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Asbestos names ran up in the secondary loan market this week as progress was made on approving a $108 million national trust fund to deal with asbestos liabilities. One dealer said that more than $100 million in Owens Corning bank debt traded up into the 71-72 context, from the low 60s, where the bank debt was quoted last week, according to LoanX. In addition, USG Corp. was said to have traded as high as 93 1/2, up about seven points. An Owens Corning spokesman said the company is still working toward a consensual plan of reorganization with its creditors and noted that all parties are watching the process intently in Washington. Richard Fleming, USG's cfo, did not return calls by press time

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

Investment managers switching to liability benchmarks will have to turn to interest rate swaps, rather than long-dated bonds, to achieve the desired long tenors, according toDonald Brydon, chairman of AXA Investment Managers. Speaking at Euromoney's 12th Global Borrowers & Investors Forum in London last week, he said these skills are typically associated with the life assurance industry.

Bank One plans to hire a few equity derivatives marketers at the managing director level as part of its plan to beef up its investment banking presence. Thomas Kelly, spokesman in Chicago, confirmed the move, noting that while the firm has made strong inroads in its debt expertise there is still room to grow in equity derivatives. The new recruits will report to David Stowell, head of origination in equity products, who did not return calls.

Bear Stearns has hired Kevin Kelly, former managing director in credit derivatives sales at Morgan Stanley in New York, for a similar role and Robert Canning, managing director and senior credit derivatives marketer responsible for U.S. agencies, has left the firm. Kelly declined comment while Canning could not be reached.

Crédit Agricole Indosuez has started marketing a synthetic collateralized debt obligation referenced to convertible bonds. The CDO, dubbed Cabrio, will be EUR300-400 million (USD350-470 million), according to Loic Fery, managing director and global head of credit derivatives and structures in London. The CDO will lay off risk from CAI's convertible bond stripping desk (DW, 3/30).

Jason Bajaj,Nikko Citigroup managing director and head of Japanese program trading, plans to set up a USD500 million hedge fund. The Tokyo-based fund will pursue a range of investment strategies and use over-the-counter derivatives, including equity options and variance swaps, he said.

Westmoreland Capital Management, a structured credit boutique founded in December 2001, has shut up shop after falling victim to the market slowdown caused by tightening credit-default swap spreads. The firm had been planning to introduce its first product, a USD1 billion managed synthetic collateralized debt obligation, since last year when tightening spreads reduced the arbitrage and made the deal unfeasible. Carter Rise, founder and ceo of Richmond, Va.-based Westmoreland, did not return calls.

John Romanelli, managing director in fixed income at Credit Suisse First Boston, has crossed town to Bear Stearns where he will be a senior managing director charged with establishing a capital advisory group. The group will sit within the firm's structured products division and Romanelli will report to Lesley Goldwasser, senior managing director, according to Michele Agostinho, spokeswoman at Bear Stearns in New York. Romanelli could not be reached while Goldwasser did not return calls.

Trading volumes in options on credit-default swaps have rocketed in recent weeks after the underlying market has become rangebound. The directionless market means investors are shying away from paying the full cost of default swaps to make fundamental bets. One credit derivatives trader estimated that option volumes have doubled.