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UBS Global Asset Management (Australia), one of the largest asset managers in Australia with over AUD15.1 billion (USD8.13 billion) under management, is studying the possibility of using credit derivatives for the first time, according to Stuart Piper, head of fixed income in Sydney. It is considering selling protection on Australian and foreign corporates to gain exposure to the credits. He singled out Ford Motor Credit as an example of a foreign company with outstanding bond issues in Australian dollars on which it would consider selling protection.

Indosuez W.I. Carr Securities, a subsidiary of France's Crédit Agricole Indosuez, is bringing aboard James Young, associate director in the equity risk management group at UBS Warburg in Hong Kong, in a new role focusing on Korean equity derivatives marketing, according to an official at the firm. Young, who starts in the coming days, will concentrate on the burgeoning Korean market rather than the rest of the Asian region as he had at UBS, according to a market official. He will remain in Hong Kong.

The London Stock Exchange has set a provisional date of Sept. 23 to kick off a U.K. securitized derivatives market but several of the biggest warrant houses will not be taking part, according to officials at the firms. The stock exchange had restricted access to automated trading to a group of five: Goldman Sachs, SG Securities, JPMorgan, Citibank and Macquarie Bank, because of limited capacity on its trading system. But, after Citibank and Macquarie pulled out UniCredito stepped up to the plate. Officials at the LSE did not return calls.

UBS Warburg is preparing to lead a debt financing package backing the $300 million acquisition of Nellson Neutraceutical by a partnership between Fremont Partners and existing management. The San Francisco-based sponsor is putting approximately $180 million in equity into the deal, and the leverage will consist entirely of bank financing in the form of an institutional loan, according to one banker. Details on terms, pricing and date of launch could not be ascertained. An official at Fremont declined to comment, and UBS bankers did not return calls by press time.

Credit Suisse Asset Management has launched a new short duration bond fund that seeks to provide an alternative to investors seeking higher potential returns than money market funds at a time when traditional money market fund yields are at historic lows, according to BW sister publication Money Management Letter. The fund invests in corporate bonds, mortgage-backed securities and asset-backed securities, places an emphasis on investment-grade securities, and has a duration of one to three years. The strategy is being marketed mainly to retail investors, but Linda Moore, director of product management, said institutional investors, such as pension plans, which are interested in the short duration fund, can invest in a separate account that offers a similar strategy. According to portfolio manager Suzanne Moran, the firm believes interest rates will remain in the historic low range over the short term based on the firm's fixed-income research and the performance of credit instruments.

IASIS Healthcare's $463 million refinancing, led by BNP Paribas and Bank of America, and Goldman Sachs' $350 million "B" term loan for Verizon Wireless of the East were both pulled from the market last week as investors demanded terms unacceptable to the issuer in an environment starkly different to just last month. IASIS, a healthcare company with improving performance, was looking to opportunistically cut pricing and push out maturities, explained John Doyle, treasurer. "Six weeks ago it would have been a slam dunk," he said. The banks were able to build the book, but only after flexing pricing from LIBOR plus 31/ 2% to LIBOR plus 4% on the $339 million "B" term loan, he noted. This flex up in pricing was so steep that the deal no longer made sense for the company.

Chris Mahony, portfolio manager at J & W Seligman, is planning to shift 20% of the firm's portfolio, or $400 million, from higher rated to lower rated investment-grade corporates. He says a stabilization of the stock market, as well as signs of the economy picking up in speed, will trigger the move. In particular, he will look at improvements in factory orders, industrial production and capacity utilization numbers. The rotation will consist of selling triple-A and double-A rated corporates. With the proceeds, he will buy single-A and triple-B names, he says. The anticipation is that, with the economic rebound, lower rated high-grade corporates will rally while the top of the spectrum will have offered its best returns, he says.

Kmart's three-year bank debt dropped more than 20 points last week after the company filed a motion to amend its debtor-in-possession facility. The debt had been in the 60s, but traded at 40 after the company asked to increase the size of its DIP facility by up to $500 million. Kmart said it would not draw on the extended line, rather it just wants the extra liquidity. According to a statement released by the company, there is still $1.5 billion undrawn on the $2 billion DIP facility. The bank debt currently is being quoted in the 36 range.

Land O' Lakes hosted an investor conference call last Wednesday to clarify some of the numbers discussed during its second quarter earnings call. Before the conference began, listeners were treated to the customary elevator music while they waited. But when the conference call started late, call participants believed that the music was playing because someone had put the call on hold. "Hello," they said. "Is someone on hold?"

Turner Investment Partners is looking to add some 10% to its corporate allocation in its intermediate and core products to take advantage of attractive yields in the asset class. Roger Early, who oversees $750 million in taxable fixed-income assets, says it will take at least until the end of the quarter before the allocation shift is complete. He declined to specify the exact dollar amount of the trade, but says it will be less than $75 million, as many of the short-duration products carry little or no corporate exposure. The firm will finance the trade by selling Treasuries and agency debentures, which Early says have benefited from the flight to quality and are overvalued relative to other asset classes.

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.