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VR Leasing, the leasing specialist for Germany's co-operative banking movement in Germany, this week launched a Eu174.5m synthetic securitisation of finance lease contracts. DZ Bank, the co-operative banks' central bank, lead managed the deal, buying at closing a portfolio of loans from VR and transferring the risk through a default swap with the SPV. The top three tranches of public notes are invested in DZ's own covered bonds structured specifically for the deal, rated triple-A.

Bayerische Hypo- und Vereinsbank (HVB) this week sought capital relief with a Eu5bn partially funded synthetic securitisation of German residential mortgages, arranged and lead managed by the bank's investment banking arm. HVB has been a regular ABS issuer this year, with offerings from the Geldilux brand as well as through KfW's Provide programme. It expects its issuance tally to reach Eu25bn by the end of the year.

Cassa di Risparmio di Firenze, a regional savings bank based in Tuscany, this week returned to the securitisation market after a three year absence with a Eu512m securitisation of residential mortgages. The issue was lead managed by two of its shareholders, BNP Paribas and Banca IMI. Carifi's first deal, Perseo Finance, was just the second agency non-performing loan securitisation in the country. It has recently been upgraded by Moody's.

ABN AMRO plans to focus on exotic structured equity derivatives in the coming year and has hired two traders to achieve that goal. Alberto Cherubini, v.p. and equity derivatives trader, and Faisal Khan, director and equity derivatives trader, at Schroder Salomon Smith Barney in London have joined as senior equity derivatives traders. Both will report to Paris Badkas, global head of equity derivatives trading. Khan started a week ago and Cherubini is due to start today.

The Province of British Columbia has entered into a foreign exchange swap to convert the proceeds of a recent CHF400 million (USD274.7 million) bond offering into Canadian dollars. An official in Victoria, British Columbia, said the province never takes on unhedged Swiss franc-denominated debt. The bond was issued in a foreign currency in order to take advantage of attractive foreign exchange rates between the Swiss franc and the Canadian dollar, he added, declining further comment.

Volatility on dollar pairs including euro/dollar, cable and dollar/yen eased last week as fewer trades were executed in the run up to the holiday-shortened Thanksgiving week. Last Wednesday three-month euro/dollar volatility stood at 9.15%, down from around 9.5% where it had hovered the week before, noted one trader in New York. Euro/dollar traded at USD1.0015 last week having traded close to USD1.01 the previous week.

Commerzbank has hired Stephane Carty and Vincenzo DiGennaro, equity derivatives traders at Lehman Brothers, to trade industry sectors. They will report to Eduardo Bastida, global head of equity derivatives in London.

Deutsche Bank has set up a global credit arbitrage investment arm that will scour the market for fixed-income securities and then either repackage or keep them on its balance sheet. The firm, dubbed Winchester Capital Principal Finance after its address at Great Winchester Street, London, could have a balance sheet topping hundreds of millions of dollars, according to market officials. Deutsche Bank decided to set this up now because the CDO market has reached a size where it makes sense to have an independent entity investing in different CDOs, according to market officials. Another official speculated that Deutsche Bank had not turned its attention to this before because it was making so much money from its structuring desk, however, now that CDOs are becoming harder to shift and margins are decreasing, it is looking for new opportunities.

The U.S. Internal Revenue Service has filed its answer to a petition made by two taxpayers regarding the taxation on proceeds of a so-called Structured Yield Product Exchangeable for Stock (STRYPES), according to court papers. In the impending case, to be heard at the United States Tax Court, the Internal Revenue is seeking that Bobby and Delaine Stevenson pay nearly USD25 million of tax on gains made from the transaction.

Five-year credit-default swap spreads on the world's third-largest food retailer, Ahold, yo-yoed last week after the company announced worse than expected results. Traders said protection jumped out to 270-280 basis points after the announcement but had come back to their original levels of around 225bps by Thursday.

Sumitomo Mitsui Asset Management, expected to be Japan's largest asset manager with around USD100 billion under management when a merger of several Japanese investment firms comes into effect next month, will consider using credit derivatives for the first time. "We're closely monitoring this market," said Makoto Takahashi, head of the fixed income group at Sumitomo Life Investment Co., Japan's largest investment advisory firm with over JPY8 trillion in assets and one of the companies that will form the new entity.