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Marten Touw, head of the markets division at Shinsei Bank in Tokyo, has resigned, according to officials at the bank. Reasons for his departure could not be determined but officials said that a replacement is still being chosen. Touw joined Shinsei last year from Standard Chartered Bank where he was the head of global markets for North East Asia (DW, 2/18/01). At Shinsei he reported to Brian Prince, ceo in Tokyo. Prince was on vacation and could not be reached. Yoshi Nakagawa, spokesman in Tokyo, declined all comment.

Deutsche Bank and Credit Lyonnais are preparing separately to close the first Taiwan-dollar denominated credit derivatives in Taipei as they recently received dealing licenses from the Ministry of Finance. "This is a natural route for the market's development," said Bryan Yap, co-head of emerging markets-Asia; fixed-income and derivatives trading in Singapore. A marketer at JPMorgan in Taipei said the firm is currently in the process of applying for such a license, declining further comment.

Scottish Life International has written equity puts on behalf of its investors to structure a reverse convertible note for a new fund, dubbed Select Income & Growth Bond 3. The puts have a knock-in feature at 70% of the value of the worst performer of either the FTSE 100, the Standard & Poor's 500, or the Dow Jones EURO STOXX 50. Neil Lovatt, director of marketing development at SLI, estimated the fund would be approximately GBP30 million (USD45.58 million), which is also the notional size of the equity puts.

The Taiwanese structure note market is expected to double before year end as more firms start marketing the products. Toronto Dominion Bank, Credit Lyonnais and Chinatrust Commercial Bank all have plans to market notes, such as inverse floating-rate notes where investors receive a higher coupon if rates are cut. Charles Chen, head of treasury at Toronto-Dominion Bank in Taipei, said TD is looking at this now because interest rate swaps are more liquid, and with the current high volatility the pricing on these notes is attractive. Eric Wu, manager of the derivatives department at Chinatrust Commercial Bank in Taipei, said his firm is responding to growing client interest.

"We don't expect large sections to be cut or added."-- Richard Metcalfe, co-head of the International Swaps and Derivatives Association's European office in London, commenting on the latest equity derivatives draft definitions. For complete story, click here.

UBS Warburg is structuring a EUR1.5 billion (USD1.48 billion) collateralized debt obligation, which is its first euro-denominated securitization of counterparty credit risk from its derivatives books. It will be marketed primarily to European investors, but the underlying collateral will be globally diversified, according to an official familiar with the transaction. The purpose of the deal is to shed credit risk and is a joint venture between the firm and its largest clients. The deal allows UBS to take on more credit risk. Officials at UBS declined comment.

Westdeutsche Landesbank has hired Janaka Withana, interest rate derivatives trader at Merrill Lynch in New York, in a similar role for the German bank's New York office. Withana, who started last month at WestLB, will run the mortgage-backed and asset-backed swaps books. He reports to Sean Tully, head of all rates and derivatives trading for the Americas. Calls to Tully were referred to the firm's press office where Sam Ostrow, a spokesman, declined comment.

The cost of U.S. dollar/euro options rose slightly last week in line with a one-cent move higher in the value of Europe's single currency. Implied volatility for one-month dollar/euro options rose to 10.5%, up from 10.2% to start the week, in what traders described as a holiday-type market with a short week in the U.K. and Labor Day approaching in the U.S. In the current cycle, vol and the euro have moved inversely. The euro appreciated to USD0.98 late Wednesday from USD0.97 Monday. "We've had some weakness in the dollar so that's put a floor on volatility, but no one really wants to buy or sell right now," said one options trader, adding, "it's a stalemate."

BNP Paribas recently issued a JPY160 billion (USD1.35 billion) private synthetic collateralized debt obligation in Japan, with plans to issue another this month. Stephane Delacote, head of credit derivatives in Tokyo, said, "This has become a regular business for us now." He added that the private deal was the sixth CDO for the French bank in Japan. "Now we're working to get number seven out," he said, adding that the next CDO could be out later this month. Delacote said there is still steady demand in Japan.

Credit-default protection on Canadian industrial giant Bombardier widened by roughly 50 basis points last week, after the company's quarterly profits sank by two-thirds from a year earlier. Five-year default-swap spreads widened to 270 basis points Wednesday up from about 220bps earlier in the week, according to traders. The company announced the earnings late Tuesday, sending protection wider Wednesday morning. Protection on subsidiary Bombardier Capital also widened a similar amount to 320bps. Traders said the move wider may have been exacerbated by thin markets last week, following a U.K. holiday and in advance of a U.S. one. "It's a big move for them, but when markets are thin stuff tends to get exaggerated one way or another," said one trader in New York. Bombardier's report attributed the lower earnings to a slower economy and a reluctance of companies to spend on items such as corporate jets.

BG Energy Capital, guaranteed by BG Energy Holdings, has entered a cross-currency interest rate swap to convert a recent EUR22 million (USD21.49 million) fixed-rate medium-term note into a U.S. dollar-denominated floating-rate offering. The company plans to use similar foreign-exchange and interest rate swaps for future issuance from its euro medium-term note program, said Charles Stewart, head of funding and investment in Reading, U.K. In the swap, BG Energy Capital is paying LIBOR plus a spread and receiving the fixed coupon on the bond, which Steward declined to disclose.

The People's Bank of China is preparing to issue derivatives guidelines that could double the size of the mainland's non-renminbi derivatives market. The guidelines are expected to give formal approval to foreign banks to trade directly with end-users before year end, a move cheered by international players. "Everyone's gung-ho on the prospect of a fully-fledged business in China," said Frédéric Lainé, Asian head of fixed income and derivatives at Credit Lyonnais in Hong Kong. Traders said the derivatives market in China could double in the next 12 months to USD10 billion a year as a result of the liberalization.