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Skipton Building Society, with GBP6.6 billion (USD10.68 billion) in assets, is planning to begin using foreign exchange swaps for its GBP1.5 billion medium-term note program later this year. Richard Dickinson, balance sheet risk manager in Skipton, U.K., said the thrift funds its lending portfolio entirely in sterling, but would like to diversify its funding base and reduce costs by issuing in foreign currencies and using fx swaps to convert proceeds into sterling-denominated liabilities.

Wachovia Securities has hired Mark Kohn, an associate on the equity derivatives trading desk at Morgan Stanley, to work in a similar role in New York. Kohn declined comment. Todd Steinberg, managing director and head of equity linked products in New York, confirmed the hire and declined further comment.

"We took them to court because they did not pay up on a contract that we thought they should honor."--James Barratt, head of the credit group at Nomura International in London, explaining the motivation behind its court case against Credit Suisse First Boston. For complete story, click here.

Huge inflows into U.S. fixed income cash funds is keeping credit-default spreads tight when most credit derivatives traders would otherwise expect the possibility of war in Iraq to be forcing widescale spread widening. Concerns over a U.S.-led war would typically increase the volatility of credit-default swaps, however, since January the market has instead been seeing general spread tightening in tandem with increased anticipation of a U.S. strike against Iraq, noted one trader. The Walt Disney Co. is one name thought to be particularly susceptible to spread widening in the event of war, however traders noted that although it moved wider by around 10 basis points last week, standing at 110bps last Thursday, movement on the name has been tempered since the beginning of the year.

ABN AMRO and Deutsche Bank plan to separately launch identical unfunded swaps referenced to the iBoxx index, a European fixed income index jointly complied by seven market makers. The two firms are going to be joint market makers in the swaps, meaning that they will both make prices for investors, to offer more transparency and liquidity, according to officials at both firms.

The Credit Risk Mitigation subcommittee of the Basel Committee on Banking Supervision has said it will recommended that restructuring is not required as a definition of a credit event in credit-default swaps in order for the buyer to get regulatory capital relief, except where the protection buyer has no control over restructuring events. Robert Pickel, ceo at the International Swaps and Derivatives Association in New York, welcomed the move saying the decision demonstrates more latitude on the issue than Basel has previously shown. He noted, however, that the final say on the matter rests with the Basel committee.

Morgan Slade, former head of statistical arbitrage trading for the proprietary trading desk at Merrill Lynch, is reportedly in talks to join a fund run by Texan billionaires Sid and Lee Bass. Slade is predicted to start work on the Sid Bass managed BBT Fund, according to an official familiar with Slade's plans. Clive Bode, spokesman for the Bass brothers in Forth Worth, Texas, declined comment and Sid Bass could not be reached by press time. Slade did not return calls.

Singapore-based Crédit Agricole Asset Management, with over USD2.5 billion in assets in Asia, is looking to trade credit default-swaps (CDS) for the first time within 12 months. "This [process] takes time," said an insider. The fund has shied away from the CDS market until now because its investor base is fairly conservative but these investors are coming around because of improving liquidity.

Japanese banks and credit derivatives end users are starting to put collateral agreements in place, a move which market players expect will boost volumes. "In Japan, asking for collateral has been a pride issue," said Junichi Kamei, policy director and head of the Tokyo office at the International Swaps and Derivatives Association in Tokyo. Requiring collateral for derivatives had been seen as a lack of creditworthiness and therefore was regarded as evidence of a loss of face by many local players. However, as Japanese banks look to reduce their capital adequacy ratios they are now quietly pushing for collateral agreements. Such arrangements are also beneficial to end-users by allowing them to reduce their exposure to the banking sector, a lot of which is teetering on the brink of bankruptcy because of the number of non-performing loans.

Jack DiMaio, head of fixed income for North America at Credit Suisse First Boston, is moving to sister outfit Credit Suisse Asset Management (CSAM) to take a senior global position. The asset manager expects to appoint a new ceo and DiMaio will likely take this role or a fixed income role reporting into the ceo, according to an official familiar with the plans. Either way he will likely boost the alternative investments arm of the asset manager, developing products such as convertible arbitrage funds, said the official. If DiMaio gets the ceo role he will report to Jeffrey Peek, vice chairman of CSFB. The asset manager has over USD280 billion in assets under management, of which USD3.5 billion are in alternative assets. DiMaio declined comment and Peek did not return calls.

Deutsche Bank executed USD2 billion (notional) in U.S. dollar/yen straddles Wednesday, causing one-month implied volatility to rise to 9.9% from 9.4%. In the trade, Deutsche Bank bought one-month at-the-money straddles, in which it purchased dollar calls/yen puts and sold dollar puts/yen calls, according to a trader at Deutsche Bank. Traders said spot was trading at JPY121 when the trade went through the market.

Credit Suisse First Boston International would be able to present a robust case if it chooses to appeal last week's ruling at the High Court in London, in which it lost a GBP1.2 million (USD1.9 million) credit derivatives case it brought against Nomura International, according to derivatives lawyers. Immediately after handing down judgment in Nomura's favor on Thursday, the Honourable Mr. Justice Langley rejected a request by CSFB's lawyer to refer the case to the appeals court. CSFB can, however, apply directly but would have to shoulder the GBP25,000 cost.