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Vuk Bulajic, who resigned last week from his position as head of U.S. equity derivatives at BNP Paribas in New York (DW, 4/22), has joined CDC Ixis Capital Markets North America to replace William Toy, head of U.S. equity derivatives sales and trading. Toy, who resigned earlier this week, will stay on as a consultant, according to Bulajic. He added that Toy's resignation was a "completely amicable" decision and that Toy will continue to work closely with the group. Bulajic said he plans to hire approximately 50 equity derivatives traders and marketers over the next year. The firm currently has four traders and one marketer. "We're absolutely in our infancy right now. That's the beautiful part of all this," Bulajic said. Toy did not return calls.

Dollar/yen implied volatility fell across the curve last week as a result of the upcoming Golden Week holiday in Japan and positive macroeconomic data coming out of Tokyo. Traders said one-year implied vol dropped to 9.25% on Wednesday from around 10% the week before, while three-month implied vol fell to 8.5% from 9.25%. One-week vol was 7% at the end of the day Wednesday, from 8% the previous Friday. Fund managers were unwinding long call positions, according to one trader, typically selling dollar calls with strikes ranging from JPY135-140. Spot was trading at JPY129.65 on Wednesday.

Cantor Fitzgerald has hired Ian Silva, a credit derivatives trader for Banc of America Securities in London, and transferred Mike Rohan, a government bond trader from Cantor's London-based fixed income group, to join its growing New York credit derivatives brokerage team, according to Dan LaVecchia, executive managing director and director of U.S. operations.

Daiwa Securities America, the wholly owned subsidiary of Daiwa Securities in New York, is planning a return to the synthetic collateralized debt obligation market after a more than three-year absence. Hiroyuki Nomura, senior v.p. in structured finance, said the firm would look to both structure and invest in synthetic CDOs. Market officials estimated this could happen as early as the fourth quarter but Nomura declined comment on this point.

A proposed taxation change in Germany that would slap a whopping 20% tax on SPVs could lead to a huge shift in favor of synthetic securitizations as their cash equivalents would be uneconomical, according to bankers. Heinz-Udo Schaap, tax lawyer at the Bundesverband deutscher Banken, said the proposed change could snuff out the primary issuance of asset-backed securities.

Swiss Re Financial Products has hiredDanilo Morgante, a director and member of the fixed-income sales team in London at Lehman Brothers. Morgante starts today and will be responsible for developing Swiss Re's relationships with Italian counterparties in the debt capital markets arena, said John Wells, co-coo, through spokeswoman Nancy Jewell. Morgante, who will report to Wells, could not be reached.

The Australian government initially used installment receipts as part of the privatizations of CBA and Telstra. Installment warrants were listed on the Australian Stock Exchange soon after and are now issued by most major Australian and international banks and each year hundreds of new installment warrants are created.

Edgeworth Capital, a recently formed London-based investment management firm owned by Lehman Brothers, plans to use derivatives in its first two hedge funds. The global opportunity hedge fund will primarily invest in equities but will also take currency bets using foreign exchange options, said Wesley Paul, who is heading up the new firm. The fund will also own some fixed income securities to diversify its asset base, but will not be using credit-default swaps as the fund will not take on major credit risk, he explained.

Levi Strauss & Co. is considering entering an interest-rate swap on the back of a pending bond offering as part of a refinancing plan, according to Eileen VanEss, assistant treasurer in San Francisco. "We're taking a look at an interest-rate swap as part of updating our five-year financing plan. No decisions have been made yet. But it is an option that appears at this time to be very feasible," VanEss added. The company is currently debating what combination of bank debt and bonds it will use to refinance a USD1 billion bank facility due August 2003 and a USD350 million, 6.8% senior bond issue due in November 2003.

Credit Lyonnais is continuing its fixed-income expansion in Asia, with hires in India, Taiwan and Hong Kong. Frédéric Lainé, Asian head of fixed-income and derivatives in Hong Kong, said there is still room for growth. He attributed the expansion to growth in the Asian fixed income market.

Merrill Lynch is structuring a synthetic collateralized debt obligation referenced to a EUR1.45 billion (USD1.3 billion) bond investment portfolio of Nationwide Building Society, in what is thought to be the first synthetic CDO entered into by a U.K. thrift. A regulatory change that Nationwide was the driving force behind last summer, allows thrifts to use credit derivatives for risk management for the first time, according to David Williams, equity manager at Nationwide (DW, 6/3).

Structurers of European collateralized debt obligations are including more safeguards to protect against deterioration in the underlying credit pools, according to structured finance and asset-backed bankers. Structurers have taken a variety of steps, including further diversifying underlying credits, increasing the use of credit-default swaps and adding cashflow diversion tests.