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Credit-default swap spreads on Ericsson tightened last week by around 75 basis points to 470bps even though the company's fundamentals have not improved. Traders attributed most of the tightening to yield hungry investors snapping up cross-over credits, adding that British Airways also came in to around 450bps from 575bps at the beginning of the month. Trading was light throughout the default swap market, with about USD10-15 million a day going through the broker market on both BA and Ericsson.

Deutsche Bank last week lost Masayuki Ishido, v.p. in integrated credit trading in Tokyo. He left the firm for personal reasons, according to officials at the bank.

Pierre Maliczak, former head of the fund derivatives business at Bank of America in London, and Kamal Fayad, former managing director in equity derivatives trading at Deutsche Bank in London, are considering starting a statistical arbitrage fund. The fund will be model-driven and market neutral, trading the Dow Jones EURO STOXX 50, according to market officials. Maliczak and Fayad declined comment.

Fitch Ratings plans to survey an additional 50 sellers of credit protection to fully asses the risks of the credit derivatives market. In March, Fitch published its first account of the risks in the credit derivatives arena. Ian Linnell, managing director in the credit policy group in London, said the first survey missed out some major names, such as Swiss Re and Abbey National, and the rating agency is going back to make it more comprehensive. The survey should be published next months.

FleetBoston Financial is considering entering two novel structured credit transactions to hedge risk. The firm is in talks with commercial banks about exchanging some of the risk in its corporate credit portfolio with another firm in a direct swap without the intermediation of a broker. This would be a low cost way of hedging risk and diversifying the book, noted Robin Lenna, managing director in credit capital management in Boston. If it goes ahead the transaction will likely have a notional size of USD500 million-USD1 billion, she said.

Armin Rothauser, former credit trader at Commerzbank Securities in New York, has joined Morgan Stanley as a credit derivatives trader while former colleague Marc Drozdz, also a credit default swap trader, has taken a similar position at Crédit Agricole Indosuez in London.

Mark Timmis, director and head of credit derivatives trading at Credit Suisse First Boston in London, has left the firm. He is thought to be jumping to Bear Stearns in London. Rebecca O'Neill, spokeswoman at CSFB in London, declined comment.

Derivative houses in Malaysia, including ABN AMRO and HSBC, expect interest rate swap volumes to rocket with the impending launch of three and 10-year bond futures. "This will definitely help," said Aik Sai Hong, treasurer at HSBC in Kuala Lumpur. Hong estimated that average monthly interest rate derivatives trading volumes range from MYR700 million to MYR1 billion (USD185-264 million) and that once the contracts are introduced volumes could swell by 20-35%.

Simon Glossop, former head of credit trading at RBC Capital Markets in New York, has joined the European Bank for Reconstruction and Development as a portfolio manager. The EBRD is also planning to hire a head of the desk. Alex van Nederveen, deputy treasurer in London, said Glossop will work on the investment credit desk, which trades products ranging from collateralized debt obligations to repos. Glossop referred calls to van Nederveen.

Edward Rich, managing director in interest rate swaps trading at Bear Stearns in New York, has left the firm. It could not be determined whether Rich, who could not be reached, had joined a competitor. Michael Fedak, senior managing director, to whom Rich reported and Michele Agostinho, spokeswoman in New York, did not return calls.

AMP Henderson Global Investors (NZ), with over NZD11 billion (USD6.3 billion) in assets, is preparing to enter the credit derivatives market for the first time in the coming months. Peter Scobie, senior portfolio manager of fixed interest in Wellington, said the manager has been reviewing counterparty arrangements and studying products but noted that the lack of standardized documents has delayed its debut, which it began considering last year (DW, 2/24/02). He noted, however, that the asset manager is looking at credit-linked notes and credit-default swaps for its over NZD3 billion fixed income portfolio, as well as CDOs. It will likely take the plunge in the coming months.