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Five-year credit protection on British American Tobacco tightened by 10-12 basis points last week following a court ruling on the size of Altria Group's potential liability in a case for allegedly misleading smokers on the safety of light cigarettes. Credit-default swaps referenced to BAT traded at 85-89bps Wednesday. Protection on Altria, meanwhile started the week at 330bps and dipped as low as 191bps before coming back to 220-230 Thursday, according to a trader. There was good two-way business for BAT credit-default swaps for usual size trades of GBP5 million (USD8 million).

Two of BNP Paribas's fixed income derivatives marketers, Jin Oo Shin and Se Hoon Kim, in Seoul have left the firm. Reasons for their departures could not be determined by press time. The pair reported to T.S. Cheah, managing director and Asian head of derivatives and structured products in Hong Kong, who declined comment. Shin and Kim could not be reached.

Bear Stearns has transferred James Kenny, head of corporate bond trading in New York, to head the office's credit derivatives flow trading desk. Mark Davies, senior managing director and global head of credit derivatives in New York, said the move follows a reorganization that saw the former co-head, Martin St Pierre, move to London as global head of structured credit derivatives trading (DW, 9/7). Eric Langille, the other former co-head, recently left the firm and joined Commerzbank Securities, as head of credit flow trading (DW, 8/18).

Dresdner Kleinwort Wasserstein has hired Femi Adewale, credit-default swaps trader at Bank of America in London, as v.p. in a similar role. He will report to Paul Lewitt, head of credit derivatives flow trading in London, when he starts later this month. Lewitt declined comment.

One-month dollar/yen implied volatility leaped to 9.6% last Wednesday, up from 8.4% the previous week. The move came as many market participants started to think the Japanese currency was close to smashing through the JPY116 barrier, the Bank of Japan has been trying to protect. Last Wednesday the yen was trading as low as JPY116.15, down from JPY117.5 two days before. The currency pair had traded at JPY116.35 the previous week.

Jonathan Knight and Rick Lyon, managing directors and co-heads of convertible arbitrage proprietary trading at Goldman Sachs in New York, have both left the firm. Ed Canaday, spokesman in New York, said Knight and Lyon left several weeks apart from each other, with their responsibilities being assumed by existing members of the team. Knight and Lyon could not be reached.

Structured credit professionals are putting esoteric asset-backed securities, such as aircraft leases and manufactured housing, into synthetic collateralized debt obligations to boost yield. Firms are increasingly pushing multi-sector ABS deals, which also include a percentage of investment grade credit-default swaps, explained one investor. He added that he is not interested in these deals because these industries are in a bad way and even where they offer strong yields it is a lot of risk.

Rhicon Currency Management, a hedge fund manager with over USD250 million in assets under management, plans to launch two funds next year. One will be a futures trading fund and the other will be a systematic currency trading fund, according to Peter Jacobson, managing director in London.

Ritchie Capital Management, a Geneva, Ill.-based hedge fund, has launched a power and energy trading desk. Paul Wolfe, senior v.p. of business strategy and development, said the hedge fund has hired four traders from Williams Co.s, Duke Energy and Enron and plans to recruit one or two more over the next six months as it rolls out the project. The distressed state of the wholesale power sector and the withdrawal of many traditional energy trading shops is creating opportunities for the hedge fund, explains Wolfe.

Korea Life Insurance, Korea's oldest life insurer with assets totaling over KRW29.2 trillion (USD24.9 billion), plans to purchase credit-linked notes on domestic names. The insurer is looking at making an initial investment of some USD10-30 million, according to Myung Chool Kim, deputy general manager in the financial planning department in Seoul.

Jeffries & Co plans to establish a derivatives and options trading group in the near future. Scott Jones, the firm's director of equity sales, said it wants to be able to offer derivatives and options to its clients and will likely bring in a management team to do this. He was uncomfortable committing to a number, but said the team could be as many as 10-strong within a year.