Search results for

United Airlines' bankruptcy filing last week caused investors to purchase protection on related names. Five-year protection on Rolls Royce, which makes airplane engines, blew out to 175 basis point/185bps Wednesday from 140bps/160bps on Monday. Default swaps on Bombardier also widened to a low of 500bps from 455bps/460bps, protection on Disney widened to 87bps/97bps from 68bps/78bps and swaps on Boeing widened to 65bps/80bps from 50bps/75bps. A trader explained Disney is linked to the airline industry because it owns aircraft which it leases to airlines.

UBS Warburg is planning to hire a head of corporate derivatives in the U.S., according to industry insiders. One official familiar with the firm's plans said UBS had originally decided not to replace Scott Giese, the former head who left in the summer, but is now going back on that decision. The official was unable to specify why UBS has reversed its decision. Another market official said senior management had already decided to hire a head of corporate derivatives but it will need to be approved by the board.

Germany's Westdeutsche Landesbank has transferred Robert Brennan, U.S. head of derivatives in New York, to Tokyo as the Asian head of the market risk group. Brennan said the position had been vacant since early in the year and that the existing team handled the responsibilities until Brennan was chosen for the job. "This is an important market for us and we're approaching it with a viable business plan," said Brennan, adding he is looking to boost WestLB's presence in Asia. In addition to Tokyo, Brennan is responsible for the group's operations in Singapore and Sydney. He continues to report to Ian Clifton, global head of the market risk group in London.

If you don't get it right the first time, try and try again...Last Monday, a man botched an attempt to rob a First Union Bank in central Pennsylvania. Police said the thief handed the teller a note, which the teller handed back upon finding it illegible. He then left the bank, and has not yet been caught. The same man is suspected of robbing a Commerce Bank across the street on Wednesday.

Greg Sweeney, portfolio manager with Northern Capital Management, says he would like to rotate 15% of the firm's portfolio, or $45 million, from corporates into Treasuries. He will not make the move until he sees a sharp decline in Treasury prices. Sweeney says his target for the move would be a 10-year Treasury yield moving up to 5% from 4.06% as of last Monday. For the move to take place, he continues, the two-year Treasury yield should move up to 2.70% from 1.84% and the five-year yield, from 3% to 3.75%. Sweeney says that once the yield curve is more "fairly priced," he will add Treasuries because at a current 10% allocation, he is under-allocated for an asset class that usually makes for 25% of his portfolio. However, because the economy remains sluggish, Sweeney does not anticipate making this move before the middle of next year.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

Aegon Spain, which manages E850 million from its Madrid office, will add telecom bonds once the companies are upgraded to single-A or above. Enrique Marazuela, portfolio manager, says next year he will start to buy bonds that he has not touched this year, because their credit fundamentals are starting to improve and companies are working themselves out of the third-generation telephony licensing fiascos. He expects to see upgrades in the sector. He says he will buy the incumbents such as France Telecom, Deutsche Telekom and KPN once they are upgraded to single-A, because they represent good value. He expects upgrades to come gradually as these telecoms begin to de-lever. Aegon cannot own bonds rated lower than single-A.

Credit derivatives houses are waiting for the outcome of the U.K. government's restructuring plans for British Energy before triggering credit protection. One credit derivatives trader, however, said lawyers at his firm are examining triggering swaps under a bankruptcy clause, claiming that it has taken "action in furtherance of, or indicating its consent to" bankruptcy.

Hollywood Entertainment's solid market share of the video retailing industry provides support to the new $250 million credit facility, despite the company's subordinate ranking to industry-giant Blockbuster. Hollywood controls 11% of the market share, compared to Blockbuster's 40% share. But, "The rest of the market is pretty fragmented," said Diane Shand, Standard & Poor's analyst. The rating agency has assigned a BB- rating to the credit.

C-Bass V, an asset-backed securities collateralized debt obligation originated by C-Bass, a mortgage investment and servicing company specializing in credit sensitive residential mortgage-backed securities, is expected to close this week. Deutsche Bank is the lead underwriter for this $350 million transaction. C-Bass has four ABS CDOs outstanding. Michael Herzig, head of global CDOs at Deutsche Bank, was traveling and did not return calls seeking comment. John Draghi, cio at C-Bass, did not return calls.