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The International Swaps and Derivatives Association last week released to members the second draft of the 2002 ISDA credit derivatives definitions. It incorporates four new provisions, including the completely new concept of qualifying guarantees. Industry lawyers said the second draft broadens the scope of the definitions and clarifies the first draft.

The International Swaps and Derivatives Association last week released to members the second draft of the 2002 ISDA credit derivatives definitions. It incorporates four new provisions, including the completely new concept of qualifying guarantees. Industry lawyers said the second draft broadens the scope of the definitions and clarifies the first draft.

Lehman Brothers has moved Marcel Koebeli, executive director and head of derivatives marketing to Swiss clients, to London from Zurich to become head of equity derivatives sales for Northern Europe, which excludes France, Spain and Italy. Koebeli is not replacing anyone, but simply providing additional focus on marketing equity derivatives to clients in Northern Europe, because of what the firm sees as a growing market, according to a spokeswoman. Riccardo Petrachi, executive director, will assume responsibility for equity derivatives in Switzerland from Koebeli.

Credit Lyonnais recently hired Jeffrey Chu, structurer at BNP Paribas in Hong Kong, in a new role as a director for its Hong Kong desk, handling interest-rate derivatives structuring, according to Frédéric Lainé, Asian head of fixed income and derivatives in Hong Kong. "This will allow us to better serve corporate end investors," said Lainé, declining further comment. Chu, who now reports to Lainé, also declined comment.

Morgan Stanley has hired Tsang Chi Foon, structurer in the global relative value group at Deutsche Bank in Hong Kong, in a similar role in Hong Kong, according to market officials. "He's one of the best structurers out there," said one market official familiar with the move, noting that Tsang had been with Deutsche Bank for over five years and focused on foreign exchange structuring.

Hermann Watzinger, managing director and head of debt markets securitization and portfolio credit derivatives at Merrill Lynch in London, has been let go, according to an insider. This move comes just two weeks after a reorganization orchestrated by Harry Lengsfield, head of debt markets for Europe, Middle East and Africa, in which Glenn Barnes, head of European structured credit, was pushed out (DW, 7/8). Watzinger reported to Dale Lattanzio, managing director and European head of global principal investing and structured finance. Lattanzio declined to comment. Watzinger could not be reached.

"The basic objective is to promote the development of the derivatives market and create standardized local market practices."--K.K. Yoo, deputy general manger of Kookmin Bank in Seoul, explaining the motivation behind setting up the Korean Swap Dealers Association. For complete story, click here.

Hong Kong Exchanges and Clearing recently announced changes to the stock exchanges listing rules. The principal changes include the broadening of the rules to cover structured products, which include derivative warrants and equity linked instruments (ELIs) and the streamlining of the rules applicable to such structured products. The new rules became effective on July 1.

Schroder Salomon Smith Barney has hired Alaister Moull, associate director and credit-default swaps trader at UBS Warburg, as v.p. in a similar role. Moull will start in mid-August and report to Iftikhar Ali, head of credit-default swaps trading at Salomon. Ali said the hire is part of Salomon's efforts to strengthen its single-name trading desk. The firm had been looking for one to two credit traders to meet demand for increasing deal flow (DW, 12/24). Ali said he would hire opportunistically--if he saw a qualified person--but has no immediate plans. Moull declined comment.

Stilwell Financial may convert its next USD250 million bond later this year, however it has decided it will probably not enter a swap to convert its most recent fixed-rate bond. Daniel Connealy, cfo in Kansas City, said it is keen to use interest-rate swaps to convert its debt to floating, but has decided that with over 50% of its exposure in floating rate it will hold off in case the rating agencies think it has too much exposure to rate hikes. The parent of mutual fund company Janus raised USD200 million of seven-year money late last month, at 7.75%.

Chelsea Building Society has entered an interest-rate swap to convert its recent fixed-rate GBP100 million (USD152 million) offering into floating-rate debt. Deborah Wiffin, treasurer, said the society typically uses interest-rate swaps to convert any fixed-rate borrowings into floating-rate because its retail portfolio consists of variable-rate mortgages. In the swap, the company is receiving 6.25%--the coupon on the fixed-rate bond--and paying a spread over LIBOR, which Wiffin would not disclose.

J.P. Morgan Fleming Asset Management is considering adding crossover names, former investment-grade credits that have been downgraded to junk, to its E125 million European high-yield bond fund. Mark Flack, London-based fund manager, says the fund has not been active in crossover names, but he is beginning to do his homework to determine which ones to buy. One reason for the move is that recently downgraded credits such as Alcatel and Tyco now comprise a sizeable portion of the Merrill Lynch European high-yield index, the fund's benchmark. Tyco is about 8% of the Merrill benchmark, and once Alcatel is assimilated it will comprise 15-16%.