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Montreal-based fixed-income manager Addenda Capital has hired Graeme Thom from Toronto-basedRoyal Bank of Canada Dominion Securities, the brokerage arm of RBC, to develop and manage what the firm believes is an innovative multi-strategy bond vehicle that will invest between 20-30% in over-the-counter and exchange-traded bond and currency derivatives.

The View From Fifty Thousand Feet

Banco Guipuzcoano has purchased a three-year basket call option quantoed into euros on the Nikkei 225 and the Dow Jones EURO STOXX to structure a deposit account for Spanish retail investors. The options return the increase of each of the indices above their levels when the option was purchased. Alfredo Urrutia, head of derivatives in San Sebastian, said the deposit account puts half the investor's money into a three-year guaranteed deposit which gives 50% participation in each of the indices and offers a 100% capital guarantee. The other half of the investor's capital is put in a deposit account for one year, which pays 6% interest, 140 basis points more than one-year Euribor when the trade was put on earlier this month. After a year the investor gets this half back. The bank loses money on the cash placed into the deposit account but makes it back, along with a profit, from the margin on the guaranteed portion of the deposit account.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

BB&T Asset Management has nearly completed a major shift out of long Treasury bonds, slashing its duration by 10-15% in the first two weeks of this month. The manager believes recent yield rallies don't offer enough reward for staying long-duration. However, the firm won't completely abandon long bonds, says Keith Karlawish, who manages $190 million in taxable fixed income, because inflation remains relatively contained and there are continuing Treasury buybacks.

Merganser Capital Management in Boston, which has historically been overweight the broker-dealer sector, has cut its holdings from 15-20% of the portfolio to 5%, selling $350 million worth of the bonds, which it views as too rich. The Morgan Stanley Dean Witter two-year medium term notes issued two weeks ago came at 80 basis points off the curve, compared with comparable finance sector or bank paper that is generally priced about 100-120 basis points off, notes Bob LeLacheur, who manages over $2.8 billion for the firm. He adds that five years ago MSDW paper would have traded 50-100 basis points cheaper to any bank. As the equity market began penalizing broker dealers with poor P/E ratios, they got rid of risk, and following recent mergers become market favorites.

Pitcairn Trust is in the process of executing a swap out of ABS and agencies and into investment-grade corporates on a credit-by-credit basis, to capture additional spread. Patrick Kennedy, portfolio manager for $200 million in taxable fixed-income, expects another strong year out of ABS and agencies, but believes he can pick up extra spread by swapping into corporates whose spreads he expects to tighten.

Rob Richards, a corporate bond trading veteran, has joined Scotia Capital in New York, where he will be responsible for trading Scotia-led issues in the secondary market. Frank Pinon, head of U.S. funding and debt trading, says Richards, who had also traded secondary issues at Donaldson, Lufkin & Jenrette and, most recently, CIBC World Markets, is part of an effort at Scotia to beef up its trading and origination of corporate bonds. As part of this focus, which is designed to leverage off its parent's existing corporate lending relationships throughout North America, Scotia will also be looking to add corporate bond analysts and sales staff in the near future.

Universal Compression has handed mandates to four banks to lead $852 million in structured facilities to back the company's acquisition of Weatherford Global Gas Compression. First Union, Deutsche Bank, Bank of Nova Scotia and BANK ONE were tapped based on the structures they pitched to the company, bankers said. ABN-Amro, seen as a top candidate for a lead role in the early going, did not make the cut. An ABN official declined to comment on the selection process or whether the bank would participate in the deal at another level.Richard Fitzgerald, senior v.p. and cfo in Houston, did not return repeated calls.

Levels for Wyndham International's term loan "B" moved up last week, as dealers noted a trade at 981Ž 4 and offers at 983Ž 4. Some payers attributed the move to a lingering rumor of a bond deal for the company, but others waved that off, pointing more to the credit's value relative to other paper in the market. "It's not a bad credit," one trader said. "Not a telecom name, better for people who are more risk averse." A market watcher commented on the overall strength of the market affecting the name. "The company is doing well. They have great cash flow, and the high-yield market is up," he said.