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Leveraging mezzanine tranches of collateralized debt obligations to boost tight spreads in the middle slice of the capital structure is the latest idea being toyed with by structured credit officials.

Fisher Francis Trees & Watts, a global fixed income portfolio manager with USD40 billion in assets under management, is set to manage its first rated, synthetic collateralized debt obligation.

Conquest Capital Group, a USD500 million hedge fund firm based in New York, has launched a fund that uses derivatives to trade volatility as an asset class and attempts to exploit inefficiencies in options markets.

Monoline insurers have changed the name of a draft template for trading credit-default swaps on asset-backed securities.

Castlegrove Capital Management has lured a pair of senior equity officials to join its cast of former JPMorgan managing directors.

Barclays Capital recently started marketing in Asia synthetic collateralized debt obligations which include commodity-default swaps, which it believes is a first.

Short-dated Japanese yen calls/U.S. dollar puts were being snapped up last week after Governor Toshihiko Fukui hinted the Bank of Japan may raise interest rates, driving the yen higher against the greenback.

Synthetic collateralized debt obligation issuance picked up in November in advance of Standard & Poor's revisions to its synthetic CDO rating model taking effect.

Citigroup has recently launched a three-year Nikkei-linked note as a potential higher-yielding alternative to domestic products in Australia.

Citigroup last week priced a static emerging market collateralized debt obligation with a fixed recovery rate of 40%.

Analysts were busy last week trying determine recovery levels of the various piece of Calpine's debt while investors, mainly hedge funds, made arbitrage plays on the beleaguered independent power provider.

Buyer competition in the distressed debt market is pushing pricing to record highs and traders and investors do not see the tide turning anytime soon.