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Commerzbank Securities plans to hire marketers, traders and structurers in the U.S. to work with corporate clients on risk intermediation trades. Sam Gottesman, head of derivatives and fixed income sales for the Americas in New York, said the firm is hunting flexible staffers who can work across the disciplines of equity, credit and convertible bonds as demand dictates.

Commerz Securities has hired Jarl Smidt-Olsen, equity derivatives trader at Mizuho Securities in Tokyo, and plans to groom him as a replacement for Patrick Sollinger, former head of index trading in Tokyo, who left earlier this year (DW, 4/25). Neil Brazil, spokesman at Commerzbank Securities in London, confirmed the move, but declined further comment. Smidt-Olsen, who is a six-year veteran of the Japanese market and has also worked at JPMorgan in Tokyo, declined comment.

Commerzbank plans to sell hybrid structured notes in Asia for the first time in the coming months. "With the low interest rate environment, we're going to push investment products harder next year," said Mike Plant, senior dealer in Hong Kong. The notes will combine interest rate and credit derivatives.

Henderson Global Investors, an international asset manager with USD149 billion under management, is considering using interest rate and credit derivatives in Asia for the first time from its newly minted fixed-income desk in Singapore. "These are ways to pick up performance where appropriate," said Tim Swadling, associate director of fixed interest in Singapore. Swadling transferred from the U.K. last Monday to establish the fixed-income operation.

Five-year credit protection on U.S. consumer finance firm Household International fought back to stand between 500-540 basis points last Wednesday, down 125bps on the previous week and recovering from a high of 900bps on Oct. 24. Equity and corporate bond rallies, combined with the effects of several collateralized debt obligations being issued, have tightened spreads, noted one trader. Anticipation of another interest rate cut in the U.S. has also peaked expectation of a continuing equity rally, which in turn has influenced spreads inward.

Rhicon Currency Management with over USD100 million under management, has launched its second foreign exchange fund and it will use over-the-counter derivatives. "This is for U.S. investors that can't invest in our offshore fund," said Christopher Brandon, managing director in London.

JPMorgan has laid off Philip Smith and Scott Adams, v.p.s and interest rate derivatives marketers, in its New York-based derivatives marketing team. Michael Dorfsman, spokesman in New York, said the cutbacks were part of the firm's plans to cut 2,000 staffers. Smith and Adams could not be reached for comment.

Derivatives professionals are expecting many junior staffers to take the brunt of lower bonus payouts this year, with many such workers anticipated to receive marginal sums, if anything at all. One credit derivatives head expects this year to be the first since 1998, in which derivative staffers walk away empty pocketed.

MEFF, the Spanish futures and options exchange, plans to start clearing large over-the-counter trades that mirror exchange-traded instruments. Fernando Centelles, deputy ceo in Madrid, said it is making the move because of derivatives traders increasing concerns about counterparty risk in OTC transactions. Firms are more cautious about counterparty risk because of deteriorating credit quality and an increase in the size of trades, according to Centelles. Trades are increasing in size because more traders are putting on relative-value strategies where the notional size of the trade has to be huge to profit from the arbitrage.

Eksportfinans, the Norwegian export credit agency, has entered an interest rate swap to convert a USD750 million bond offering into a floating-rate liability. Soren Elbech, head of funding and investor relations in Oslo, said the agency converts all of its fixed-rate debt to floating in order to maintain its AAA rating. "It is a hedging exercise," he explained. Elbech would not disclose what the agency is paying and receiving in the swap. The bond has a coupon of 3.875%.

Merrill Lynch has merged its global Strategic Solutions Group (SSG), a specialized group responsible for structuring and marketing derivatives-based transactions, into its derivatives sales division. Doug DeMartin, head of global credit products in New York and to whom the sales side reported, will head the new group.