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Bankrupt Williams Communications Group's bank debt jumped from the 72-74 range into the mid- to high 80s this week after Level 3 Communications was reported to be making a $1.1 billion bid for the company. This offer would take the Williams Communications bank debt out at par. Dealers said that investors are still unsure if the deal would be completed. No trades could be confirmed. A spokeswoman for Williams Communications said that the company had received a number of bids, one of which was from Level 3. While she could not elaborate, she noted that the company was looking to release a plan of reorganization soon.

Cable companies felt pressure from secondary bank loan market this week as both Adelphia Communications and Charter Communications saw their bank debt levels shutter and loose three to five points each. Adelphia bank debt fell as five of the company's former executives were arrested by U.S. postal inspectors for conspiracy to commit securities fraud. Dealers quoted Adelphia's Century Communications credit in the 68-71 range. Charter Communications also was said to have traded down from the low 90s into the 86-88 context.

David Petrucco has joined The Royal Bank of Scotland to head up its new U.S. leveraged loan syndication effort, a joint venture between the bank's leveraged finance and loan syndication groups. The effort being developed in the U.S. leverages off the success of RBS' European operations, which Petrucco said currently tops the leveraged lending league tables. "I am very excited about the opportunities that the future holds for RBS, particularly at a time in the U.S. markets when bank capital has become a rare commodity, especially for middle market companies," he added.

Traders said that loan trading was sparse this week as investors nervously watched the volatility in the equity market. Names in the news, however, did see some significant changes in their levels. Williams Communications Group, for example, rocketed from the 72-74 well into the 80s after Level 3 Communications was reported to be making a $1.1 billion bid for the company. This offer would take the Williams Communications bank debt out at par. Level 3 bank debt also received a boost this week with levels rising from the 68-70 context to the mid 70s. No trades of either name could be determined.

Some of the biggest derivatives houses have recently been piling into interest-rate swaps in which they receive the 30-year fixed rate to position their books for an expected surge in money managers hedging their long-dated liabilities. Swaps traders estimated USD4-6 billion (notional) of additional business has gone through the London market in the last month. Morgan Stanley, UBS Warburg and Merrill Lynch were reportedly the most active. Officials at the firms declined comment.

Barclays Capital Singapore is setting up a credit derivatives operation in the Lion City and will start trading from the new desk next month. The firm has traded Asian credit derivatives out of its Tokyo office but is bringing aboard Bill Xie, credit derivatives trader at BNP Paribas in Hong Kong, to spearhead the effort. Xie will hire more traders when he starts, according to an official. Xie could not be reached for comment.

TransAlta, a Canadian energy company with more than USD7 billion in assets, is looking closely at buying credit-default protection on other energy companies. The company, Canada's largest non-regulated electricity generator, previously entered one default swap, about a year ago. It is now considering becoming a more active end user because the number of potential trading counterparties is dwindling, according to an official at the company in Calgary. "Credit and finding available energy counterparties to deal with is an issue right now," he said. "There are fewer and fewer counterparties to deal with. We haven't been in the market recently, but we may be in the future," he added.

Clinton Group, a New York based hedge fund with USD8.4 billion in assets under management, has set up a London office and is applying to the Financial Services Authority for permission to start trading. Market officials said the London office is in the preliminary stages, but is expected to be up and running in three to six months. Officials at Clinton declined comment.

Credit professionals are considering making credit-default swap trades take immediate effect on the day of sale, rather than after the current three day hiatus, and standardizing end dates. Talks have taken place over the past two weeks, but no formal initiatives have been proposed to the International Swaps and Derivatives Association, according to traders in London.

Derivative professionals in Korea have set up the Korean Swap Dealers Association to address domestic issues related to the growing derivatives market. K.K. Yoo, deputy general manager of Kookmin Bank in Seoul, said "The basic objective is to promote the development of the derivatives market and create standardized local market practices." Yoo is also serving as co-chairman alongside S.W. Hwang, head of derivatives marketing at Citibank in Seoul. Hwang was on vacation and could not be reached.

Credit Suisse First Boston has amalgamated its equity derivatives and fixed-income groups in Japan and installed Paul Kuo and Luc Pajot as co-heads. "This is part of a global integration," said Isamu Kajino, spokesman at the firm, noting that while the initiative began out of New York last year, it is now taking effect in Japan. Kajino declined to comment on the operation outside of Japan or the timeframe for the implementation. Previously, Kuo ran the fixed-income operation while Pajot looked after equity. With the new structure, Kuo is responsible for research, sales, and capital markets while Pajot will focus on trading. The duo will jointly oversee structuring activities. Kuo did not return calls and Pajot was on vacation.

Deutsche Bank is prepping its first products referenced to the iBoxx index, with two to three in the pipeline. iBoxx is a European fixed-income index jointly compiled by seven market makers to provide more transparent pricing of investment-grade corporate bonds. Jae Oh, managing director within integrated credit trading, said the intention of the new products is to give investors exposure to the widest representation of the corporate bond market. Oh and Michele Foresti, director within over-the-counter derivatives, are focusing their time on developing new products using OTC derivatives based on iBoxx.