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Wachovia Securities plans to make its first foray into the structured equity derivatives market. The firm has hired Steve Young, an equity derivatives structurer and quantitative researcher at Merrill Lynch in New York, to lead the effort. The firm plans to market the new products, which will include reverse convertibles and possibly equity-linked notes, to retail and high-net-worth customers in the next two months.

The Deal Roll-off Chart, provided by Capital DATA Loanware, lists the 50 largest leveraged credit facilities in the U.S. market that are due to mature in the coming month. It is designed to provide a look at potentially available money in the market as credits are renewed or retired.

It's summertime and the ... wait, no it isn't. Loan market players seem to have warmer weather on the brain. In characterizing the state of the market last week three different bankers said the market was "smokin' hot," "on fire" and "flaming hot."

Schroder Investment Management, which manages £3.3 billion in gilts and £8 billion in total fixed-income assets, will wait until yields on 10-year gilts are in the 5.35-5.4% range before reconsidering its slightly short duration strategy. Last Monday, the yield on the 10-year was 5.14%. Andrew Argyle, associate director responsible for conventional gilt portfolios, says the firm moved short to its benchmark, the All Stocks Gilt index, by one quarter of a year. The benchmark's duration is 6.5-years. Argyle says he made the adjustment because he feels yields are range bound for the moment between 5.10% and 5.40% and the firm has taken the opportunity to go a little short at 5.15%.

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.

As the Treasury curve flattens, Turner Investment Partners will reallocate its exposure to 6% and 6.5% coupon pass-throughs from 65% to 45% (which would represent about $40 million in the core portfolios) by buying five- to 10-year Treasuries. Jim Midanek and John Pak, portfolio managers of $700 million in taxable fixed income, expect the Treasury curve to flatten because they see the Federal Reserve raising interest rates quickly once it begins a tightening cycle, likely bringing the Fed funds rate to 3% by the middle of next year. With 238 basis points of daylight between two- and 30-year Treasuries as of last Monday, Midanek says another 65 basis points of flattening between those poles would trigger the MBS sales.

Chris Mahoney, portfolio manager with J. & W. Seligman, will rotate 10% of the firm's portfolio, or $200 million, out of agencies and Treasuries and into corporates. The assumption behind this move is that corporates will outperform as the economy picks up. Mahoney adds that there is no particular indicator, or event that will trigger the move.

The Royal Bank of Scotland has hired Thierry Sebton, Mizuho Corporate Bank's second-in-command in its structured finance department, and two of his junior colleagues, whose names could not be ascertained as of press time. They are joining RBS' asset-backed securitization team and will report to Philip Basil, head of ABS. Basil refused to answer any questions about the hires, where they fit into the ABS department's plans or who, if anyone, they replaced. A RBS spokeswoman did not return calls by press time. A spokesman at Mizuho confirmed Sebton's departure to RBS, but declined further comment.

Institutional players offered more than $1billion for Silgan Holdings' $300 million "B" loan before the bank meeting was even held April 25. Deutsche Bank, Bank of America, Morgan Stanley and Citibank all have roles on the $800 million bank deal, which also comprises a $400 million, six-year revolver and a $100 million "A" term loan, said a banker. Silgan is looking to refinance to take advantage of the current investor enthusiasm for the paper, said Harley Rankin Jr., executive v.p. and cfo of Silgan. The $300 million "B" is still being shopped and the LIBOR plus 21/ 2% pricing is unchanged, the banker noted. The pro rata is priced at LIBOR plus 2%.

UBS Warburg has launched a European distressed debt effort to be coordinated through its London office. The firm has hired Martin Teevan, formerly a member of ING Barings' high-yield team in London, to spearhead the effort in the newly created position of director of distressed debt trading. Teevan will start out by trading names from the firm's high-yield book that have fallen into the distressed category, a firm official said. He reports to Jeff Horan and Drew Doscher, Stamford, Conn.-based co-heads of global distressed debt. Andrew Casswell, head of high-yield trading at ING says Teevan, who left the firm six months ago, will not be replaced.

About $7.1 billion in investment grade supply hit the market, although the number drops quickly if the $3 billion Italy global is removed from the equation. (Generally, we include sovereign and supranational issuance in our calculations although often they are not a good gauge of the overall health of the market.) Overall, the investment grade market remains fixated on the volatility in the telecom sector (WorldCom, Qwest and AT&T have garnered the most headlines) and other names like Tyco, which have also been in the news. As the market starts to stabilize, the primary market should also start to pick up given still-low absolute borrowing rates. The week saw a healthy high yield calendar as inflows into the sector support primary issuance. For the week, $1.6 billion in new junk deals hit the market.