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Taplin, Canida & Habacht will swap $200 million, or 10% of the firm's corporate bond portfolio, out of double-A rated financial bonds into triple-B cyclical corporates. Bill Canida, portfolio manager with the Miami-based firm, reasons that the economic recovery will cause cyclical bond spreads to tighten while rising interest rates will adversely effect banks and brokerage names. There is no particular trigger for this move besides the assumption that the economy is bound to recover soon. Canida says he is selling double-A five- to 10-year financial bonds at spreads over Treasuries inside 50 basis points. His buying target for the triple-B cyclical 10-year bonds is 500 basis points over the curve or higher. Those are trading at 400 basis over the curve as of last week.

Life is tough for those on the lower rungs of the loan market. While the senior members of desks across the country took off to spend the holiday weekend with their families, their younger counterparts stayed on to man the phones the Friday after Thanksgiving. One unlucky market player shared a sob story of having to give up an exotic vacation, even though experience has taught him that at the last minute his boss would tell him not to come in.

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.

SEB Investment Funds is looking to reverse its barbell strategy in its E3.75 billion fund managed out of Frankfurt. Once 10-year Treasuries yield 4.5% and 10-year European government bonds yield 4.75%, the firm will return to a neutral duration position, by buying back into the 10-year portion of the yield curve, says Martin Hochstein, head of fixed income. The move could happen by year-end, he says.

ABN AMRO plans to focus on exotic structured equity derivatives in the coming year and has hired two traders to achieve that goal. Alberto Cherubini, v.p. and equity derivatives trader, and Faisal Khan, director and equity derivatives trader, at Schroder Salomon Smith Barney in London have joined as senior equity derivatives traders. Both will report to Paris Badkas, global head of equity derivatives trading. Khan started a week ago and Cherubini is due to start today.

The Province of British Columbia has entered into a foreign exchange swap to convert the proceeds of a recent CHF400 million (USD274.7 million) bond offering into Canadian dollars. An official in Victoria, British Columbia, said the province never takes on unhedged Swiss franc-denominated debt. The bond was issued in a foreign currency in order to take advantage of attractive foreign exchange rates between the Swiss franc and the Canadian dollar, he added, declining further comment.

Volatility on dollar pairs including euro/dollar, cable and dollar/yen eased last week as fewer trades were executed in the run up to the holiday-shortened Thanksgiving week. Last Wednesday three-month euro/dollar volatility stood at 9.15%, down from around 9.5% where it had hovered the week before, noted one trader in New York. Euro/dollar traded at USD1.0015 last week having traded close to USD1.01 the previous week.

Commerzbank has hired Stephane Carty and Vincenzo DiGennaro, equity derivatives traders at Lehman Brothers, to trade industry sectors. They will report to Eduardo Bastida, global head of equity derivatives in London.

Deutsche Bank has set up a global credit arbitrage investment arm that will scour the market for fixed-income securities and then either repackage or keep them on its balance sheet. The firm, dubbed Winchester Capital Principal Finance after its address at Great Winchester Street, London, could have a balance sheet topping hundreds of millions of dollars, according to market officials. Deutsche Bank decided to set this up now because the CDO market has reached a size where it makes sense to have an independent entity investing in different CDOs, according to market officials. Another official speculated that Deutsche Bank had not turned its attention to this before because it was making so much money from its structuring desk, however, now that CDOs are becoming harder to shift and margins are decreasing, it is looking for new opportunities.

The U.S. Internal Revenue Service has filed its answer to a petition made by two taxpayers regarding the taxation on proceeds of a so-called Structured Yield Product Exchangeable for Stock (STRYPES), according to court papers. In the impending case, to be heard at the United States Tax Court, the Internal Revenue is seeking that Bobby and Delaine Stevenson pay nearly USD25 million of tax on gains made from the transaction.

Five-year credit-default swap spreads on the world's third-largest food retailer, Ahold, yo-yoed last week after the company announced worse than expected results. Traders said protection jumped out to 270-280 basis points after the announcement but had come back to their original levels of around 225bps by Thursday.