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Francois Pham-Quang, head of European equity derivatives sales at Lehman Brothers in London, has left the firm to start a fund that will securitize music industry assets. The fund, called The Music Fund, will securitize the future earnings of several types of music assets, such as catalogues of published songs. The concept is similar to The Pullman Group's securitization of royalty streams, colloquially know as Bowie bonds. However, the financial technology used will look more like mortgage-backed securities, according to Pham-Quang. He predicted the fund would start trading when it has raised USD150 million. It has seed capital of some USD30 million.

European credit derivatives dealers have agreed to back the so-called Aug. 27 restructuring proposal over a rival plan put forward by BNP Paribas in an attempt to present one voice in the restructuring definition debate in discussions with other participants, such as sellers of protection, end users and U.S. dealers. An e-mail sent last week by Robert Heathcote, managing director, and David Geen, senior legal consul at Goldman Sachs in London, said, "We must come to a conclusion which proposal the European dealer group are in support of, and then ensure that we back this proposal collectively and enthusiastically at the forthcoming ISDA market practice committee."

CIF Euromortgage, the personal credit arm of French real-estate giant Crédit Immobilier de France, has entered an interest-rate swap to convert a recent EUR1.75 billion (USD1.71 billion) fixed-rate bond offering into a synthetic floater. Laurent Tournaud, head of the dealing room in Paris, said the mortgage agency pays a three-month Euribor-based rate in exchange for a fixed rate. A second swap is then made every three months between the three-month Euribor and the Euro Overnight Index Average (EONIA).

Goldman Sachs is recommending investors speculate that the equity volatility spread between the European banking and insurance sectors should compress because of the belief that bank exposure to credit risk is not completely priced in for some banking names. Atlaf Kassam, associate in European equity derivatives strategy in London, said the firm is pitching the idea of selling Aegon implied volatility and buying Credit Lyonnais implied volatility to capture the tightening of the spread.

Goldman Sachs plans to start a convertible bond sales and trading desk in Hong Kong, which will be headed by Jeremy Eakin, head of European convertible sales and trading in London. Eakin said he will relocate to Hong Kong in December, but declined further comment.

Goldman Sachs has hired Francesco Adiliberti, director at Lehman Brothers, as v.p. in equity derivatives sales in Zurich. Adiliberti reports to Johannes Sulzberger, managing director and head of the equities business in Zurich, and started on Oct. 1, according to a Goldman spokeswoman. Adiliberti had no comment and Sulzberger referred calls to the spokeswoman. A Lehman spokeswoman confirmed his departure but declined further comment.

Goldman Sachs has hired Adam Jones, asset swap trader at JPMorgan in London, to work as an executive director on its emerging market credit derivatives desk, according to Rebecca Nelson, spokeswoman at Goldman. Jones declined comment.

Galaxy Asset Management (H.K.), a Hong Kong-based hedge fund, is actively considering using equity-linked notes for the first time. "It's another way to use options," said an official at the firm, noting that such notes would give it leveraged exposure. He continued that Galaxy regularly trades listed futures and options and occasionally uses over-the-counter derivatives.

Hong Kong's Dao Heng Bank, which was acquired last year by the Development Bank of Singapore, is looking to market hybrid notes for the first time. "We're going to test the market," said Henry Chan, v.p. in marketing and product development in Hong Kong. He said that given the prevailing low interest rate environment, clients are looking for yield-enhancing products.

Interest rate swap volumes in India have roughly doubled over the last month in anticipation of further rate cuts. "Volume has picked up quite a bit," said Srinivasan Varadarajan, treasurer at JPMorgan in Mumbai. He continued that trading volume has grown to USD75 million per day in recent weeks from about USD30-40 million per day a month ago. He explained that much of the activity stems from interbank players putting on positions anticipating a rate cut when the Reserve Bank of India meets later this month. "People are looking to put on positions and ride it down," added Varadarajan. Interest rate swap levels have come down as well over the past few weeks, for instance five-year swap levels were around 6.55% a month ago and have fallen about 25 basis points since.

Merrill Lynch last week completed the removal of a layer of management closely associated with former global debt capital markets COO T.J. Limm, in a move widely interpreted as the firm's old guard reasserting its grip. In the latest reorganization Kevin Chattwell, managing director and head of the rates business for Europe, Middle East and Africa in London, was let go last week. Chattwell, who had worked with Limm at what is now Dresdner Kleinwort Wasserstein prior to joining Merrill two years ago, could not be reached. Richard Creswell, a Merrill spokesman in London, declined to comment.