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The Royal Bank of Scotland, the fifth largest bank in the world by market capitalization, is looking to set up a credit derivatives operation in Asia in the coming months on the back of building up its fixed income and currency derivatives desk in Tokyo, according to Pierre Ferland, branch manager and treasurer in Tokyo. "RBS has a tremendous aspiration to be a global wholesale leader," said Ferland. He continued that the firm is looking to set up a credit derivatives structuring and trading operation in Asia, which will be headed out of Tokyo. "It's the only structured investment product that's missing," said Ferland, commenting on the bank's interest in credit. RBS will look to hire structurers and traders for the effort, though he declined to comment on the intended size of the desk. "We're currently looking at potential candidates," he said.

Standard & Poor's plans to issue reports on collateralized debt obligation managers detailing the level of risk the manager will take. The ratings agency already produces these reports for cash arbitrage CDOs in the U.S., but it plans to extend the service to Europe and managed synthetic deals, according to Mario Jadotte, director in the structured finance group in London. S&P will not provide a rating but it will offer detailed information about the composition of the portfolio and how the manager will run it. These will be co-authored by its structured finance group and its fund services group.

Standard Chartered Bank has hired Conor MacNamara, v.p. at Gen Re Securities in Tokyo, and Laurent Benissan, director in credit marketing at Merrill Lynch in Paris, to its credit desk in Singapore, according to the new recruits. The duo reports to Debbie Min, head of structured asset solutions in Singapore. Min declined comment.

Four tax structured products staffers are leaving Westdeutsche Landesbank to join RBC Securities in London. Simon Isbifter, executive director; Nick Williams, director; Jane Bennett, director and Oliver Read, manager, will all be joining RBC starting in August, according to Stephan Sayre, who heads the global structured finance group. They will report to Sayre.

Two electronic money market derivatives brokers, iFOX and atenX, are due to merge today. The combined company, called ATFox, will broker standardized interest-rate derivatives, such as European Overnight Index Average (EONIA) swaps, according to Jack Parrish, ceo of the combined company.

Westdeutsche Landesbank has hired Dominic Larche and Scott Spelker, senior vice presidents in the foreign exchange trading group at HSBC in New York, to take similar positions, said a market official. Larche, who left HSBC about three weeks ago, has filled a vacant position as chief dealer for foreign exchange forwards and Spelker, who left HSBC several months ago, is chief dealer for foreign exchange options. Both positions were left vacant in March, when several staff left WestLB's FX group, the official said, declining to detail which employees left.

Bailard, Biehl & Kaiser is looking to add 4.25% TIPS of '10 to its $100 million Bond Opportunity Fund. This move will involve 2-3% of the portfolio, according to portfolio manager Eric Leve. He says the disappearance of the U.S. budget surplus will exert upward pressure on nominal Treasury yields, which makes TIPS attractive relative to on-the-run Treasuries even without inflation. However, he believes the potential for inflation, as well as the likelihood of the Federal Reserve beginning rate hikes in August, will give TIPS still further support. Leve says Bailard, Biehl & Kaiser will sell nominal Treasuries to raise money for the TIPS purchase, which it will make once the market becomes more certain of August rate hikes.

DWS Investments is seeking to increase its exposure to corporate bonds. In particular, the media sector appears very cheap says Xueming Song, Frankfurt-based portfolio manager of the firm's $420 million dollar portfolio, who is looking to add AOLTimeWarner's 10-year benchmark bond. The 6 7/8% of '12 global bond has widened roughly 100 basis points to 260 over Treasuries in the past month. Song says he will buy AOL once it widens to 280-290 over. "If you drop AOL out of AOLTimeWarner, there are still good medium- to long-term fundamentals," he says.

When asked about the recent moves of Martin Pryor and Joe Wilson of J.P. Morgan to Salomon Smith Barney and Walter Levitch of Salomon to Goldman Sachs on trader quipped, "If we are not trading assets, we're trading people."

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.

Bob Alley, portfolio manager with AIM Advisors in Houston, says that he will swap 7% of the fund's portfolio, or $175 million, out of corporates into mortgage-backed securities over the next quarter. He anticipates that MBS will offer more protection in a rising interest rate environment due to their negative convexity. There is no particular trigger for this move, besides the widely anticipated Federal Reserve tightening action later on this year, which will flatten the curve, says Alley. He adds that his strategy also aims at reducing duration and giving up some convexity for more yield and less volatility.