Derivs - Credit

The rollover of the Markit CDX North American indices, which go live on Monday, went smoothly, despite the many distractions among dealer firms over the last two weeks.

Hedge fund managers are seeking legal advice as to whether they should exploit a legal loophole that would allow them to hold open out-of-the-money trades with Lehman Brothers, while withholding premiums.

The U.K. property derivatives market is seeing a surge in trading activity, with a shift away from complex strategies.

The notional outstanding value of credit derivative business decreased by 12% in the first six months of the year to USD55 trillion from USD62.2 trillion at the end of December, according to a mid-year survey by the International Swaps and Derivatives Association.

Allen & Overy is preparing a series of position papers on behalf of unnamed investment banks that want to have their say as state and federal plans to regulate the credit default swap market gather momentum.

Berkshire Hathaway’s move to bolster Goldman Sachs with a $5 billion capital injection led to a temporary tightening in five-year credit default swap spreads on the name, but the initial bounce quickly wore off.

Credit default swaps on Korean financials may trade tighter if U.S. government’s proposal to create a USD700 billion vehicle to unburden its financial sector of toxic subprime assets kicks in.

Nomura Holdings is set to grow the derivatives business of Lehman Brothers, after agreeing this morning to acquire the firm’s European equities and investment banking businesses.

Spreads on AAA permanent credit default swaps have slipped out once again as bad news continues to rumble through the market.

Now that the Securities and Exchange Commission has banned the practice of short selling on certain financial stocks, the credit default swap market is expected to pick up.

Sylvain Lebre, an iTraxx trader at SG Corporate & Investment Banking in London, is expected to join Morgan Stanley.

Five-year credit defaults on Scandinavian Airlines System fell dramatically Monday morning after speculation of a possible takeover by Lufthansa emerged.