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The head of BNP Paribas' credit derivatives desk in Tokyo threatened to call in the regulator last week after competitors allegedly frontran a convertible bond issue by taking positions in the credit-default swap market. The problem occurred when dealers piled into the credit market two weeks ago to buy protection on Fujitsu before it became widely known that the company was about to issue a convertible bond. Stephane Delacote's complaints were sparked when credit-default swap volumes on Fujitsu increased three-fold in anticipation of a convertible bond offering (DW, 5/13). In a Bloomberg message sent to the major market makers and obtained by DW, he said, "This heavy trading reflects leaks of information and unfair trading." The message continued "we unfortunately will have no other choice than alerting regulators of any massive and unusual trading before the official announcements of a new CB issue." Delacote declined to comment on the matter. For full text click here.

BNP Paribas is expanding its New York foreign exchange institutional sales team, according to Nigel Babbage, global head of currency options in New York. Babbage said the move is aimed at meeting the rapid growth of the hedge fund market in the U.S. BNP plans to hire two or three senior marketers by year-end.

Bank of America is planning on consolidating its Asian credit derivatives trading operation in Tokyo in the coming months, according to Kenichi Tatsuzawa, head of global markets in Tokyo. "We are trying to centralize the trading operation," said Tatsuzawa, adding, "Traders should sit together, creating synergies for the team." The firm is looking to relocate Nick Jones, v.p. of credit trading in Hong Kong, who handles trading for the Asian region, to Tokyo in the coming months. Jones declined comment.

Anheuser-Busch Companies, one of worlds largest brewers, is actively considering entering an interest-rate swap on the back of a recent USD250 million 40-year bond offering. In the swap, Anheuser-Busch would look to receive a fixed rate equal to the 6.5% coupon on the bond and pay a floating rate, according to an official. Carlos Ramirez, spokesman, said the company has used interest-rate swaps in the past and always considers it a useful option.

Banc of America Securities has hired Ben Wilkinson, head of the equity derivatives group at AIG Financial Products in Greenwich, Conn., as a managing director in its equity derivatives group, according to a firm official. Wilkinson, who joined the firm about a three weeks ago, likely replaces one of the four managing directors who left in March (DW, 3/3). Dmitry Genkin, equity derivatives trader at AIG, has also joined the firm. He reports to J.P. LeCourt, global head of equity derivatives trading. Market officials said Wilkinson and Genkin joined separately.

Chubb Financial Products, the structured products subsidiary ofThe Chubb Corp., is working on more than five synthetic double-trigger collateralized debt obligations, two collateralized fund obligations and several other cash and synthetic deals, with the first CDOs expected in the coming months. Chubb has put together CDOs before, but this marks a major initiative to become a securitization and bespoke products house. The firm plans to ramp up its revenues from tailor-made products to 50% from 10% of its business, said Matt Cooleen, head of financial products in New York.

Derivatives houses in Korea, including Citibank and Deutsche Bank, have started marketing structured notes with a digital payout for the first time. "These offer an enhanced rate of return," said an official at Deutsche Bank in Seoul, adding that clients are hungry for the yield offered in such structures in the current low interest-rate environment. Market officials said the notes were a first for Korea.

Areski Ibberakene, global head of foreign exchange trading at Barclays Capital in London, has joined Dresdner Kleinwort Wasserstein, as a managing director and deputy head of equity derivatives trading in London. He will report to Christophe Chazot, global head of equity derivatives.

Jim Xu, a trader in the equity derivatives group at BNP Paribas in New York, has resigned from the firm, becoming the third equity professional to exit the group in the last three weeks. A firm spokeswoman confirmed Xu's resignation, but declined further comment.

One-week euro/dollar volatility jumped to 8.75% in afternoon trading Wednesday from 8.3% earlier in the day, according to London-based traders. Some said vol rose as traders bought euro puts/dollar calls to hedge options they had sold to Morgan Stanley and Goldman Sachs the week before. Two weeks ago the two bulge bracket U.S. firms had bought over a yard of euro puts/dollar calls with USD0.90 strikes in a three hour feeding frenzy (DW, 5/13).

European lawyers and credit pros are working on another modification to the International Swaps and Derivatives Association restructuring definition. The focus is on transferability of loans and the deliverability of the restructured obligation, according to Richard Williams, head of credit derivatives at Abbey National Financial Products and the European buyers of credit protection representative on ISDA's group of six committee. Once this definition has approval from the European regulators the credit players will pitch it to U.S. dealers and end users in an attempt to get one global definition.

Bank of America has hired Mitchell Lench, head of synthetic collateralized debt obligations at Fitch Ratings in London, for its CDO origination team, according to Kenneth Gill, managing director and head of cash CDOs in London. Gill has taken over responsibility for synthetic CDOs.