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Dresdner Kleinwort Wasserstein has hired Yannick Naud, head of convertible asset swaps trading at Crédit Agricole Indosuez in London, to kick start its convertible asset swap trading desk. Dresdner has been active in this area for around two years, however, until now it executed trades on an ad hoc basis by the convertible bond team, according to a firm spokeswoman. In current market conditions, where spreads on convertibles are widening, convertible asset swaps present more interesting opportunities for clients, according to the spokeswoman.

Pension Fennia, a Finnish insurer which guarantees defined-benefit schemes, has received approval to use credit derivatives for hedging purposes within the corporate bond portion of its investment portfolio and also has the go-ahead to use interest rate swaps to take on additional risk. The company has not yet executed either of these types of trades, said Veronica Törnwall, senior portfolio manager, fixed income in Helsinki. The company, which does not have a credit rating, has EUR3.7 billion (USD3.6 billion) in assets, of which EUR2.2 billion is in fixed income.

Deutsche Bank and JPMorgan are making a push to sell credit-linked notes to European corporates and Merrill Lynch is preparing its first deals. JPMorgan executed its first deal four months ago and has seen corporate demand for these notes rise to 10% of its total CLN operation, said Carlos Fernandez-Aller, v.p. and head of corporate credit derivatives for southern Europe and emerging markets in London. Tony Main, v.p. in the global credit derivatives group at Merrill in London, said the firm has a handful of deals in the pipeline. Deutsche Bank has already executed several CLNs for corporates since it started offering the products three months ago and has further deals in the pipeline, according to Mark Stainton, director and head of exotic credit trading at Deutsche Bank in London.

HSBC Asset Management has entered equity call options to structure a capital guaranteed fund referenced to the FTSE 100. Bryan Greener, head of product development-global products, said the fund, dubbed the Safe Haven Growth Fund, gives 100% capital protection as well as guaranteeing 100% participation in gains in the index. HSBC anticipates taking out similar options in order to roll out more products in the coming months.

Exotic foreign exchange structures on Asian currencies are growing in interest and volumes could double next year. "We're seeing a lot of cutting edge stuff," said Louis Cucciniello, v.p. of global fx options at JPMorgan in Singapore, adding, "A lot of products found in the G-7 currencies are now being offered in the regional [markets]." He continued that such instruments, as currency hybrid products, which contain exposure to interest rate, foreign exchange and commodities risk, typically structured in note form with embedded options, are becoming fashionable on regional currencies.

HVB Group, the investment banking arm of HypoVereinsbank, plans to hire two more staffers for its convertible sales and trading desk, which includes a convertible bond arbitrage operation. Inderjit Bedi, head of convertible distribution in London, said he is looking for a hedge fund salesman--who will sell credit derivatives--and a convertible bond and arbitrage trader with a hedge-fund client focus. After the last two hires are in place, the group will begin trading securities. In total the group will have five in sales, six in trading and two in research. The sales team targets hedge funds as well as fund managers, pension funds and insurance companies.

JPMorgan has hired Andrea Mohr, responsible for corporate fx sales to Europe at Bank of America, as head of fx sales to German corporates. Jamie Bonic, head of institutional fx sales, said JPMorgan lost three salespeople for German corporates in June and hiring Mohr is part of the effort to replace them. "Germany is an important market for JPMorgan--it needs senior coverage and an experienced hand," Bonic noted. "We took our time and found Andrea." The firm has also reassigned existing members of the team to fill the coverage gap. Mohr reports to Eric Robin, head of corporate fx sales. Robin did not return calls.

Merrill Lynch has started marketing a new breed of first-to-default baskets designed to give investors a yield pick up by selecting "boring credits" with low vol rather than moving down the credit curve. As volatility in the credit markets has increased, investors, including insurers, fund managers and pension funds, have been asking for products with less volatility, said Chris Francis, head of international credit research at Merrill in London. Rather than moving down the credit curve and investing in higher yielding credits, investors can sell protection on names that lie in the middle of the total return distribution. "We are trying to point out which are the boring companies in the middle," Francis said.

MBIA has reached self-imposed risk limits for guaranteeing synthetic collateralized debt obligations and plans to diversify its portfolio via guaranteeing securitizations referenced to alternative asset classes, such as hedge funds and private equity. Chris Weeks, managing director and head of the global CDO and structured secondary markets portfolio in New York, told DW MBIA has reached its desired level of exposure for CDOs in the current environment, largely because the deals hitting the market have the same characteristics as previous CDOs it has guaranteed. By investing in new asset classes it can diversify its exposure. "Technical innovation is the lifeblood of CDOs," said Weeks. However, MBIA will still guarantee synthetic CDOs on a highly selective basis.

ING has named Leo Janssen, Asian head of financial markets in Hong Kong, as head of financial markets in the U.K. and chairman of its emerging markets committee. The position was created by the departure of Mark Fisher, global head of foreign exchange, money markets and derivatives and head of financial markets in the U.K., in July. The London-based position is a good opportunity to move back to Europe after a number of years building ING's Asian business, said Belgian-born Janssen. He starts in his new position this week.

Market participants in Korea are considering establishing a benchmark swap rate index through an initiative led by the Korean Swap Dealers Association. "We're going to discuss establishing our own swap rate fixing," said S.W. Hwang, head of derivatives marketing at Citibank and co-chairman of KOSDA in Seoul, noting that this will be the focus of today's meeting. Hwang believes that establishing a benchmark rate would provide more liquidity by creating a standardized rate. There are currently too many pricing discrepancies in Korean swap rates as quotes are listed on a variety of pages. The nascent trade association may list its own page for floating rates, from three months up to five years. The rate would be set by taking quotes from participating institutions, removing the highest and lowest rates, and averaging the rest, similar to the LIBOR fixing. "This will be helpful for end users," added Hwang.