Derivs - Credit

Credit default swaps on Wachovia Corp. widened to 310 basis points yesterday after starting the week at 273 bps, with one senior New York trader attributing the leap partly to the decline in the CMBX Index

Lehman Brothers’ move to offer credit default swaps priced with a fixed upfront coupon has been finding some takers among users and has piqued the interest of rivals—even if none have actually followed suit.

In an abrupt reversal of trading flow during the first three weeks of August, the investment-grade CDX series 10 index broke out of its 130-137 range this week.

News of the Lone Star Funds deal to buy a 90% stake in German bank IKB Deutsche Industriebank AG prompted a spark in the credit default swaps on the highly illiquid name.

Spreads on Europe’s iTraxx Main index remained relatively unchanged during the week, as the Olympic Games drew market participants away from trading.

BlueCrest Capital Management is gearing up to raise capital again for its BlueCrest Multi Strategy Credit Fund.

Street sellers of credit default swap protection and buysiders have contacted Credit Derivatives Research about launching a futures contract or option—to trade over the counter or on exchange—that would reference its newly launched Counterparty Risk Index.

BlueCrest Capital Management is looking to recruit four traders across its credit derivatives business.

UBS’ Anders Haagen, a derivatives flow credit trader has left the firm.

Economic uncertainty and the specter of defaults are triggering an upturn in the use of recovery swaps.

The upfront price of credit default swaps on General Motors widened only slightly in the wake of a downgrade from Moody’s Investor Services, according to traders.

Anil Babbar, the former Americas head of fund derivatives at Morgan Stanley, is preparing to launch a long/short credit hedge fund in January with the firm’s former head of emerging markets structured credit trading, Andrey Krakovsky.