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The launch of the U.S. LCDX loan credit-default swap index in the first quarter of next year has been a priority for the trade association's credit derivatives group.

Bank prop desks were selling volatility across currency pairs and maturities last week, driving down long-dated implied volatility levels.

--Kimberly Summe, general counsel at the International Swaps and Derivatives Association, sums up the level of interest in the trade body's loan credit-default swap and index projects.

Expectations of increasingly high leveraged buyout risk and continued low default risk in the European credit market are expected to fuel product innovation in 2007.

Merrill Lynch has hired John Hejndorf Kristiansen, director in Scandinavian flow credit sales at Deutsche Bank in London, to market synthetic and cash collateralized debt obligations to the Nordic region.

Credit traders were focused on the quarterly roll of credit-default swap contracts last Wednesday, as investors looked to sell CDS they deemed over-priced.

The International Swaps and Derivatives Association is preparing standardized documents for property swaps.

ISDA is aiming to publish shariah-compliant derivatives documents this year.

"The game will be equity--that's where the value is."--Aditya Rana, executive director at Morgan Stanley in Hong Kong, on an uptick in demand for equity tranches of synthetic collateralized debt obligations, as range-bound spreads make the first-loss tranche more attractive to investors (DW, 1/23).

Hedge-fund-linked structurers have been looking at ways to offer exposure to hedge fund sectors and single-name funds this year and the trend looks set to continue into next.

The association will be looking at converting long-form documents for structured credit products to standard terms, where there's appetite.

This is another major project for the credit derivatives working group for next year (as it has been for this as well).