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Norway Arrangers BayernLB and Den norske Bank have launched the Eu50m three year deal for Finansbanken into general syndication.

Austria Austrian utility OMV is still to decide which banks will be arranging its new Eu500m facility.

ABN AMRO Asset Management is looking into purchasing and selling credit derivatives next year to tailor its exposure to specific credits for its EUR850 million (USD749 million) European corporate bond fund. An official in Amsterdam said the fund, which holds about 150 investment-grade credits, has been in discussions with Merrill Lynch to determine whether it makes sense to use single-name default swaps. ABN uses a Merrill index for the fund, which is why it is talking to the dealer and not its in-house bank. However, it would be open to talking to other potential counterparties as well, according to the official. The asset management company would use default swaps to gain or reduce exposure to specific credits at specific maturities, which is currently difficult in what he called the relatively sparse European cash bond market.

TPG, the privately owned Dutch mail carrier with approximately EUR7.5 billion (USD6.6 billion) in assets, is examining using credit derivatives for the first time to hedge its counterparty credit risk. Lars Wickson, assistant treasurer in Amsterdam, said the company is keeping abreast of events in the credit derivatives market as a possible means to supplement other risk management techniques. The company already uses plain-vanilla derivatives, both listed and over-the-counter to offload interest-rate and foreign exchange risk. He said the company works with roughly 15 relationship banks and picks counterparties on the basis of price and credit rating. He declined to name the firms.

The Japanese government and major Japanese banks, such as the Bank of Tokyo-Mitsubishi and Sumitomo Mitsui Banking Corp., saw their credit ratings downgraded by Fitch Monday, prompting a flurry of trades in the credit-default swap market. "Things are absolutely crazy," said Ralph Orciuoli, managing director of structured credit products at Bank of America in Tokyo, noting that volumes on the sovereign surged to around USD100 million per day early last week from USD30-50 million in a typical week. Spreads on 10-year protection on the sovereign jumped from 27-32 basis points to 33-37bps last Wednesday, he noted.

Fortis Bank Hong Kong is reorganizing its derivatives effort following the resignation of Tony Au, head of capital markets in Hong Kong, two weeks ago. Philippe Dirckx, head of interest-rate derivatives in Hong Kong, has been promoted to head of fixed income and has assumed Au's responsibilities. "We're in the middle of a restructuring phase but next year our focus will be on credit derivatives products," said Dirckx.

Quotes for Enron Corp.'s bank debt fell to 25 from 50 after news broke Wednesday that Dynegy Corp. would not be acquiring the beleaguered company. This came on the heels of the simultaneous downgrades by Standard & Poor's and Moody's Investors Service of Enron's credit to junk status. "It's not a huge surprise," a dealer said of the nixed merger. "The debt rating agencies gave the two time to get a deal done and nothing happened." In other names, a $20 million chunk of Crown Cork & Seal traded yesterday at 79 ½, which was down nearly a point from the level traded at an auction the day before. Industrial Bank of Japan was the rumored seller, and J.P. Morgan was said to have bought the piece. Officials at both shops would not comment.

One-month cable implied volatility rose and risk reversals moved further in favor of sterling puts last week as the pound weakened against the dollar after reports surfaced of a rift between the U.K. prime minister and chancellor. One-month implied volatility ticked higher to 8.6% on Tuesday, up from around 8% last week. And one-month 25-delta risk reversals also moved further in favor of dollar calls/sterling puts, rising to 0.4 vol by Tuesday in favor of sterling puts from 0.1 vol the previous week. Traders reported some investors were buying out-of-the money sterling calls with strikes in the GBP1.45-1.46 area as risk reversals cheapened the trade. Spot sank as low as GBP1.4090 last week, its lowest since the U.K. election in June, as a rift between Prime Minister Tony Blair and Chancellor Gordon Brown over the U.K. entering the euro appeared to widen over the weekend.

China International Marine Containers (Group), one of the world's largest manufacturers of marine containers with over USD795 million in assets, is planning to enter an interest-rate swap on the back of a syndicated loan it is likely to take out within six months. The manufacturer is currently in talks with several firms about a U.S. dollar-denominated loan, likely a LIBOR-based facility for approximately USD20 million, according to Tony Yao, assistant manager of the finance department in Shenzhen. "We're now preparing for a bidder's meeting," said Yao, noting that an interest-rate swap would also be discussed.

Convertible bond and equity issuance by European telecoms companies, France Telecom and Royal Dutch KPN, moved credit-default swap spreads in opposite directions last week. Convertible arbitrage funds snapped up France Telecom's EUR3 billion (USD2.64 billion) convertible offering and also bought credit protection to hedge the credit risk and isolate the equity component. This made spreads widen to 160-180 basis points Wednesday from 125-135bps Tuesday. Andy Preston, fund manager at KBC Alternative Investment Management in London, said it bought both the convert and credit protection because the embedded equity option in the convert is priced in the mid-30s vol whereas it is trading at around 50 vol in the equity derivatives market.

Energy companies unwound weather protection against a cold winter last week after an unexpectedly warm November. Enron and Element Re were seen to be two of the most active players in rehedging December through March exposure.