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The successful Provide programme sponsored by Kreditanstalt für Wiederaufbau (KfW) continued into its fifth transaction this week with a Eu1.508bn residential mortgage backed securitisation (RMBS) for Commerzbank AG. Like Provide GEMS of April this year, a Eu1.052bn deal led by Commerzbank Securities for Rheinhyp AG, the transaction transfers the risk of the portion of the mortgages with a loan to appraised value ratio above 60%. This portion is 100% risk weighted and so ineligible for Pfandbrief issues.

Restructuring in the UK water sector gathered momentum this week as Anglian Water Group prepared a £1.7bn bond, while two smaller water-only companies, Portsmouth and Dee Valley Water, launched or prepared to launch bonds of their own through a new RBS vehicle. All three deals highlight the demand for alternative means of financing at both ends of the water company spectrum.

At the risk of stating the obvious, it's safe to say that the market was engrossed with WorldCom's admission to more than $3.6 billion of accounting fraud and the subsequent fall out in the bank and bond markets. The company's $2.64 billion termed-out paper was quoted in the 12-16 range and the bids for the company's $3.75 billion paper set to expire on Sunday were quoted down to 15-18, but neither traded. The paper had been trading at 81. Calls to Brad Burns, company spokesman were not returned by press time.

Bids for WorldCom bank debt and bonds plummeted into the teens this morning following news of the company's fraudulent booking of more than $3.6 billion in expenses. The paper had been at 81. Rumors circulated around the bank debt markets of paper trading in the 12-14 range, as well as one trade of the $2.65 billion termed-out paper at the 22 level. Several major dealers denied the existence of those trades.

UBS Warburg has done an about-face on Herbalife International by canceling a Euro 100 million bond sale after investors pushed for too high of a yield. Instead, the $165 million "B" term loan has been upsized to $180 million and the $150 million U.S. bond portion has been bulked up to $165 million.

The Yorkshire Building Society is seeking an assistant treasurer who will have a prominent role in the company's hedging activities. Chris Parrish, group treasurer in Bradford, said the new hire will be responsible for the transactional hedging of its GBP9 billion (USD13.4 billion) fixed-rate saving and loan portfolio. Parrish explained that the building society uses plain-vanilla interest-rate swaps to hedge the notional value of the entire portfolio.

Bruce Nichols, director-equity derivatives trader at Barclays Capital in London, has assumed responsibility for the firm's Eurostoxx 50 book, according to Jerome Bussière, associate director in charge of single stock trading in Europe. The book was previously managed by Arnaud Fransioli, who recently joined Voltrex Options, a specialist derivative brokerage house in London. Nichols confirmed the move, declining further comment.

Credit-default protection on AT&T Wireless Services blew out by roughly 150 basis points last week on fears the company's credit rating could get downgraded to junk status. Mid-market five-year default swaps referenced to the wireless company were trading at roughly 650 basis points late Wednesday, up from about 500bps at the start of the week. The widening occurred despite a generally positive tone in the default swap market due to strong demand from synthetic collateralized debt obligations. "AT&T Wireless has had a rough week, everyone is just real skittish on the sector and the credit," said one trader. Standard & Poor's added to the worries earlier in the week when it issued a negative forecast for the entire sector and said it would not turn around for possibly the next two years.

CIBC World Markets recently moved Takahiro Yamanaka, head of equity derivatives trading in Tokyo, to the head office in Toronto to become an exotic equity trader. The equities pro said he has been with the firm for six-and-a-half years and moved to the Toronto head office for the extra opportunities it offers. He reports to Trevor Radomsky, Canadian head of equity derivatives trading. Yamanaka declined further comment.

Bank of America is reportedly planning to launch an electricity derivatives trading desk in New York and has hired four former Enron traders to staff the operation. The quartet consists of Rogers Herndon, who heads the team, Gautam Gupta, John Suarez and Paul Broderick, according to market officials. David Mooney, global head of commodities, referred calls to BofA's media relations department. Jeff Hershberger, a spokesman in New York, said BofA is not currently a participant in the power derivatives market and does not comment on future business plans. Herndon referred calls to Mooney.

The Belgian Debt Agency is likely to enter forward-rate agreements to convert EUR10-15 billion (USD9.5-14.3 billion) of its floating-rate debt into fixed-rate debt next year. Anne Leclercq, head of the front office, said the expectation of higher interest rates in Europe is causing the debt agency to look at this option for its EUR30 billion outstanding floating-rate portfolio. She added that its budgetary needs would also play a role in the decision. Leclercq was speaking at Euromoney's Global Borrowers & Investors Conference at the London Hilton on Wednesday.

JPMorgan has hired Hosun Chang, v.p. in equity derivatives at Salomon Smith Barney in Seoul, in a similar role to establish an onshore equity derivatives marketing effort in Korea, according to market officials. Currently, JPMorgan markets equity products for Korea out of its Hong Kong office, where trading for Asia ex-Japan is also located.