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Provident Bank, a Cincinnati lender with USD15.7 billion in assets, has entered an interest-rate swap with Credit Suisse First Boston to convert a fixed-rate bond offering its parent company sold recently into a synthetic floater, said Lou Helligrath, v.p. in treasury services in Cincinnati. The bond was sold by holding company Provident Financial Group.

Deutsche Bank is planning to market its weather derivatives products globally. Ross McIntyre, director and head of weather risk, said the group has been focusing on Europe, but is now seeking business in other regions, mainly North America, Australia and Japan. McIntyre said the driving force behind the expansion has been inquiries from customers in those regions. Previously, Deutsche Bank would have made prices in response to customer inquiries, but had not been proactive in finding new customers, McIntyre said.

Fortis Bank has structured a reverse convertible note with a knock-in put referenced to Unilever. Koen Zoutenbier, senior account manager on the derivatives and structured products desk in Amsterdam, said the notes have a strike price of EUR55 and knock-in if the share price hits EUR40. Implied volatility on the put was 31%, when the trade was designed last month, compared with two-year historical vol of 25-26%.

Commerzbank Securities has created a new department, dubbed corporate risk and capital structure, to integrate the research, sales and trading of all asset classes, including derivatives, capital markets, equity brokerage and foreign exchange. The firm has named Ricardo Pascoe, head of the U.S. investment banking business in New York, and head of the global group in London. The new structure went into effect last month.

Major weather derivatives houses, including Deutsche Bank, Société Générale, Element Re and Swiss Re, met to discuss a standard weather derivatives confirmation for the first time last week. The meeting, hosted by the International Swaps and Derivatives Association, is the first of several with the aim of a standard confirmation being finalized by year-end. There were approximately 30 institutions represented at the meeting, according to Stacey Carey, policy director at ISDA in New York.

Pacific Investment Management Co. and Morgan Stanley have started looking at creating the first unfunded emerging market managed synthetic collateralized debt obligations. At the moment emerging market CDOs are referenced to bonds and the arranger issues notes, according to structurers. However, with increasing liquidity in the default swap market firms are starting to look at synthetic transactions. Credit structurers predicted default-swaps could form a major part of emerging market CDOs, as they do in investment grade products, but said liquidity and fund manager expertise has to increase first.

Analysts and traders are anticipating a widening in the European interest-rate swaps curve, particularly in the long end, because of the deteriorating credit quality of companies in the financial sector as well as a predicted reversal of the demand from investors to receive 10-year and 30-year fixed-rate positions. "[Given] the severity of the current crisis, swaps spreads are trading at very narrow spreads," said Peter Hartmann, director and euro swaps trader at Dresdner Kleinwort Wasserstein in Frankfurt.

Wellington-based asset manager BNZ Investment Management is considering using credit derivatives for the first time for its NZD120 million (USD58 million) domestic fixed-income portfolio. "We've been looking at this for some time," said Stephen Hong, manager of portfolio research and fixed-income. BNZ is looking at the possibility of investing in credit-linked notes as well as selling credit-default protection on domestic names as ways to increase yield on its portfolio. It will also consider investing in tranches of synthetic collateralized debt obligations, said Hong.

Daehan Investment Trust Securities is preparing to launch a domestic Korean fund that will use over-the-counter derivatives in the coming months. Ko Sukman, general manager for product development and services in Seoul, said the fund, with a target size of USD20 million, will look at trading over-the-counter and exchange-traded equity and bond options, along with interest-rate swaps. Ko also noted that it would consider trading credit derivatives but it will likely take 12 months or so as it would first have to educate investors about the products. The fund will likely use interest-rate swaps to hedge floating-rate bonds in anticipation of possible rate hikes in Korea.

Taipei-based Bank SinoPac is planning to purchase credit derivatives next year for its USD4.5 billion loan portfolio, a move that will make it among the first domestic banks to use the products in Taiwan, according to Henry Chang, head of fixed-income and derivatives. "Credit derivatives could act as a vehicle for hedging our loan exposure," said Chang.

The Deal Roll-off Chart, provided by Capital DATA Loanware, lists the 50 largest leveraged credit facilities in the U.S. market that are due to mature in the coming month. It is designed to provide a look at potentially available money in the market as credits are renewed or retired.

Scottish Widows Investment Partnership will put roughly 10% of its £3-4 billion actively managed fixed-income portfolio into subordinated bank debt once spreads between tier-one and lower tier-two bank debt hit 70 basis points over gilts. He declined to offer a prediction as to when this might occur. Gareth Quantrill, Edinburgh-based investment manager, says the investment manager had reduced its allocation to subordinated bank debt about a month ago because valuations looked too stretched. Spreads have moved quite dramatically--from 50 to 60 basis points over gilts--since.