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Macquarie Bank is considering structuring a synthetic collateralized debt obligation in Australia by year-end, which would be a first for the Sydney-based bank. "We're looking at this," said Gary Vassallo, head of derivatives. He continued that the bank currently has the in-house capabilities, given its active credit structuring desk, which has been handling products such as credit-linked notes and asset-backed securities.

Interest-rate swap traders in Korea are sitting on millions of dollars of mark-to-market losses on proprietary positions that have plummeted in value over the past month. "This shocked the market," said Scott Sohn, manager of interest-rate trading at the Korea Development Bank in Seoul. Traders entered interest-rate swaps--paying fixed and receiving floating--and bought fixed-coupon Korean Treasury bonds to hedge the position. However, the floating rate has crashed.

Emanuele Di Stefano has joined TD Securities as a derivatives marketer across all asset classes, including fixed income, equity and credit. He has joined as v.p. and director. Di Stefano would not provide any further information, including to whom he reports. Previously, Di Stefano worked at Gen Re Securities and most recently for a short time at CDC IXIS Capital Markets. Guido Rauch, head of CDC's London office and head of derivatives marketing, declined comment.

Mizuho Securities is expanding its equity derivatives operation in Japan and has brought aboard two senior traders. Chea Srun, head of equity derivatives trading at Dresdner Kleinwort Wasserstein in Tokyo, recently joined in a new role as head of single-stock equity derivatives and convertible bonds in Tokyo, along with Nav Takhar, director of equity derivatives at Toronto-Dominion Bank in Toronto, as a manager of equity derivatives trading, with responsibility for index trading. They report to Paul O'Brien, head of equity derivatives in Tokyo. "We're expanding the business," said O'Brien, noting that the securities operation has been formed from an alliance between the Mizuho Financial Group and Australia's Macquarie Bank in the last couple of years. O'Brien declined further comment.

First International Computer, a computer manufacturer in Taiwan, is considering entering interest-rate swaps to convert its floating-rate loans into synthetic fixed-rate liabilities. "We're getting quotes from banks," said Amanda Hung, manager of the finance department in Taipei, noting that the firm is looking to hedge TWD2 billion (USD58.1 million) of three and five-year loans issued--via syndication--in December and March. In the swaps FIC will pay a fixed-rate and receive floating, but Hung declined comment on specific rates.

Deutsche Bank has hired Kim Gayer, head of equity sales for Germany, Austria and South Africa at Société Générale in Paris, and his deputy Florian de Sigy. Gayer, who had been at SG for eight years, will join as a managing director and head of the Northern Europe sales team, while de Sigy joins as v.p. focusing on Germany and Austria.

Credit-default swap spreads on mmO2, the mobile phone company spun off by BT Group last year, blew out last Wednesday morning after the company announced its first annual results, which were characterized by what investors perceived as slow revenue growth. Default swap spreads on five-year mid-market protection widened to 400-410 basis points on Wednesday morning from 340-360bps at the start of trading.

Kevin Regan, co-global head of fixed income distribution at UBS Warburg and an individual credited internally with building the fixed income sales team over the last five years, has left the firm. David Shulman, previously co-head with Regan, takes over sole responsibility for the group. Shulman, based in Stamford, Conn., will manage the distribution and credit research teams based in Japan, Asia, Europe and the U.S., according to an internal memo obtained by DW and available online (click here). Regan could not be reached for comment.

UBS Warburg plans to expand its credit derivatives Web site to increase the transparency of basket swaps and synthetic collateralized debt obligation tranches. Alberto Thomas, director in London, said it plans to allow clients to download documentation and monitor transactions from July and will add a relative pricing guide and more sophisticated structuring tools in September. At the moment clients can structure and rate baskets of up to 50 names.

Citigroup Asset Management, which manages E5 billion in fixed-income assets through its London-based group, at the last minute pulled its order for Deutsche Telekom bonds, which were issued late last month. "We were not impressed with Deutsche Telekom's arrogance of not writing down debt and not addressing bondholders' concerns. We had an order in there, but pulled it. Our analyst was of opinion it's one to avoid," says Denis Mangan, director and head of European fixed income. Instead, Citi bought Imperial Tobacco's new issue last week and plans to buy Renault paper once it hits the market. Salomon Smith Barney was one of the co-leads on Deutsche Telekom's E5 billion deal.

Investor's Management Group may look to increase its exposure to collateralized mortgage obligations with premium coupons, on the view that rising interest rates will lead to extension risk. Kathy Beyer, manager of $5 billion in taxable fixed-income, says the firm may add up to 3% of its $160 million Core Bond Composite fund, or $4.8 million, to the asset class, while reducing its cash position. Mortgage spreads on PACs were 100-125 over Treasuries last Tuesday, and Beyer says she expects those spreads to widen, as corporate bonds investors who have sought safety in mortgages gradually shift out of the asset class. An additional 20 basis points of widening would trigger the move, she says.