Derivs - People and Markets

Five-year credit default swaps on American International Group are trading at 32 basis points upfront, above the running spread, down from 39 bps yesterday after the bailout news.

Standard Chartered is hunting for a global head of institutional sales, a new role which will include selling structured products across credit, fx, commodities and equity.

Lehman Brothers has agreed to sell its North American investment banking and capital markets business to Barclays Capital.

Yale Baron, co-head of JPMorgan’s structured credit group, has left the bank.

PricewaterhouseCoopers has hired Linklaters partner Simon Firth to help unravel Lehman Brothers’ complex derivatives book.

The International Swaps and Derivatives Association has determined that stripped pieces of Fannie Mae and Freddie Mac bonds cannot be used as deliverable obligations under standard credit default swap contracts.

Mizuho Corporate Bank’s recent JPY136 billion collateralized loan obligation offering has had a lukewarm reaction from investment banks.

Dealers holding over-the-counter equity derivative contracts on Lehman Brothers Holdings appear to be better off with the bank filing for bankruptcy than they would have been if it had been rendered insolvent.

Pricewaterhouse Coopers were poring through the derivatives trades of Lehman Brothers at the firm’s London headquarters today as they tried to establish how to deal with trading exposures.

Concern the troubles that felled Lehman Brothers are not contained have caused credit default swaps on other prominent Street firms Goldman Sachs and Morgan Stanley to widen substantially.

Dealers are watching bid/ask quotes on off-the-run series of the iTraxx indices in Europe, which until recently they had largely ignored.

Premiums for five-year credit default swaps on Lehman Brothers had widened to 650 basis points earlier this morning, after opening the day at 500.