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Many dealers reported trading as minimal as they just got back to work today. However, an auction for Crown Cork & Seal paper is scheduled for tomorrow with the size estimated at $10 million and the trade expected to go off in the 84-85 range. Dealers note Crown Cork has steadily moved up from the high 70s over the last month and report a strengthening market as helping to push the paper. The seller of the piece is reportedly a Japanese bank, although the name could not be ascertained.

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ABN AMRO has hired Steve Potter, head of foreign exchange options trading at Rand Merchant Bank in Johannesburg, as a fixed-income salesman, with particular emphasis on swaps marketing, in London. Potter joined the firm late last month and reports to Simon Rogers, European head of derivatives marketing in London.

BNP Paribas plans to expand its synthetic collateralized debt obligation business outside of Europe. It aims to structure its first synthetic CDO in the U.S., boost its presence in Japan and possibly structure a CDO in Hong Kong. Antoine Chausson, head of structured credit derivatives in London, said London is the hub of the business, but added it wants to offer synthetic CDOs in other areas.

Bear Stearns plans to hire at least two foreign exchange salesman with a particular emphasis on options for its London team next year, as part of a firm-wide push to increase its presence in Europe. Bernd Broker, head of foreign exchange in London, said, "we want to develop a more corporate slant on the fx side, especially with derivatives," as an overall corporate finance offering. The U.S. firm may also look to add another options trader to bring its team to three.

Dresdner Kleinwort Wasserstein has spun off a collateralized synthetic obligations group from its structured products group. This group will handle credit products structured using derivatives, such as synthetic collateralized debt obligations. The move is part of a restructuring of the global credit derivatives and structuring business under Matteo Mazzocchi, head of the group in London. Greg Lieb, who had previously been co-head of structuring with Forbes Elworthy in London, is heading up the unit, which was formed to meet increasing client-side demand for products such as synthetic CDOs.

Energy supplier Centrica has entered an interest-rate swap to convert half a recent fixed-rate bond offering to a floating-rate liability. Tony Kendall, group treasurer in Windsor, U.K., said the company entered a fixed-to-floating swap on the back of its recent GBP100 million (USD145 million) bond sale. The owner of British Gas converted GBP50 million into a floating-rate liability and will retain the remaining GBP50 million in fixed-rate exposure. "Our policy is to have 50/50 in fixed and floating," he said, adding the company issued the four-year deal in fixed because investors prefer fixed-rate paper.

Houston-based Lyondell Chemical Co., a manufacturer and marketer of basic chemicals and polymers, is considering entering an interest-rate swap to convert a seven-year USD393 million fixed-rate bond it issued in late November into a synthetic floating-rate liability, according to a company official. The chemical company is looking to enter a swap in which it receives a fixed rate equal to the 9.50% coupon on the bond and pays a floating rate.

Derivatives houses sold at least EUR5 billion (USD4.5 billion) worth of one-month euro calls/U.S. dollar puts last week as traders unloaded out-of-the-money options in preparation for what is expected to be a listless last week of the year in the foreign exchange market. Sales of euro calls with strikes at USD0.91-0.92 were most prevalent, according to one trader. "Everyone is selling time decay--people they don't think it is valuable to own the one-month over Christmas, which it isn't, because the fx markets historically don't move much over that time," he said. Spot was at USD0.8990 Wednesday. One-month euro/dollar implied volatility sank as a result of the selling, falling to 8.8% Wednesday from 9.4% at the start of the week. Traders predicted vol will go lower before the new year after which it is expected to recover.