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Asset managers of synthetic collateralized debt obligations are increasingly taking on mezzanine exposure in their own deals to pacify CDO investors and lead managers seeking to forge a more explicit alignment of interests between asset managers and their product as notes take over from equity as the hardest part to sell. Canadian giants RBC Capital Markets and CIBC World Markets are both independently in talks with third-party managers with a view to creating their respective first externally managed synthetic CDOs globally, said officials. In both cases the manager will be expected to buy mezzanine tranches, they added.

Maria Baum, senior trader in volatility arbitrage and other strategies on the proprietary desk at Commerzbank Securities in New York, has headed to Lehman Brothers. Baum could not be reached. Mark Sanborn, managing director at Lehman in New York, to whom Baum likely reports, did not return calls. Baum is understood to be filling a new position, with Lehman reportedly seeking to beef up its proprietary trading operation, said an official familiar with the hire.

Lehman Brothers has added Mark Versey, U.K. equity derivatives salesman at Deutsche Bank in London, as a salesman in Lehman's fixed-income derivatives solutions team, reporting to Philippe Dufournier, head of the fixed-income derivatives solutions team. Jessica Shepherd-Smith, spokeswoman in London, confirmed the move. Dufournier did not return calls.

Merrill Lynch has hired Mitch Matharu and Sreenivasan Iyre, structurers in the emerging markets structuring group at Credit Suisse First Boston in Hong Kong, for similar roles in its strategic solutions group. "As the Asian market continues to mature, clients are increasing their appetite for derivatives," said Samir Atassi, director and head of the strategic solutions group at Merrill in Hong Kong, to whom the duo now report. The group handles interest rate, foreign exchange and credit structuring for institutional and corporate clients.

Nordic Investment Bank, a multilateral financial lending institution, has entered two interest rate swaps on a recent fixed-rate USD1 billion bond offering to convert the issue into two floating rate liabilities--one denominated in euros and one in U.S. dollars. Kari Kukka, head of funding in Helsinki, said the Nordic Investment Bank sold a dollar-denominated bond because it allowed the institution to achieve a favorable funding rate, but it converted USD500 million of the proceeds into euros because it has some lending requirements in that currency. Both swaps match the five-year maturity of the bond.

"There has been a lot of interest on the buyside for [synthetic convertibles] because the convertibles market is almost completely busted--there is a lot of money chasing very little issuance."--Pavel Verzhbitsky, convertibles research analyst at Lehman Brothers in London, commenting on why investors are starting to buy synthetic convertible bonds. For complete story, click here.

Scotia Capital has hired Miranda Zhao, v.p. in the structured products group at Deutsche Bank in New York, as a structured credit marketer in London in a new position to increase its profile among investors. "There are more and more investors [in collateralized debt obligations], but it is a challenge to meet their requirements as they have become more demanding," said Frank Ackermann, head of investor marketing in the credit derivatives and credit investments group in London. "At the same time, we are seeing spread tightening, which makes it harder to generate the pay outs to compensate for the risk."

The Royal Bank of Scotland has hired Trevor Vail, credit derivatives trader at ING Financial Markets in Hong Kong, as Asian head of credit trading to set up a trading desk in Tokyo. The firm already trades Japanese credit derivatives out of London, but is now establishing a local desk, according to Pierre Ferland, branch manager and treasurer in Tokyo.

Colm O'Shea, managing director at Citigroup Global Markets, has joined Soros Fund Management in New York. At Citigroup, O'Shea was responsible for managing a Treasury bond portfolio, which included derivatives, and will likely have similar responsibilities in his new position, said an official familiar with the move. O'Shea could not be reached.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.