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KGI Securities Co., part of the KGI Group, which has USD6.5 billion in assets, is considering purchasing credit derivatives for the first time in Taiwan's newly-opened onshore credit market. "We're just starting to look at this," said Jeffery Huang, head of interest rate derivatives in Taipei.

Thai Farmers Asset Management, the asset management arm of domestic banking giant Thai Farmers Bank with assets of over THB130 billion (USD3.04 billion), is getting ready to purchase equity-linked and credit-linked notes the first time. "We think that with interest rates so low and with equity prices having more upside potential, it's a good opportunity to use leveraged products," said Yingyong Nilasena, first senior v.p. of fixed income in Bangkok. The fund has looked at using structured notes since last year (DW, 8/25) but has been held up by documentation and pricing issues, on which Nilasena declined to elaborate.

UBS Warburg is bringing aboard Haitong Wang, a marketer at Goldman Sachs in Hong Kong, to cover fixed income derivative products for China. Wang, who starts later this month, will report to Philip Tsao, managing director and joint head of the Asian debt capital markets group in Hong Kong, according to Mark Panday, spokesman at UBS. Tsao declined comment and Wang could not be reached.

UBS Warburg has hired Jeff Herlyn, managing director in managed CDO structures, and Michael Rosenberg, v.p. in managed CDO structures at JPMorgan in New York, to co-head its global CDO business. Sal Naro, managing director and co-head of global credit derivatives in Stamford, Conn., to whom the new recruits report, said the firm made the hires to expand its credit trading and structuring platforms. Neither Herlyn nor Rosenberg could be reached for comment.

National Fuel Gas, a Buffalo, N.Y.-based diversified energy company with approximately USD1.4 billion in annual revenue, is expecting to enter into its first interest rate swap in the coming months. Ronald Tanski, senior v.p. and controller, explained the utility envisages entering into a fixed-to-floating swap in response to an anticipated decline in the portion of floating rate debt in its capital structure.

"We're just starting to look at this."--Jeffery Huang, head of interest rate derivatives at KGI Securities Co. in Taipei, commenting on his firm's plans to examine credit derivatives. For complete story, click here.

United Utilities has entered a cross-currency interest rate swap on a recent JPY3 billion (USD25.4 million) bond offering and plans to tap the capital markets for GPB500 million to GBP1 billion this year, on which it will enter interest rate swaps. Tom Fallon, treasurer in Warrington, U.K., said the company always uses interest rate swaps to convert fixed-rate debt into floating rate, because it is a better liability match for its income, which is generated from regulated monopolies and is indexed to inflation.

Frankfurt-based DWS Investments is waiting for the European Central Bank to stop cutting rates before putting on a curve flattening trade. Johannes Mueller, portfolio manager responsible for a E2 billion European government bond portfolio, says he expects the yield curve to flatten once the ECB stops its rate cuts.

Harris Investment Management recently reduced its holdings in 10- to 30-year U.S. Treasuries and has been using some of the proceeds to buy short-duration premium home equity loans (HELs) in the secondary market. Maureen Svagera, portfolio manager of the $400-450 million asset-backed and commercial mortgage-backed portfolio, says investing in HELs shortens duration in anticipation of a recovery and an increase in interest-rates after the anticipated war with Iraq shows signs of a resolution. Harris has also been putting assets in short-duration corporates and mortgage-backed securities.

Getting in touch with the Oreck Corporation about a buyout credit last week was no Big Easy task, as employees were let off work to celebrate the Mardi Gras holiday. The New Orleans-based office was closed for the Bourbon Street festivities last Tuesday and no one was answering calls on Wednesday or Thursday either.

Wayne Schmidt, portfolio manager at Advantus Capital Management, will rotate 5% of the firm's $1.5 billion portfolio, or $75 million, from Treasuries into a combination of corporates and mortgage-backed securities. Schmidt plans this move over the next month, when he predicts the Treasury market will rally to a point where profit taking will make sense. He says that a war with Iraq will produce a flight-to-quality but that the rally will be short lived, as uncertainty will be resolved. His trigger for the move is when the 10-year Treasury drops to 3.25-3.50%. Last Tuesday, the 10-year Treasury had a 3.64% yield.