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Hedge funds and prop desks were loading up short bond/long Italian credit-default swap positions last week and the convergence pushed CDS spreads on the sovereign to the widest levels in six months.

Fund derivative desks are picking up protection-writing on credit hedge funds, targeting credit investors looking to get extra returns from current tight spreads.

Home-equity loan issuers, including People's Choice and Saxon Mortgage, are looking at buying protection on the new synthetic sub-prime residential mortgage-backed securities index to hedge securitizing costs and basis risk.

An ad hoc European forum discussing legal issues of distributing retail investment products is stepping closer to a plan to establish best-market practices.

ING Wholesale Banking is preparing to close a structured Asian fund in Malaysia which the firm believes is a first for the domestic market.

Adam Dixon, head of structured credit marketing to German, Austrian and Swiss financial institutions at JPMorgan in London, has quit the firm.

--Tim Hoffman, senior v.p. in capital markets at Saxon Mortgage in Richmond, Va., commenting on the merits of the ABX synthetic mortgage-backed securities index.

Loan portfolio managers who operate sideline credit derivative portfolios are desperate to find ways to tackle red ink in their profit-and-loss.

Neil Walker, managing director and global co-head of correlation trading at Merrill Lynch in London has quit the firm.

Morgan Stanley has signed up Pan Tan, v.p. in credit trading at Bank of America in London, as a v.p in structured credit products.