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Credit-default protection on Tyco International widened 150 basis points Wednesday as skepticism continued to mount over the company's accounting practices and plans to split the company into four parts. Credit spreads on Tyco widened to about 450bps Wednesday from 275bps a week earlier as a host of market players, from hedge funds to high-net-worth individuals, scrambled to buy protection. "Tyco is a very widely owned name. So many people got burned on Enron that they're starting to panic over Tyco... There is not a huge threshold for pain since Enron," said one credit-default swap trader in New York. He added that there is a strong correlation between the owners of Tyco and the owners of Enron. "If you run the numbers, you'll find that everyone who owns Tyco owned Enron," another trader said.

UBS Warburg plans to start structuring synthetic collateralized debt obligations in Asia. It has hired Robin Willis, managing director of structured products at Bear Stearns, as head of principal finance in Hong Kong, to lead the effort, according to Joonkee Hong, managing director and Asian head of debt capital markets in Hong Kong.

The U.K.'sExport Credits Guarantee Department, a government agency responsible for facilitating and insuring British export companies, is planning to make its first investment in structured credit products to hedge credit risk on its GBP20 billion (USD28.5 billion) contingent liability portfolio. The initiative follows a routine internal risk audit from more than a year ago, which led to the creation of an active portfolio management team charged with mitigating credit risk in the government-backed entity's portfolio, according to said Peter Rossington, senior manager for active portfolio management in London

UBS Warburg is in the process of setting up an emerging markets group to cover fixed-income derivatives for Latin America and Eastern Europe. Coverage will include local currency products, such as interest-rate swaps and structured products, according to an official at the firm. The official continued that while the bank has targeted the markets out of the U.S. and London it does not have a dedicated emerging markets group for derivatives products. It currently has a team of 10 debt capital markets professionals, which covers Latin America, primarily focusing on debt origination but also distribute fixed-income derivatives products and a team of four who cover Eastern Europe.

ABN AMRO is beefing up its global credit derivatives team in New York as part of an intensified effort to increase its presence in fixed income credit products, according to Pat Fay, head of North American fixed income in New York. "We've been adding to the staff pretty aggressively over the last three months," Fay said.

Bank of China International, the investment banking arm of mainland banking giant Bank of China, is setting up an equity derivatives group in Hong Kong and expects to start trading over-the-counter and listed derivatives in two months. "This is part of an initiative to become a full-service investment bank," said Warren Kwan, head of equity derivatives in Hong Kong. Kwan joined last month from Deutsche Bank, where he was a senior equity derivatives trader in Hong Kong. The bank will hire seven traders and marketers to add to its five member derivatives team, which started in the last couple of weeks to establish the group. At the moment Bank of China offers interest-rate and foreign exchange derivatives.

United Utilities Electricity, an electricity company in Northwest England, has entered an interest-rate swap on the back of a GBP100 million (USD142 million) bond it reopened late last month, to convert a fixed-rate sterling liability into a synthetic floater. Tom Fallon, treasurer in Warrington, U.K., said the utility entered the swap with Royal Bank of Scotland Financial Markets, which also underwrote the bond. An RBS official did not return calls.

Bradley Berggren, head of the structured products group for equity derivatives at Banc of America Securities in New York, resigned last week. Berggren, who joined the firm through the merger with NationsBanc Montgomery Securities, reported to Jonathan Sandelman, managing director and executive committee member. Sandelman said Berggren decided to quit because he wanted a lifestyle change. Berggren could not be reached for comment.

Cantor Fitzgerald has begun hiring for its interest-rate derivatives swap team and plans to expand its operation into interest-rate options by the end of the first quarter. The move comes five months after the death of Gopal Varadhan, managing director of interest-rate derivatives, in the Sept. 11 attack on the World Trade Center. Varadhan was recruited to lead the firm's hiring effort a month before the terrorist attacks. "We're starting to take small steps back to where we were," said Harry Fry, senior managing director of North American derivatives in New York. Fry said the New York interest-rate swap group will double to about 10-12 within the next several months.

Municipality Finance, a Finish government-backed lending body that provides financing to local government departments, is planning to enter a swap to convert liabilities on a floating-rate Swiss franc-denominated bond into a synthetic floating-rate euro-denominated obligation.Toni Heikkilä, senior manager in Helsinki, said the lender recently raised CHF100 million (USD60 million) in a fixed-rate deal by tapping a CHF200 million bond it sold last year and now is in the process of converting it to a floating euro liability. "When we do our new funding, we almost always swap it into floating euros," he said.

Euro/dollar and dollar/Swiss implied volatility fell last week after Credit Suisse First Boston reportedly sold USD1.5 billion of one-month dollar puts/Swiss calls struck at CHF1.6875 Tuesday and UBS Warburg jumped into the market to sell over a yard of euro calls/dollar puts, according to traders. The euro calls/dollar puts mature Feb. 26 and were struck at USD0.8725. Traders at CSFB and UBS declined comment.