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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.

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

Iberdrola International has entered an interest rate swap on a recent EUR100 million (USD107 million) medium-term note offering in order to achieve its target funding rate. The Spanish utility attracted French investors to the deal by offering the debt with a floating-rate coupon pegged to EONIA--the Euro Overnight Index Average. In the swap, Iberdrola is paying a Euribor-based rate and receiving EONIA plus 30 basis points, according to Pablo Llado Figuerola Ferreti, director of capital markets at Crédit Agricole Indosuez in Madrid, the swap counterparty on the transaction. Luis Carlos Martínez, communications manager at Iberdrola in Madrid, declined comment.

Bank of America, Barclays Capital and Deutsche Bank cut all trading lines, including derivatives, with Westdeutsche Landesbank late last month in an attempt to force it to agree to a debt refinancing. The lines were reopened within three days--the Deutsche Bank line was restored March 29, and lines with BofA and Barclays were reinstated over the next two days--the morning after the refinancing closed, says one banker. He noted the lead agents' move meant that WestLB was unable to trade any products with the firms.

BlueStar Capital, a U.S.-based fund of hedge funds manager, will short healthcare and biotech exchange traded funds if its BlueStar Life Sciences fund of funds net equity holding sinks below preset targets. Jonathan Lack, ceo and portfolio manager in Westport, Conn., said shorting healthcare or biotech ETFs would allow the fund of funds' asset allocation to be rebalanced within its investment objectives.

Foreign exchange derivatives professionals met last week at a City seminar to discuss the future of the industry and predicted Main Street would start trading barrier options in their pension funds and computers would take over risk management. "We may be able to trade barriers and digital options as part of our pension funds. I'm looking forward to that," said Bernd Broker, head of foreign exchange for Europe at Bear Stearns in London. He continued that the main change in foreign exchange derivatives is likely to be in the way they are sold. "Most of the good innovative ideas have appeared already and people don't want to go much further, because then only about 2% of investors will want to be involved."

John Mullen, ABN AMRO's London-based global head of structured credit, has left the firm after only a year in the position. It could not be determined what prompted his departure. Mullen, who left last week, could not be reached for comment.

John Mullen, ABN AMRO's London-based global head of structured credit, has left the firm after only a year in the position. It could not be determined what prompted his departure. Mullen, who left last week, could not be reached for comment.

Barclays Capital has hired Michael Brian, head of prime brokerage sales at Merrill Lynch in London, as head of European equity prime brokerage sales in London. Brian will report jointly to Martin Malloy, responsible for global equity finance trading in New York and Alasdair Hodge, regional managing director of the collateralized finance business in London. Malloy confirmed the hire. Kerry Goodwin, spokeswoman at Barclays in London, said Brian's hire is part of the firm's plans to expand the desk.

The economic crisis of 1998 left the Russian financial markets in shambles. One of the areas most affected was the young yet, at the time, sprawling derivatives market. In the aftermath of the crisis, courts declared non-deliverable forwards to be a form of gambling--thereby negating judicial protection of claims. This made it possible for Russian parties to international derivatives contracts, especially banks, to refuse settlement without having to face the consequences. The following article addresses what has and has not changed since 1998 and describes the current practice of derivatives trading in Russia. It then points out current promising developments, and discusses a likely future scenario.