Derivs - People and Markets

The Federal Reserve’s decision to lower its overnight interest rate to a target range of between zero and quarter of a percentage point caused the CDX North American Investment Grade index series 11 to tighten dramatically yesterday.

The permanent ban of naked short selling in Australia, which comes into effect Jan. 8, will force issuers of structured products to use more costly methods to hedge exposures, according to market commentators.

The price to settle loan-only credit default swaps referencing Hawaiian Telecom Communications Inc. landed at 40.125% today, meaning sellers of protection on the loans will pay out just under 60 cents on the dollar.

JPMorgan is cutting 20%-50% of staff in structured investments distributor marketing as it merges the team into its institutional team, headed by Tony Best, managing director in London.

An Asian sovereign wealth fund is looking to use credit derivatives to actively manage its credit exposure, according to one Hong Kong-based analyst who has spoken to the fund.

Stephen McAlinden is leaving Eban International, the executive search firm he co-founded in Hong Kong 13 years ago.

The Internal Revenue Service is looking at the use of total return equity swaps between securities dealers and foreign investors to get around taxes on dividends.

A U.S. Bankruptcy Court judge has granted Lehman Brothers Holdings the right to employ Natixis Capital Markets as a strategic advisor, with special focus on its derivative positions.

A court hearing in New York this morning to determine whether Lehman Brothers will be able to realize the value of certain in-the-money swaps by auctioning them off may not apply to objecting parties.

Kenny Chong, managing director and head of Asia ex-Japan credit trading at Credit Suisse, has exited the firm.

David Mordecai, a managing director at Swiss Re in New York specializing in mortality and catastrophe derivatives, left the firm Wednesday amid a reorganization of the financial markets group.

Barclays Capital recently closed a USD20 billion collateralized loan obligation called Newfoundland CLO I, which contains a total return swap to insulate the deal from fx volatility and any interest rate mismatches.