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Lehman Brothers has recently started offering hybrid credit-default swaps that either enhance yield for sellers of protection or reduce the cost for purchasers. These credit products include an additional derivative component, such as an fx or interest rate option, explained Georges Assi, director in structured credit trading at Lehman in London.

UBS Warburg is looking to expand its emerging markets fixed income derivatives trading capabilities in the coming months. The firm will likely start trading Mexican peso derviatives in January, with Chile's and Brazil's yeilds curves being next on the list, according to Joonkee Hong, global head of emerging markets derivatives in New York.

Merrill Lynch has promoted Jason Brand, head of corporate finance in Tokyo, to become head of its global investors clients group, which is responsible for all debt sales, in New York. The position was vacated in September, when Doug DeMartin, who had previously filled the role, became head of global credit products in New York, according to a firm official. Brand confirmed the move, but declined further comment.

Rentokil Initial, a holding company best known for its pest control business, is looking at using foreign exchange derivatives to hedge exposure to currency fluctuations, according to Edward Collis, deputy treasurer in East Grinstead, U.K. He referred further questions toTony Stephens, a spokesman, who denied the company is reviewing its revenue hedging strategy, but declined further comment. Rentokil made headlines in the financial press recently when it admitted taking a GBP10 million hit to profits in the first 10 months of the year due to adverse currency movements in the U.S. dollar and in Asian and South African currencies.

Bermuda-based hedge fund manager Green Cay Asset Management expects to buy equity options on hard assets, including assets from the energy, real estate and materials sectors. Jane Siebels, ceo and cio in Nassau, Bermuda, said the the soon to be launched Siebels Hard Asset Fund will use equity options to invest, when it cannot buy shares.

Tesco Plc, a U.K. supermarket chain with GBP23.7 billion (USD37.2 billion) in annual sales, is examining the possibility of using credit derivatives for its investment portfolio. Keith Richardson, treasurer in Cheshunt, U.K., said the company has just begun speaking to investment banks to get a better grasp of the market. However, he said this is not an imminent foray and declined to disclose to which firms it is speaking.

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.