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Conectiv, a U.S. energy provider that serves four Mid-Atlantic states, is planning to enter its debut interest-rate swap to satisfy creditors as part of a USD365 million bank facility it is in the process of arranging, said Phil Reese, treasurer in Wilmington, Del. In the swap, Conectiv will look to convert half of a proposed USD365 million floating-rate bank facility into a fixed-rate obligation. Reese declined to provide further details of the bank facility.

Singapore-based UOB Kay Hian Advisors, with USD80 million under management, is considering using asset swaps for the first time to strip out the equity component on convertibles, according to Mary Koh, fund manager in the Lion City. The relative value fund manager is considering the move because the growing number of convertible bond issues in Asia this year is presenting opportunities. A number of funds in the region, including Wharton Investment Management in Hong Kong, have been looking to step up their convertible arbitrage activity this year (DW, 3/17).

Goldman Sachs has hired Lyndsay Lobue, credit sales official at JPMorgan in New York, as part of its credit derivatives group, covering bank clients. She will report to Eric Oberg, managing director and head of credit derivatives sales and marketing for North America. Lobue previously reported to Maleyne Syracuse, managing director and head of structured credit sales at JPMorgan, said Syracuse, who declined further comment. A Goldman spokesman declined comment.

A series of interest rate cuts over recent months has sparked interest in Indonesia's budding onshore interest-rate derivatives market and some market officials in Jakarta believe this could result in the market doubling by year-end.

New Zealand's Guardian Trust Fund Management, with over NZD1 billion (USD569 million) in its domestic fixed-income portfolio, is considering purchasing and selling credit-default swaps for the first time in the coming months. "If this can enhance our returns, we'll be happy to go down that road," said Fergus McDonald, head of bonds and currency in Auckland. He continued that the fund is studying the instruments as an additional investment tool for its fixed-income portfolio and that if it goes ahead with establishing systems and preparing documentation, it could be trading within six to 12 months.

AXA Investment Managers, which manages roughly £16 billion in fixed-income assets, has been, and will continue to accumulate shorter-dated triple-B rated paper, mostly from the primary market. Denis Gould, head of the sterling investment-grade team, says he is especially interested in seeing new issuance fromNetwork Rail, the not-for-profit company established by the British government to replace Railtrack, which was put into receivership last year. Network Rail is expected to issue debt to pay off existing Railtrack debt and to fund project work. Gould is also anticipating long-dated issuance from LCR, the company that runs the channel link tunnel.

Groupama Asset Management is looking to increase its corporate allocation, and is warily eyeing financial credits. Dan Portanova, portfolio manager of $150 million, believes the economy will recover eventually, but says it is still vulnerable to exogenous shocks. As a result, he wants to see another month of data to be sure that unemployment is truly falling, before becoming more aggressive. Assuming that the futures market was correct last Monday in betting on a year-end Fed funds rate of 2.25-2.50%, Portanova will have upped Groupama's corporate exposure by 10% by that time. Groupama will sell U.S. government securities to raise the necessary funds. Names Groupama will look to add include Wells Fargo, whose 6.125% notes of '12 (Aa2/A+) were trading at 89 basis points over Treasuries last Monday. Portanova says he will probably look to add either the five- or 10-year maturity sectors, and was considering buying the bonds last Monday. Portanova likes Wells Fargo in part because its mortgage business is still strong due to a resilient consumer and housing market.

Loan market trivia: Which loan market trader recently won a Tony Award for Best Musical for his role as one the producers of Thoroughly Modern Millie? Answers can be emailed to msell@iinews.com and winners will receive a hearty congratulation for their market acumen.

George Schupp, portfolio manager withU.S. Bank Asset Management, formerly known asMississippi Valley Advisors, says he will rotate 5% of the firm's $2 billion portfolio, or $100 million, from Treasuries into corporates when single-A rated corporate bonds widen by 50 basis points. Single-A bonds were trading at an average of 150 basis points off the curve last Tuesday. He says he is uncertain as to when the spread widening may happen. He argues that high-quality corporate bond spreads are tight due to a particularly difficult corporate environment given the widespread regulatory and ratings problems within the sector.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

The recently syndicated deals for Metro-Goldwyn-Mayer Studios and TriMas have broken in the last two weeks, and the paper has been scooped up by hungry investors. Both names have been trading in 101 territory, according to dealers. MGM, which broke this week, was reported to have traded more than 10 times by Tuesday afternoon. Market players explained that prices for decent credits have been driven up as paper starved investors look to fill their baskets.