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SBI China Provident Capital Management, a newly established pan-Asian hedge fund with some USD10 million under management in Hong Kong, is looking to purchase and sell credit derivatives for its multi-strategy portfolio. "It's part of our mandate," said Adrian Churn, cio in Hong Kong, adding, credit derivatives are part of the fund's strategy.

Insurance transformer transactions are structured to transform a potential liability under a credit-default swap into an insurable loss falling within the scope of an insurer's permitted activities. As such, they are amongst a number of products used to transfer risk from the banking sector to the insurance markets (and to a lesser extent vice versa), which have been the subject of a discussion paper, Cross sector risk transfers, published this month by the U.K. Financial Services Authority. This article briefly considers some of the legal issues associated with this type of transaction.

Bear Stearns has hired Patrick Hagan, head of quantitative derivatives research at Nomura Securities in New York, as head of fixed-income research, according to a firm official. Hagan will oversee the pricing systems for fixed-income derivatives in New York. He is joining a team of around four interest-rate derivatives researchers.

Credit-default swap spreads on Deutsche Telekom tightened last week for five-year protection because of rumors that pricing on the telecom operator's approximate USD5 billion deal was going well. Swaps spreads tightened to 228 basis points/233bps from 230bps/240bps on Tuesday, in from 245bps/250bps the previous week, traders said. Swap spreads were in line with price talk on the bonds--rumored to be at 230bps over LIBOR.

RBC Capital Markets has reportedly taken a hit on a credit-default swap position on WorldCom and has let go Simon Howard-Glossop, head of credit trading in New York. Paul Wilson, a spokesman in Toronto, confirmed that Howard-Glossop has left the firm. He added that RBC only comments on material losses, declining further comment. A trader on the credit desk in New York and Walter Gontarek, head of credit derivatives in London, declined comment.

The Royal Bank of Scotland, the fifth largest bank in the world by market capitalization, is looking to set up a credit derivatives operation in Asia in the coming months on the back of building up its fixed income and currency derivatives desk in Tokyo, according to Pierre Ferland, branch manager and treasurer in Tokyo. "RBS has a tremendous aspiration to be a global wholesale leader," said Ferland. He continued that the firm is looking to set up a credit derivatives structuring and trading operation in Asia, which will be headed out of Tokyo. "It's the only structured investment product that's missing," said Ferland, commenting on the bank's interest in credit. RBS will look to hire structurers and traders for the effort, though he declined to comment on the intended size of the desk. "We're currently looking at potential candidates," he said.

Standard & Poor's plans to issue reports on collateralized debt obligation managers detailing the level of risk the manager will take. The ratings agency already produces these reports for cash arbitrage CDOs in the U.S., but it plans to extend the service to Europe and managed synthetic deals, according to Mario Jadotte, director in the structured finance group in London. S&P will not provide a rating but it will offer detailed information about the composition of the portfolio and how the manager will run it. These will be co-authored by its structured finance group and its fund services group.

Standard Chartered Bank has hired Conor MacNamara, v.p. at Gen Re Securities in Tokyo, and Laurent Benissan, director in credit marketing at Merrill Lynch in Paris, to its credit desk in Singapore, according to the new recruits. The duo reports to Debbie Min, head of structured asset solutions in Singapore. Min declined comment.

Four tax structured products staffers are leaving Westdeutsche Landesbank to join RBC Securities in London. Simon Isbifter, executive director; Nick Williams, director; Jane Bennett, director and Oliver Read, manager, will all be joining RBC starting in August, according to Stephan Sayre, who heads the global structured finance group. They will report to Sayre.

Two electronic money market derivatives brokers, iFOX and atenX, are due to merge today. The combined company, called ATFox, will broker standardized interest-rate derivatives, such as European Overnight Index Average (EONIA) swaps, according to Jack Parrish, ceo of the combined company.

Westdeutsche Landesbank has hired Dominic Larche and Scott Spelker, senior vice presidents in the foreign exchange trading group at HSBC in New York, to take similar positions, said a market official. Larche, who left HSBC about three weeks ago, has filled a vacant position as chief dealer for foreign exchange forwards and Spelker, who left HSBC several months ago, is chief dealer for foreign exchange options. Both positions were left vacant in March, when several staff left WestLB's FX group, the official said, declining to detail which employees left.

Bailard, Biehl & Kaiser is looking to add 4.25% TIPS of '10 to its $100 million Bond Opportunity Fund. This move will involve 2-3% of the portfolio, according to portfolio manager Eric Leve. He says the disappearance of the U.S. budget surplus will exert upward pressure on nominal Treasury yields, which makes TIPS attractive relative to on-the-run Treasuries even without inflation. However, he believes the potential for inflation, as well as the likelihood of the Federal Reserve beginning rate hikes in August, will give TIPS still further support. Leve says Bailard, Biehl & Kaiser will sell nominal Treasuries to raise money for the TIPS purchase, which it will make once the market becomes more certain of August rate hikes.