegal,” according to Susan Nolan, executive director.

David Hogan, formerly a managing director in structured product sales for the Americas at Nomura, has landed at Sorin Capital Management.

A flurry of credit default swap trading early this week has prompted further widening in skew, triggering discussions about relative value trading strategies between single names and indices.

Rene Levesque, a former equity derivatives trader for RBC Capital Markets, has started Mountjoy Capital, a hedge fund research firm in Ottawa.

Spreads on the iTraxx financials indices tightened today as stocks in the sector continued to gain ground following reassurances from Barclays Bank it will not need government aid and amid speculation of a full Royal Bank of Scotland nationalisation.

David Carlson, a senior credit derivatives structuring and marketing official at JPMorgan in New York, left the firm Friday.