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Colonial Pipeline, an interstate transporter of energy products with USD1.2 billion in total debt, is planning to enter an interest rate swap to convert part of an outstanding fixed-rate bond into a variable-rate liability. Craig Nunez, treasurer in Alpharetta, Ga., said the company is looking to take the USD50 million piece of fixed-rate it has remaining from a USD150 million note issue due in 2007 and convert the principal into a floater.

The Polish Ministry of Finance has agreed to review provisions for netting derivatives transactions in a draft bankruptcy bill. The Polish Bank Association has held meetings with the government and is optimistic that all financial institutions will be able to net transactions within a year, according to Norbert Jeziolowicz, policy advisor to the president of the Polish Bank Association in Warsaw.

HVB Real Estate Bank, the commercial mortgage lending arm of HypoVereinsbank, with assets of EUR79 billion (USD77.59 billion), has entered two cross-currency interest rate swaps in the past two weeks. The first was to convert a fixed-rate NOK500 million (USD66.69 million) bond offering into a synthetic floating-rate euro-denominated bond. The firm is paying Euribor plus a spread and receiving a fixed rate in the swap, said Christian Barrakling, a trader in the asset and liability management group in Munich. He declined to disclose the exact levels HVB Real Estate is receiving and paying. Den Danske Bank Group is the counterparty on the swap and the underwriter of the bond.

"The Restructuring credit event has become the greatest source of uncertainty and potential for dispute in what is a crucially important risk distribution channel for banks."--Blythe Masters, portfolio manager at JPMorgan in New York, underscoring the magnitude of the restructuring debate in a recent letter to the International Swaps and Derivatives Association. For complete story, click here.

Salomon Smith Barney Australia has expanded its equity derivatives operation in Sydney over the last month with three hires and has started marketing equity derivatives to hedge funds. Luke Randell, managing director of trading and derivatives in Sydney, said, "We still think there's growth in the business." He plans to transfer additional staff for the group in the coming months as part of the buildup, but declined to elaborate on future hires or the size of the operation.

The cost of U.S. dollar/euro options rose last week, as the common currency gained against the greenback amid weaker U.S. equity markets. One-month implied volatility for euro/dollar options rose to 11.2% Thursday in New York, compared to 10.5% Monday, according to traders. Vol and the dollar move inversely in the current cycle. "The level of implied vol is rising and the skew for risk reversals is even more in favor of euro calls. The correlation is picking up between the dollar and U.S. equity markets," said one options trader. Spot was approaching parity at USD0.9950 Thursday morning, up from USD0.98 Monday. Common trades were for investors to buy euro calls above parity across all tenors.

Société Générale has hired K.P. Lee, director of fixed income sales at Barclays Capital in Seoul, as an equity derivatives marketer in Hong Kong, according to officials at the firm. He now reports to Raphael Blot, managing director of equity derivatives in Hong Kong, and covers the Korean market. Blot declined comment and Lee was traveling and could not be reached.

Westdeutsche Landesbank has hired Naresh Malhotra, an associate director in credit derivatives structuring at Barclays Capital in New York, as a director in a new role in the German bank's North American credit derivatives trading team. Malhotra, who joins as a director, started at the end of August, according to a firm official. He will develop structured credit projects, including synthetic collateralized debt obligations and basket trades, as well as quantitative analysis on single name default swaps. Malhotra declined to comment.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

Hermes Pension Management will shorten the duration of its £7 billion fixed-income portfolio once the U.K. economy begins to show signs of recovery, says Mike Carter, head of fixed income. Recently, the firm took profits in the five- to 10-year area of the gilt curve and reinvested in the 15-year plus end because long gilt yields have dropped in response to a less robust economic recovery. The portfolio's current duration is roughly nine years.

BNY Asset Management is looking to shift assets into lower-rated corporate issues in a bid to pick up yield. Margo Cook, portfolio manager overseeing $4.5 billion in taxable fixed-income, says given the already wide spreads at which triple-B and single-A corporates are trading, they would have to widen significantly from last week's levels to underperform Treasuries over the next six to 12 months. Cook says economists are seeing good signs of a recovery, especially regarding capital expenditures by businesses. Once it sees a bit more stability in the stock market, BNY will shift up to 5% of its assets (or $225 million) out of 10-year brokerage credits, which have performed well relative to other corporate issues, and into 30-year industrial names, which have lagged the corporate market. Cook cites Lehman Brothers' data showing that longer-dated industrial issues returned just 3.79% year-to-date through August--well behind the financial sector, which has generated 9.73% returns.

Credit Suisse First Boston has hired Krishna Memani as its corporate bond strategist, according to an analyst at the firm. Memani joins from Putnam Investments, where he was a managing director and senior portfolio manager since 1998 in the core fixed-income, core fixed-income high-yield and utilities teams.