Search results for

Five-year credit protection on Eastman Kodak moved in last week following the firm's issuance of USD1 billion in convertible notes and 10-year bonds. Credit protection on the corporate tightened to 210 basis points last Wednesday from 210bps seven days previously, said a New York-based trader. Much of the bond issue was bought by credit derivatives traders because the bonds were trading cheap relative to default swaps, he noted.

"If the information is price sensitive and its about an E.U. listed security then you cannot trade on it."-- Simon Firth, partner at Linklaters in London, commenting on whether CDO trustee reports could be classified as insider information. For complete story, click here.

Tim Fallowfield, director in foreign exchange, money markets and derivatives trading in Singapore, has quit ING Financial Markets. He had been at the firm for over five years and rivals said he was a respected market veteran. Fallowfield could not be reached.

Lawyers are calling for a change in tax law in order to make a success of the U.K. regulator's proposed opening up of hedge funds to high-net-worth individuals. Moving hedge funds onshore should increase the number of funds and subsequently provide a boost to the over-the-counter derivatives markets, noted Matthew Judd, partner at Clifford Chance in London.

Merrill Lynch has lost Matt Robinson and Ramsey Jallad, marketers in its equity derivatives structured solutions group. The latest departures means seven staffers--out of a 40-strong team--have left since April, according toJoachim Willnow, head of the structured solutions group in London. He added, that Merrill has replaced six of these. Robinson is joining Morgan Stanley in a similar role and Jallad is rumored to be moving to Citigroup Private Bank.

JPMorgan and Morgan Stanley are launching an index of the 25 most liquid credit-default swaps in Asia. The firms launched a similar index in Australia last week and have been rolling out other regional so-called TRAC-X indices since April. "This will allow end-users and the dealer community to easily trade and hedge Asia as a macro-sector," said Robert Breden, executive director and Japan and non-Japan Asia head of investment grade trading and structuring at Morgan Stanley in Tokyo.

Over the last few years, credit-default swaps have helped transform credit investment from a long-only game to a global market in which wholesale credit risk can be transferred, managed and assumed pro-actively. For all its merits, the default swap is not hugely adaptable for tailoring returns around specific views or return requirements.

Saga, which specializes in products for the elderly, is pitching a structured note with an embedded first-of-a-kind house price option to grandparents as the ideal gift for new born grandchildren. The option, structured by Abbey National Financial Products, is the first time house price options have been sold with a 15-year maturity, according to Mario Pytka, head of equity derivatives at ANFP in London. Previous options have had maturities of five years or shorter. A house price option gives investors synthetic exposure to a house price index.

Weatherford International, a Houston-based equipment supplier to the oil and gas industry, is considering entering an interest-rate swap to convert a recent USD250 million fixed-rate note into a synthetic floater. Joseph Gocke, treasurer, said the corporate is considering entering the transaction as a means of saving money on its interest-rate payments. As long as the yield curve remains steep the swap will be under consideration, said Gocke. Weatherford is likely to decide whether to pull the trigger by year-end, he said.

State Street has added two foreign exchange option professionals to head its Asian and European operations as the Beantown giant looks to expand. Mark Snyder, executive v.p. and global head of foreign exchange and money markets in Boston, said the increased use of options by both real money and leveraged accounts makes it an opportune time to hire. Having regional heads will allow the firm to price more customer requests and cross-asset class strategies.

Portman Building Society, a U.K. mortgage lender, has entered an interest rate swap to convert part of a GBP125 million (USD208 million) issue of permanent interest-bearing shares into a floating-rate liability. David Steunell, group treasurer in Bournemouth, said it entered the swap because its liabilities are mostly floating rate. Steunell declined to reveal how much of the issue had been converted.