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Alcoa, an aluminum producer with more than USD20 billion in annual revenue, may enter an interest-rate swap following its recent two-part USD1.4 billion bond sale. William Plummer, treasurer in New York, said, "We are considering the fixed-versus-floating of this new debt issue because in the current market environment with a steep yield curve, floating is attractive." In any swap, the Pittsburgh-based company would seek to pay a spread over LIBOR and receive the fixed-rate coupons on the bond.

The cost of U.S. dollar/Japanese yen options rose a full percentage point last week as the dollar fell to JPY116.50 on Wednesday, its lowest level in more than a month versus the yen. Implied vol and the dollar tend to move inversely, as the long-term trend has been dollar strength and a move away from that implies broader uncertainty, traders said. One-month implied vol rose to 11.5% on Wednesday in New York, up from 10.5% on Monday, mirroring the greenback's fall from JPY119.50 earlier in the week, according to fx options traders.

Credit-default protection on auto giant Ford Motor Credit went on a see-saw ride last week, widening almost 40% at one point before settling down as the week progressed. All of this occurred despite the lack of negative credit news in what traders are calling yet another indication of the volatile credit environment. Instead, traders said it was a technical issue, rumored to be seller of short-dated Ford bonds. Midmarket five-year protection rose to 510 basis points over LIBOR from 380 basis points the previous week, setting a record wide for five-year protection on the credit. It later settled at 430bps late Wednesday in New York. "This is really a pristine name and that kind of move is unprecedented without any news," said one trader. Similar moves occurred in the cash market.

LG Card, one of Korea's largest credit card companies in terms of assets with KRW31.8 trillion (USD26 billion) in assets, recently entered a cross-currency interest-rate swap on the back of a three-year USD200 million U.S. dollar floating bond offering issued last week. "Our business nature is local--we don't want foreign exchange exposure," said Jae Gwang Soh, manager in the finance department in Seoul, explaining why the company converted the entire issue into won.

JPMorgan has hired Jason Li, interest-rate derivatives trader at Bank of America in London, in a similar position in Hong Kong, according to Aaron Poon, head of rates trading at JPMorgan in Hong Kong. Li will cover the Hong Kong dollar market when he starts next month.

Merrill Lynch has hired Yuka Tanaka, fixed-income structurer at Deutsche Bank in Tokyo, as a credit derivatives structurer in Tokyo, according to officials at the firm. Tanaka will primarily work on synthetic collateralized debt transactions and is a replacement for Hideyuki Kudo, who recently joined Dresdner Kleinwort Wasserstein as a senior credit derivatives structurer in Tokyo.

Manitowoc, a Midwestern industrial manufacturer with annual revenue of roughly USD1.2 billion, is "strongly considering" entering its debut fixed-to-floating interest-rate swap, according to Carl Laurino, treasurer and interim cfo in Manitowoc, Wis. He said the company expects to take advantage of current rates and convert a fixed-rate, high-yield bond it sold earlier this month into a synthetic floater. Converting the USD175 million deal would be the first time it has switched from fixed into floating, although it has used interest-rate swaps in the past to convert floating-rate debt into fixed-rate obligations. The company has about USD700 million in outstanding debt.

Merrill Lynch has hired Tim Apatu from Barclays Capital in London, as a director in the corporate fx sales group in London, focusing on U.K. corporate clients. He will report to John Langley, director in European issuer sales, according to a Merrill spokesman.

Spintab , a Swedish mortgage bank, has entered a foreign-exchange swap on the back of a floating-rate EUR50 million (USD48.85 million) medium-term note to convert it into a Swedish krona-denominated bond and will continue to enter similar swaps throughout the year. Stefan Abrahamsson, dealer in Stockholm, said the bank uses currency swaps on all of its offerings within its MTN program because it issues the bonds in euros, dollars or other major currencies, but needs to fund its mortgage portfolio in Swedish krona. Abrahamsson would not disclose the exchange rate on the swap. If the bank issues fixed-rate MTNs in the future, it will also use interest-rate swaps to convert fixed-rate exposure into floating, he added.

Royal Bank of Scotland Financial Markets has launched a structured credit derivatives desk in Hong Kong for the non-Japan Asia region, according to Anthony Yuen, managing director and Asia treasurer in Hong Kong. "We intend to do a wide range of things," said Yuen. The firm recently hired former Société Générale veteran Tak Leung as Asia ex-Japan head of structured credit product sales. Leung said he will handle products such as credit-linked notes and synthetic collateralized debt obligations, declining further comment.

"The U.K. warrant market has a zero chance of success."-- Johan Groothaert, managing director and head of equity structured products and alternative investments at Deutsche Bank in London, commenting on why Deutsche Bank decided not to enter the U.K. warrant market. For complete story, click here.

Five-year credit derivatives on retailer Sears, Roebuck widened roughly 75 basis points last week, on concerns the sluggish U.S. economy and anemic stock market will deter retail customers from spending, according to traders. Mid-market credit-default spreads began the week at around 105bps before widening to 180bps and then tightening to the 150bps level by late Wednesday in New York. "It started to widen out on recessionary fears, that people will be keeping cash in their pocket," said one trader in New York.