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Two senior Goldman Sachs derivatives professionals have joined Cheyne Capital Management, a convertible bond fund manager with USD1.1 billion in assets, to develop its investment grade credit business, particularly through the use of CDOs referenced to both bonds and credit derivatives. David Peacock, executive director and head of portfolio synthetics, and John Weiss, executive director and head of the global correlation book at Goldman in London, have joined as portfolio managers and plan to launch a series of managed CDOs it will issue in partnership with a structuring and distribution agent. Peacock said it will chose its counterparties from among the major international derivatives houses.

Vishal Tourani, equity derivatives analyst at Credit Lyonnais in Hong Kong, has resigned due to personal reasons. "I'm looking to take some time off from the industry--as well as watch the Hong Kong Sevens," he said, referring to the international rugby tournament. Tourani was part of the derivatives team that revived the firm's role as a structurer of warrants on baskets of Chinese B shares last year, four years after pioneering the first basket (DW 6/10). He reported to Jean Paul Brasier, head of equity derivatives in Tokyo. Brasier was on vacation and could not be reached.

ISDA master agreement negotiations are often never-ending, expensive and tedious. Negotiations can take months as parties battle over legal, business and credit terms. Although much has been done to standardize the documentation process, there are still numerous issues that parties must negotiate prior to executing the ISDA master agreement. In addition, parties often insist on making additional amendments to the ISDA master agreement that they believe are necessary to minimize legal and credit risks.

Salomon Smith Barney has hired Dan Breen, a private tax consultant, as a managing director in its equity derivatives division in New York. Breen, who has 20-years of equity derivatives experience, has been working as a consultant since leaving Bankers Trust when it was bought by Deutsche Bank in 1999. He will report to Len Ellis, head of structured equity product sales in New York. Ellis said Breen will focus on structuring tax efficient equity derivatives products, but declined further comment. Breen could not be reached for comment.

Scania, a Swedish automaker with a EUR7 billion (USD6.2 billion) balance sheet, may soon purchase its first credit derivative to hedge credit risk in its leasing portfolio. The increasing homogenization of the European truck market is causing the maker of long-haul trucks to incur more concentrated credit risk, said Jan Bergman, head of the treasury in Södertälje. "We now have some U.K. and Dutch companies that are active in the whole of Europe and when they want to buy trucks, they may want to buy 500 trucks instead of two or three [as in the past], which is where you get the exposure," he said. Scania has a diversified leasing portfolio of EUR2.7 billion, although he declined to speculate how much of this would need to be hedged or give further details about the portfolio.

Demand for structured foreign exchange notes linked to dollar/yen or euro/yen has doubled in the last weeks in comparison to February as Japanese corporates, insurance companies and institutional investors lock in trades before fiscal year-end--at the end of the month. "We're seeing a lot of last minute portfolio allocations before year-end," said a trader at Lehman Brothers in Tokyo. "We're on a pace for a 150% increase from February," he noted, adding that about JPY120 billion (USD912 million) in structured notes went through the market last month.

ABN AMRO has launched what is believed to be the first capital guaranteed note in Taiwan, which could open the floodgates for a new market and has stirred up interest from rivals including Credit Suisse First Boston, HSBC, Merrill Lynch and Morgan Stanley. "This is the first guaranteed product in Taiwan," noted Anthony Wah, head of marketing for Asian equity derivatives at ABN in Hong Kong. Wah noted that with strong demand in Asia, particularly in Hong Kong, for capital guaranteed structures, it makes sense to speak with the regulators and bring similar products to Taiwan.

UBS Warburg has hired Kieran Goodwin, managing director of credit derivatives trading at Merrill Lynch in New York, as an executive director in the structured products division of its principal finance group. He is trading credit derivatives and corporate bonds on a proprietary basis and reports to Ken Karl, head of the principal finance group, according to Kris Kagel, spokesman at UBS in New York.

Rexam, the world's largest producer of beverage cans and the fifth-largest consumer packaging company, entered an interest-rate swap and a cross-currency interest-rate swap on the back of two separate bond offerings earlier this month. The company entered a vanilla interest-rate swap to convert a fixed-rate liability in euros and another to convert a fixed-rate sterling-denominated liability into a floating-rate, U.S. dollar-denominated obligation. Chris Bowmer, treasurer in London, said the U.K.-based company has nearly 90% of its operations abroad but also has a strong investor base at home, which is why the company issued in sterling and then converted to dollars. "We have stronger recognition here, investors are more familiar with the company and are more familiar with the equity story," he noted. The company has a GBP2 billion (USD2.9 billion) market capitalization.

Waddell & Reed is looking to sell some $30 million in Fannie Mae 6.5-year pass-through securities. Jim Cusser, portfolio manager of $1.1 billion, says spreads between pass-throughs and five-year Treasuries will not continue to tighten, because volatility is subsiding. Cusser has still not determined whether he will buy two- to five-year bulleted agencies or lower-grade corporates with the funds he raises. Cusser says he will look to Waddell & Reed's equity analysts and the stock market to see whether top-line corporate growth is translating into bottom-line profitability, given accounting worries at many companies. If he feels companies can translate the improving economy into stronger earnings, he will choose corporates rather than agencies. He would not specify a stock market level that would make him more optimistic about potential for corporate profits, and says only that he will monitor earnings announcements.

Usually loan traders are more than hesitant to disclose the strategies and tactics they use to close a deal. Last week, however, one starry-eyed loan trader could not boast enough about how a trip to Italy and a moonlit walk helped him win out the competition for one lucky lady. Who is this Don Juan of the syndicated loan world? He may be sitting next to you.