Search results for

Three months after launching its high-yield credit-default swap index, JPMorgan has added BB and B-rated tranches. The BB tranche offers a fixed 8.625% coupon on a basket of 55 names, while the B-rated tranche offers a fixed 9.875% coupon on 44 names, according to an official at the firm. He added that the move to include the tranches on the index was made to meet investor demand for more targeted risk exposure to the market. He declined to comment further.

Allied Waste's term loans "B" and "C" traded up to 99 this week from 98 1/8 last Thursday as traders reported investors were showing more interest in the credit trading roughly $10 -20 million in the name. Dealers said institutional players were replacing lower performing names in portfolios with Allied Waste, a strong par name.

Three members of Bank of America Securities' equity derivatives trading team in New York, along with the business manager of the trading group and two risk management system professionals, departed the firm Tuesday morning to launch a hedge fund.

Hugh Evans, managing director and co-global head of credit derivatives trading at UBS Warburg in London, left the firm last week. He reported to Robert Wolf, co-global head of fixed income in Stamford, Conn. Wolf said Sal Nero, Evan's counterpart in the U.S., has become global head and the firm will hire a European head of credit derivatives in London. He added that the firm plans to hire a further five-10 sales, structuring and trading pros in its London office this year and is committed to the business.

Bankers and analysts disagreed unanimously with comments made by former Enron ceo Jeffrey Skilling, apportioning blame to the banks on the collapse of the energy company, suggesting material adverse change clauses in loans should be prohibited for federally insured banks. Skilling, in front of a senate panel yesterday, said the company would have survived had many banks not invoked the MAC clauses in loan agreements.

CIBC World Markets and BNP Paribas have joined Deutsche Bank at the top tier of the $500 million credit for Magnum Hunter Resources. The new credit line partially funds the merger with Prize Energy and also refinances the existing credit lines of both companies (LMW, 2/25). Chris Tong, Magnum's senior v.p. and cfo, explained the banks will be agents, though Deutsche Bank has fully underwritten the loan. Magnum is an independent exploration and development company, involved in the crude oil and natural gas markets.

Steel Dynamics picked J.P. Morgan and Morgan Stanley to lead a $550 million refinancing that includes $350 million of bank debt, after previous lead Mellon Financial sold a portion of its loan portfolio, including the old Steel Dynamics deal. Tracy Shellabarger, v.p. and cfo of Fort Wayne, Ind.-based Steel Dynamics, said, "Mellon sold loan portfolios to GE Capital a couple of months ago." He declined comment on whether GE bid to lead the credit after he started shopping elsewhere or why J.P. Morgan and Morgan Stanley were selected as replacements. The $350 million bank debt is a mixture of revolver and term loans, while there is also a proposed issuance of a $200 million in notes due 2009.

Bear Stearns International has hired Reza Rezaeian, convertible arbitrage and default swap trader at Enron Credit in London, as a convertible asset swaps trader. Rezaeian said credit-default swap traders previously handled convertible asset swaps and he is the first and only planned full-time hire.

BNP Paribas is planning to issue synthetic collateralized debt obligations for the first time in non-Japan Asia in the coming months on the back of growing client demand. "It's a natural evolution," said Guillaume Dieu, director and head of Asia Pacific synthetic securitization in Hong Kong. He continued that the firm will look to issue its first synthetic CDO, likely USD1 billion in size, in the next three to six months and possibly two or three additional transactions of the same size later this year.

Traditional collateralized debt obligation (CDO) investment structures may not be flexible enough to meet the objectives of all investors. CDO combination securities have arisen to address this need. Combination securities can be tailored for each investor based on the desired credit rating, minimum coupon, yield target, and capital guidelines.

Bank of America is looking to ramp up its interest-rate derivatives marketing capabilities in Hong Kong, according to Sanjay Mansabdar, principal of interest-rate trading in Hong Kong. He continued that BofA is looking to add two or three additional marketers in the coming months to the team as the business continues to grow, but was travelling and could not be reached for further comment.

Sun Life Financial Services, a life insurance company with more than USD300 billion in assets, aims to use credit derivatives for the first time by the third quarter to buy protection on its corporate bond investments. A company official said the insurer is in discussions with investment banks, including JPMorgan and Credit Suisse First Boston, about ironing out the regulatory issues involved with income tax and accounting before entering its first deal. Officials at JPMorgan and CSFB declined to comment.