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The Royal Bank of Scotland Financial Markets is gearing up to structure synthetic collateralized debt obligations in Asia. "We're getting ready for the first phase," said Anthony Yuen, managing director and Asia Pacific regional head in Hong Kong. He added, "We're still building up."

"After 22 years with the firm it's time for a change."-- Mark Neuberger, managing director in equity derivatives proprietary trading at Morgan Stanley in New York, commenting on his reasons for setting up a hedge fund. For complete story, click here.

Shin Kong Life Insurance Co., one of Taiwan's largest life insurers with assets totaling over TWD528 billion (USD15.29 billion), is planning to make its first credit derivatives foray for its USD3 billion fixed income portfolio. "We've been watching the credit market," said James Kao, manager in the international investment department in Taipei. Kao explained that after a restructuring effort in the coming months, the insurer will move to mark-to-market accounting and likely look for alternative products for its fixed income portfolio, such as credit-linked notes. Kao noted that once systems and accounting policies are set, the insurer could purchase the products within 12 months.

UBS is developing an automated trading system for equity derivatives. Stephen Fulford, joint head of risk management products in London, said the platform will eventually allow clients to trade on-line, receive confirmation and entry into the risk-management system. The firm can currently post prices for stock options on-line, but cannot trade and carry out the operational procedures.

Derivative traders in Thailand expect a surge of hedging activity on the back a flurry of bond issuance which is about to hit the domestic market. "Everybody's getting ready to issue bonds," said a trader at Standard Chartered in Bangkok, noting that most international houses in Thailand have been lining up mandates. Market officials estimate that with possibly over USD1 billion in bonds expected to hit the market in late September and October, activity in the interest rate swap market will increase as many issuers will look to swap fixed rate baht deals into synthetic floating rate U.S. dollars. "This is exciting stuff," said a dealer at Citigroup, noting that so far this year issuance has been subdued as rates moved lower, with only a handful of deals so far.

Two more derivatives staffers have left Commerzbank Securities in New York amid the German firm's attempt to patch up the holes. Henry Flowers, senior structurer on the cross-asset structuring desk, will join Merrill Lynch in an equity derivatives structuring role. Meanwhile Judith Erdman, who worked in third party distribution for high-net-worth individuals, is taking a similar role at Fidelity Investments, said an official familiar with the plans. Flowers and Erdman could not be reached. Ed Mitchell, spokesman in New York, declined comment.

Typically the payout of an option at maturity is linear with respect to spot. However, non-linear payouts can offer either enhanced leverage, or a better hedge for a non-linear underlying exposure. Pricing of such structures can be done by: * Monte Carlo simulation

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

Susan Estes, managing director and head of fixed income for North America at Deutsche Bank in New York, has resigned. Estes' decision was predicated on a "desire for a significant lifestyle upgrade," according to an internal memo sent to global markets staffers on July 25 by Charles von Arentschildt, head of global markets America, and Michele Faissola, global head of rates. Estes, reached at work, referred calls to Harriet Benson, spokeswoman, who declined comment. Faissola was traveling and could not be reached. Calls to von Arentschildt were not immediately returned.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.