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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.

Lawrence Shaw, portfolio manager at Alliance Capital Management, is pondering protecting or reducing his portfolio's triple-B corporate exposure by 10%, or $100 million, in anticipation of greater corporate sector volatility due to the potential war with Iraq. He has not decided if he will do this via the use of credit default swaps or by rotating into Treasuries. Shaw says he will make the move this week or next based on the amount of new corporate issuance.

Credit derivatives lawyers are facing Christmas in the office trying to figure out whether millions of dollars of credit protection referenced to TXU Europe Group Plc is void. Even though its parent TXU Europe has gone bankrupt, this entity has not issued bonds or loans and therefore holders of credit protection cannot deliver a defaulted asset in order to receive par value, according to industry lawyers and traders.

GFI, a cash and derivatives brokerage house, is set to begin brokering options on credit-default swaps. Matt Woodhams, global product manager, modeling, in London, said the maturity of the credit derivatives market is spurring banks to look at more innovative products with higher margins.

Element Re Capital Products plans to set up a London office to originate weather deals for end users. The subsidiary of XL Capital has hired Dan Tomlinson, marketing manager at WeatherXchange, to set up the London office, but will continue to trade European weather derivatives from Stamford, Conn. Tomlinson and Lynda Clemmons, president and ceo, declined comment.

Goldman Sachs is planning to hire credit derivatives sales and marketers in New York next year. Eric Oberg, head of credit derivatives sales and marketing in New York, said the new recruits will be taken on to meet the demands of the firm's growing credit derivatives business.

JP Morgan Partners, a private equity arm of JPMorgan Chase, is considering using total return swaps in its impending J.P. Morgan Incubator Fund, a fund of hedge funds. Simon Lack, ceo and president of JPMorgan Incubator Strategies, the division of JPMorgan Partners charged with making investments in new hedge funds, said it may use the swaps, for the first time, where they can increase the potential exposure to hedge funds.

Royal Bank of Canada is in the process of launching a USD1 billion synthetic asset-backed collateralized debt obligation. The deal, dubbed Caribou, is currently being marketed and Walter Gontarek, managing director and co-head of global credit products, said it is half sold. He declined further comment.

JPMorgan has combined two of its equity derivatives groups and appointed a derivatives professional with specialized hybrid experience. The firm is thought to be the first to reorganize its equity derivatives structure to focus on hybrid instruments, traders and recruiters said.

JPMorgan has reorganized its New York-based structured credit operation following the abrupt resignation last week of Romita Shetty, head of structured credit and alternative investments and global head of CDOs. Officials familiar with JPMorgan's plans said Maleyne Syracuse, managing director-client management, is being groomed to take over Shetty's responsibilities in origination and structuring, representing a significant increase in her remit. While Syracuse is broadening her role within the group, she will continue to be responsible for several key accounts, said one insider. Shetty declined comment and Syracuse did not return calls.

Insurers and other sellers of credit derivatives protection thought Christmas had come early last week when they persuaded the International Swaps and Derivatives Association to back down on a proposed loosening of the burden of proof required to trigger a default swap. Kimberly Summe, general counsel at ISDA in New York, said, "The argument went full circle and we are now back to the 1999 definitions."