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A 30-strong team of former Gen Re Securities managers, traders and structurers are shopping themselves around the major financial institutions in London, Bermuda and New York. The team, which is led by Kevin Lecocq, managing director and global head of marketing and structuring in London, has interviewed at Swiss Re, HypoVereinsbank and Goldman Sachs, according to officials familiar with the situation. Press officers at the three firms declined comment. Lecocq could not be reached.

ArvinMeritor, an auto parts manufacturer in Troy, Mich., is considering entering an interest-swap on the back of its USD400 million bond offering last month. "We feel now is an ideal time to examine the possibility of doing an interest rate swap. Nothing has been set in stone. But it's definitely something we're considering," said a company official. The company held off on going ahead with a swap immediately following the offering because there was still a high level of uncertainty over the course the Federal Reserve might take after lowering interest rates consistently throughout 2001. "We wanted to be certain the Fed would not look to raise rates over the next eight months, at least. The latest comments seem to support that," the official said.

Dupont Securities Group, a subsidiary of Dupont Direct Financial Holdings, plans to hire six interest-rate derivatives marketers in New York in a move to offer more relative-value trade products for its clients. The firm has hired Steven Block, head of interest-rate trading at Commerzbank Securities in New York, as a managing director of derivatives trading. Before Block joined Lewis Goldman, senior managing director of capital markets and new business development, handled the responsibilities. The firm created Block's position to increase the scope of its relative-value department.

Two Credit Suisse First Boston equity derivatives marketers plan to set up a long/short hedge fund in New York next month. Joe Vencil, managing director and marketer to high-net-worth individuals and corporations, andManit Rye, a marketer for CSFB in London, plan to raise USD15-25 million in seed capital to launch the fund and employ a long/short strategy that focuses on small and mid-cap corporations, Vencil said. The total capacity of the fund has yet to be determined, but increasing the fund above USD50 million would likely require the hiring of additional professionals, added Vencil.

Lehman Brothers has hired Peter Hammack, equity derivatives structurer at Credit Suisse First Boston in New York, as a v.p. of equity volatility trading. He will focus on trading structured products, according to an official. Hammack had been out of the industry since leaving CSFB six months ago.

Credit derivatives dealers, including JPMorgan, BNP Paribas and Société Générale, are bidding for a portfolio of synthetic CDOs that Gen Re Securities has put on the block. The portfolio is believed to include a significant portion of deals that Gen Re purchased from Enron Credit following the energy company's collapse, according to a market official. Tim Frost, head of European credit derivatives at JPMorgan, declined comment. Le Liepvre Hubert, head of credit structuring at SocGen in Paris, declined to confirm or deny the move and Kate Webster, a spokeswoman at BNP in London, declined comment. Officials at Gen Re did not return repeated calls.

Chase Trust Bank has bought JPY11 billion (USD82.3 million) (notional) of interest-rate caps as a hedge in a securitization it structured for Japanese consumer finance company AEL Corp. It bought the caps from ING Barings, according to Udo van der Linden, v.p. of the Asian securitization group at ING in Tokyo.

Deutsche Bank has restructured its flow and structured equity derivatives departments as a global unit. The department is now headed by the European head, Yassine Bouhara, managing director and head of structured and flow equity derivatives, according to Rick Goldsmith, co-head of global equity derivatives.

Dresdner Kleinwort Wasserstein is looking to hire at least one structurer for its structured credit group in New York within the next month. The new hire would focus on structuring synthetic collateralized debt obligations, according to an official at the firm. The planned hire is prompted by the increase in deal volume in the U.S. "We recognize this is an area we need to build. Synthetic CDOs are the wave of the future," the official said.

The European Investment Fund, a subsidiary of the European Investment Bank, has set up a risk management team which could make the fund's first use of over-the-counter derivatives to hedge the performance of its EUR2 billion (USD1.75 billion) venture capital portfolio. That would mark the first time an institution has used derivatives to hedge the performance of its private equity portfolio, according to equity derivatives professionals. The OTC derivatives would form part of a broader risk assessment and management initiative the EIF is undertaking and would not occur until after the risk management office has quantified its risks, which is expected to take until year-end.

One-month U.S. dollar/Japanese yen implied volatility skyrocketed more than 200 basis points Thursday as the yen surged to its highest level since late last year and had its biggest one-day gain against the dollar in more than seven months. Implied vol rose from 8.8% Wednesday to nearly 11% Thursday; spot was JPY128.6 Thursday, compared to JPY130.6 the day before. "It's two vols more, it's beautiful," gushed one options trader at a European bank in London. Spot had been rangebound for the previous month.

Finland may use over-the-counter derivatives to alter the maturity profile of its EUR60 billion (USD52 billion) portfolio of outstanding debt for the first time. Petri Piippo, senior manager in the debt management office at the State Treasury in Helsinki, said the government is conducting a modeling project to determine the optimal lowest-cost way to manage the portfolio, including through the swaps market.