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Structured credit professionals are putting esoteric asset-backed securities, such as aircraft leases and manufactured housing, into synthetic collateralized debt obligations to boost yield. Firms are increasingly pushing multi-sector ABS deals, which also include a percentage of investment grade credit-default swaps, explained one investor. He added that he is not interested in these deals because these industries are in a bad way and even where they offer strong yields it is a lot of risk.

Rhicon Currency Management, a hedge fund manager with over USD250 million in assets under management, plans to launch two funds next year. One will be a futures trading fund and the other will be a systematic currency trading fund, according to Peter Jacobson, managing director in London.

Ritchie Capital Management, a Geneva, Ill.-based hedge fund, has launched a power and energy trading desk. Paul Wolfe, senior v.p. of business strategy and development, said the hedge fund has hired four traders from Williams Co.s, Duke Energy and Enron and plans to recruit one or two more over the next six months as it rolls out the project. The distressed state of the wholesale power sector and the withdrawal of many traditional energy trading shops is creating opportunities for the hedge fund, explains Wolfe.

Korea Life Insurance, Korea's oldest life insurer with assets totaling over KRW29.2 trillion (USD24.9 billion), plans to purchase credit-linked notes on domestic names. The insurer is looking at making an initial investment of some USD10-30 million, according to Myung Chool Kim, deputy general manager in the financial planning department in Seoul.

Jeffries & Co plans to establish a derivatives and options trading group in the near future. Scott Jones, the firm's director of equity sales, said it wants to be able to offer derivatives and options to its clients and will likely bring in a management team to do this. He was uncomfortable committing to a number, but said the team could be as many as 10-strong within a year.

JPMorgan has lost David Barrosse, co-head of Asian derivatives in New York, according to officials at the firm. Barrosse joined the firm last year to set up a global hedge fund marketing group for the Asian market, hiring several staff in Hong Kong (DW, 3/3/02). Barrosse could not be reached for comment. Michael Dorfsman, spokesman, confirmed the departure.

Public Service Electric & Gas Co., a publicly traded energy company, is considering entering an interest-rate swap before year-end. Mark Kahrer, assistant treasurer in Newark, N.J., said the corporate is weighing up the possibility of entering a fixed-to-floating rate swap as a means of managing its asset and liability mix. The corporate regularly enters swaps to hedge its interest rate exposure, he added.

Credit

Royal Bank of Scotland has hired Saurabh Sah, volatility trader at EA Capital in London, to trade equity index options. Sah trades both exchange-traded and OTC options for the non-eurozone desk which includes U.S. and U.K. indices, noted Mike Asplin, head of equity index trading. Sah reports to Asplin.

Collateralized debt obligation issuers have started to structure true sale CDOs that feature puttable money market notes. As well as reducing funding costs, issuing short-term notes to fund CDOs has the added advantage of opening up the approximately USD2 trillion U.S. money market as a source of financing. Major derivatives houses, includingJPMorgan , are planning to bring such deals to the market, according to an official at the firm. Darren Esser, associate director at Standard & Poor's in New York, said the ratings agency is getting more and more enquiries from potential issuers, many of which would be debutants.

Lehman Brothers has hired Corrinne Teo, fixed income marketer at Nomura Singapore, in a similar role covering Southeast Asia. Teo said her role includes interest rate and credit derivatives. She reports to Catherine Loh, general manager in Singapore. Loh, who joined last year from Goldman Sachs (DW, 10,6), was traveling and could not be reached.