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Caja de Ahorros de Valencia, Alicante y Castellón (Bancaja), Spain's fourth largest savings bank, this week launched a Eu600m securitisation of loans to Spanish small and medium-sized enterprises (SMEs). Lead managed by JP Morgan (books), Bancaja and Crédit Agricole Indosuez, the deal is the second securitisation this month of so-called PYME loans. These are loans to SMEs eligible for cheap credit from the Spanish government.

The International Swaps and Derivatives Association plans to take the next step in revising its original credit derivatives definitions, which date back to 1999. The trade body has sent out the new definitions in draft form and plans to hold a video conference on Monday. Credit derivatives officials said the definitions are being revised to consolidate supplements, such as convertible deliverability, and to tighten up some of the technical language, both of which would make credit derivatives a more efficient product.

Three months after launching its high-yield credit-default swap index, JPMorgan has added BB and B-rated tranches. The BB tranche offers a fixed 8.625% coupon on a basket of 55 names, while the B-rated tranche offers a fixed 9.875% coupon on 44 names, according to an official at the firm. He added that the move to include the tranches on the index was made to meet investor demand for more targeted risk exposure to the market. He declined to comment further.

Allied Waste's term loans "B" and "C" traded up to 99 this week from 98 1/8 last Thursday as traders reported investors were showing more interest in the credit trading roughly $10 -20 million in the name. Dealers said institutional players were replacing lower performing names in portfolios with Allied Waste, a strong par name.

Three members of Bank of America Securities' equity derivatives trading team in New York, along with the business manager of the trading group and two risk management system professionals, departed the firm Tuesday morning to launch a hedge fund.

Hugh Evans, managing director and co-global head of credit derivatives trading at UBS Warburg in London, left the firm last week. He reported to Robert Wolf, co-global head of fixed income in Stamford, Conn. Wolf said Sal Nero, Evan's counterpart in the U.S., has become global head and the firm will hire a European head of credit derivatives in London. He added that the firm plans to hire a further five-10 sales, structuring and trading pros in its London office this year and is committed to the business.

Bankers and analysts disagreed unanimously with comments made by former Enron ceo Jeffrey Skilling, apportioning blame to the banks on the collapse of the energy company, suggesting material adverse change clauses in loans should be prohibited for federally insured banks. Skilling, in front of a senate panel yesterday, said the company would have survived had many banks not invoked the MAC clauses in loan agreements.

CIBC World Markets and BNP Paribas have joined Deutsche Bank at the top tier of the $500 million credit for Magnum Hunter Resources. The new credit line partially funds the merger with Prize Energy and also refinances the existing credit lines of both companies (LMW, 2/25). Chris Tong, Magnum's senior v.p. and cfo, explained the banks will be agents, though Deutsche Bank has fully underwritten the loan. Magnum is an independent exploration and development company, involved in the crude oil and natural gas markets.

Steel Dynamics picked J.P. Morgan and Morgan Stanley to lead a $550 million refinancing that includes $350 million of bank debt, after previous lead Mellon Financial sold a portion of its loan portfolio, including the old Steel Dynamics deal. Tracy Shellabarger, v.p. and cfo of Fort Wayne, Ind.-based Steel Dynamics, said, "Mellon sold loan portfolios to GE Capital a couple of months ago." He declined comment on whether GE bid to lead the credit after he started shopping elsewhere or why J.P. Morgan and Morgan Stanley were selected as replacements. The $350 million bank debt is a mixture of revolver and term loans, while there is also a proposed issuance of a $200 million in notes due 2009.

Bear Stearns International has hired Reza Rezaeian, convertible arbitrage and default swap trader at Enron Credit in London, as a convertible asset swaps trader. Rezaeian said credit-default swap traders previously handled convertible asset swaps and he is the first and only planned full-time hire.

BNP Paribas is planning to issue synthetic collateralized debt obligations for the first time in non-Japan Asia in the coming months on the back of growing client demand. "It's a natural evolution," said Guillaume Dieu, director and head of Asia Pacific synthetic securitization in Hong Kong. He continued that the firm will look to issue its first synthetic CDO, likely USD1 billion in size, in the next three to six months and possibly two or three additional transactions of the same size later this year.

Traditional collateralized debt obligation (CDO) investment structures may not be flexible enough to meet the objectives of all investors. CDO combination securities have arisen to address this need. Combination securities can be tailored for each investor based on the desired credit rating, minimum coupon, yield target, and capital guidelines.