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BNZ Investment Management, the fund management arm of the Bank of New Zealand, with NZD120 million (USD52 million) under management, is considering its first use of credit derivatives. Stephen Hong, manager of portfolio research and fixed income in Wellington, said he is considering the product for New Zealand names as a way to diversify the fund manager's domestic portfolio and enhance return.

Textron Finance, a company with operations in various sectors, including the aircraft and automotive industry, recently entered into a 14-month interest-rate swap to convert USD220 million of fixed-rate debt into a synthetic floating-rate liability. Brian Lynn, v.p. and treasurer in Providence, R.I, said Textron sought to receive a fixed interest rate and pay a floating rating because it believes over the next 12 months LIBOR is more likely to remain flat or drop lower than to rise. He added, "we see more opportunity than risk considering the relatively short-term nature of the swap." It entered the swap now because it believes this is the low end of this year's rate cycle. The swap mirrored the 14-month maturity of the medium-term notes. In the swap Textron receives approximately 4%. He declined to detail the rate it pays.

Joe Slankas, assistant v.p. of credit derivatives trading at Merrill Lynch in Tokyo, left the firm last month. He reported to Shinichi Minohara, managing director of credit derivatives in Tokyo. Slankas has moved to New York, according to traders familiar with the situation. It could not be determined if he had taken another job. Minohara said he will look to hire internally to replace Slankas, declining further comment. Slankas could not be reached for comment.

Schroder Salomon Smith Barney has hired Chris Carman, synthetic collateralized debt obligation structurer at J.P. Morgan in London, to head its synthetic CDO effort. Carman will report to Sumit Roy, head of credit derivatives in New York, when he starts next month. At the moment Jerry Wong--who reports directly to Roy--is the sole employee, but Carman's appointment will add a layer of management allowing for further expansion of the desk, according to an official close to the move. Michele Cook, spokeswoman at J.P. Morgan, did not return calls. DW was not able to contact Roy because of the terrorist attack in New York.

Société Générale has put all new equity derivatives products on hold while it re-evaluates the situation in the aftermath of last week's terrorist attacks, according to Dan Fields, managing director of equity derivatives in Sydney.

Salomon Smith Barney has moved its entire derivatives group to the firm's disaster recovery facility in Rutherford, N.J. The group was forced to move from its headquarters at 390 Greenwich Street in TriBeCa, Manhattan, following the collapse of the Twin Towers. The firm's headquarters is about eight blocks from the World Trade Center. The building is structurally sound, but New York authorities have closed off access to Manhattan below 14th Street, according to an official. "We are fully operational here in Rutherford. We created this disaster facility some time ago," the official added. He is uncertain when the group will be able to return to

Weather consultant Weather Risk Advisory has closed because of a lack of cash. "It was a cash shortage," said Peter Brewer, founder and ceo in Cambridge, U.K. He explained that the consultancy had a long-term business plan to raise GBP3 million when it started in September 1999 and had only been able to raise GBP1 million because of the harsh economic climate for venture capital funding in a nascent market. A broker said the consultant was ahead of its time in attempting to run a business dedicated to the weather market.

Stan DeGroot, senior fx options trader at ABN AMRO in Amsterdam, has moved to Sydney to become Asian head of foreign exchange options. DeGroot said he made the move three weeks ago and is responsible for the Asian region, declining further comment. He reports to Colin McKeith, head of global financial markets in Sydney. McKeith referred calls to Steven Blaney, who confirmed the moves. DeGroot replaces Stuart Piller, who left the firm a few months ago. Piller could not be reached for comment.

Bank of America is pitching volatility swaps to its clients because it expects Japanese equity market volatility to fall as the Nikkei plummets. The Nikkei fell below the Dow Jones Industrial Average last week, driving up implied volatility to its highest levels since the August 1998 Long-Term Capital Management crisis, according to Nick Waltner, managing director and head of equity financial products in Tokyo. As a result of the high vol, hedge funds and relative value players are looking at variance swaps to speculate on volatility falling.

U.S. airlines, such as American Airlines and United Airlines, are expected to be the most active names in the credit-default swap market when trading returns to normal levels. Credit-default swap traders said spreads for five-year protection on American Airlines jumped to 410 basis points from about 210 basis points last Monday. The airline industry faces USD370 million a day in lost revenues through grounding their services. The loss will also have a negative impact on the companies' credit worthiness, which will cause spreads to widen further.

Barclays Capital's derivatives division has moved from its New York headquarters at 222 Broadway to a disaster recovery building in Carlstadt, N.J. The division includes credit, interest rate and equity derivatives trading, research, structuring and sales.

ABN AMRO is looking to double its credit derivatives desk in Singapore to six to meet growing client interest in Asia for credit products. Aashish Ponda, head of credit derivatives for Asia-excluding Japan, in Singapore, said he plans to hire an additional trader and at least two structurers in the coming months. Ponda continued that it is seeing growing interest in clients considering structured credit products and needs to make the hires to take advantage.