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Bradford & Bingley has entered a cross-currency swap on a recent floating-rate USD300 million bond offering to convert it into a synthetic sterling-denominated liability. Paul Rixon, investment and derivatives manager in Bingley, U.K., said the thrift issued the obligation in dollars because there was demand from European and Asian-based investors for dollar-denominated debt, but needed to convert the offering into sterling because that is its operating currency. "We can issue in any currency that suits," Rixon said, adding that it is the firm's policy to convert any proceeds into sterling.

"We want to get a better understanding of the risks we are facing. The next stage is then to manage those risks."--Maarten Verway, head of the export credit insurance and investment guarantee division at the ministerie van Financiën in the Haag, explaining why it is looking at derivatives. For complete story, click here.

International Asset Transactions (IAT), a New York-based independent firm specializing in the securitization and trading of illiquid securities, is readying its first conduit, a USD12.5 billion structure that will invest in asset-backed securities and medium-term notes and will use over-the-counter credit, fixed income and foreign exchange derivatives. Gus Udo, president and ceo in New York, said the structure, dubbed SuperLumina, is being forged to benefit from recent regulatory and accounting changes, including Financial Interpretations accounting rule 46, known as Fin 46. A Fitch Ratings report predicts that a consequence of Fin 46, as well as the impending Basel 2 accord, will be a reduction in bank-sponsored conduits referencing asset-backed commercial paper and this presents opportunities for established, independent firms to step into the void, he noted. It is called SuperLumina because it aims to shed light on assets that are normally ignored.

The firm has hired Denis McCarthy, head of listed futures & options, portfolio trading, transitions and head of structured products & hedge fund sales at Morgan Stanley in Hong Kong, for a new role as head of equity institutional derivatives in Asia. Jason Good, head of equity institutional derivatives, said this is part of the firm's push to extend its franchise to Asia.

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.

The International Swaps and Derivatives Association has convened a meeting for Tuesday, May 20, in which credit derivatives players will vote to accept a supplement on which forms of guarantee are acceptable in standard credit derivatives documentation. ISDA has leveled an ultimatum to its members to either accept the so-called Guaranteed Obligations Supplement in its current form or bin it. One of the most contentious issues is what percentage of ownership determines whether an affiliate is a related company. The supplement says that a 10% or greater ownership stake confers affiliate status, but the protection sellers want the level to be nearer 50%.

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.

Accounting issues are set to take center stage as the European and U.S. regulators introduce new rules and set their sights on merging the systems. "Accounting has become one of the most important aspects of the credit derivatives market," according to Alessandro Cocco, v.p. and assistant general counsel in the legal department at JPMorgan in New York.

Bear Stearns last Thursday hired Raymond Wong, managing director in global equity markets at Merrill Lynch in Tokyo, in a new senior role as head of fixed income trading in Tokyo. "The chance to hire someone like Ray doesn't come around very often--we couldn't pass this up," said Lenny Feder, head of trading in Tokyo, to whom Wong now reports. Feder said the strategic hire comes on the back of the firm's build up in Japan which gained momentum last year (DW, 3/31/02). "I'm very excited with this new role," said Wong. Prior to joining Merrill, he had worked in fixed income derivatives trading at Bankers Trust and Deutsche Bank in Hong Kong and Tokyo. Wong declined further comment.

BNP Paribas has hired Pierre Katerdjian, global credit swap trader at Deutsche Bank in Sydney and former credit derivatives committee chairman for the Australian Financial Markets Association, in a new role in Sydney as a senior marketer in the structured credit products group. "This is an additional role focusing on structured credit products," said Marcus Blake, head of derivatives and structured credit marketing in Sydney.