Derivs - People and Markets

BNP Paribas has seen a surge in flows amid the turmoil in financial markets following the bankruptcy filing by Lehman Brothers.

Corporate investors wary of credit derivatives but keen to retain exposure to the equity markets via options are pushing banks to structure equity-linked notes that keep the face value of the notes on balance sheet but the mark-to market returns on the options off balance sheet.

Société Générale today closed on the purchase of a five-year credit default swap for a EUR2.98 billion (USD4.2 billion) loan portfolio on its balance sheet known as Atlas VIII.

If the bailout plan gets passed eventually, the government should have little difficulty hiring junior staffers to work on distressed asset acquisitions. But, getting the more senior valuation talent will be tougher, according to one headhunter.

NewOak Capital, the New York-based firm recently started by Ron D’Vari and James Frischling, has scooped up five managing directors.

Investor jitters are making it difficult to give a short-term outlook for credit spreads on the Brussels-based bank Fortis, according to Dresdner Kleinwort analysts.

Jim Josephson, former head of equity derivative flow sales at Bear Stearns in London, is about to land at hedge fund Algebris Investments.

The rollover of all but two Markit CDX North American indices has been postponed until Thursday due to uncertainty over the bailout plan.

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.

Investors are concerned moves to regulate credit default swaps could drag in equity options, since buying a put or call on a stock or index could be considered similar to downside protection offered by CDS.

Secured creditors may not escape as lightly as they would have hoped from the fallout of the Lehman Brothers bankruptcy.

Fitch Ratings today placed 22 tranches from five hedge fund collateralized fund obligations on ratings watch negative.