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A $25 million piece of Crown, Cork & Seal reportedly traded through Goldman's desk mid-week in the 86 context as Kmart continued to plummet into the 53 range. Traders said the market perceives the Kmart bank debt to have more upside than the bonds which are hovering around 47 even though the bank debt is pari passu to the bonds.

Deutsche Bank has set pricing and a bank meeting date for the $70 million add-on credit for Merisant, the tabletop sweetener company, whose consumer products include Equal and Canderel. The "B" term loan will have an out-of-the-box spread of LIBOR plus 3 1/4% and the fees will be revealed at the bank meeting next Tuesday. The financing is aimed at paying down subordinated debt incurred in the leveraged buyout of Merisant by Pegasus Capital Advisors in March 2000. The business was purchased from Monsanto, which had decided to concentrate on its pharmaceutical and agricultural products businesses.

Citibank and Merrill Lynch are racing to become the first to offer over-the-counter derivatives on Indian stocks and expect to hit the market in the next six to 12 months. "We want to be the first to bring this out," said an official at Merrill in Mumbai.

An exchange-traded credit derivatives market could emerge from the rubble of Enron's failure as over-the-counter professionals start kicking around the concept of credit products that bypass counterparty credit risk. Paul Mullin, global head of sales at broker CreditTrade in London, expects one of the big exchanges will list some form of credit derivative by year-end. While it would be a liquidity boon to the credit market, a listing would also benefit the exchanges. "They need product and credit is the one that is missing," he noted.

Aquila Energy has hired Valter Stoiani, weather derivatives marketer and structurer at Enron in Houston, in a similar position in Kansas City, Mo. Stoiani, who will do both marketing and structuring, is scheduled to join at the end of January, according to a company official. The official declined to comment on whether this is an expansion to the department.

Convertible bond players in Japan were left with millions of dollars of paper losses after Chugai Pharmaceutical called back a JPY30 billion (USD227 million) 12-year convertible bond issue last month. The Tokyo-based pharmaceutical company exercised early redemption on its 2006 convertible bonds at JPY104 near the end of December after a merger agreement with the Swiss healthcare giant F. Hoffman-La Roche. The bonds were trading at a premium of JPY125 before the early call, which resulted in paper losses of up to JPY19 per bond for firms that held the underlying.

FleetBoston Financial is planning to launch its first synthetic collateralized debt obligation in the Asian market this year on the back of increasing client interest. "Hopefully we'll have this out in the next few months," said Sean Ko, head of fixed-income in Singapore. He noted the CDO is likely to be a USD500 million balance sheet transaction. However, he added, the firm will also structure arbitrage synthetic CDOs.

Natexis Banques Populaires plans to open a London office for fixed income and derivatives sales and initially hire up to 10 salesman as part of the effort. Olivier Regis, co-head of global capital markets, said the bank will open the desk at the end of next month. "To be a global bank without anything for sales in the U.K. is crazy," he acknowledged, adding the firm hopes to change that. Natexis currently has commercial bank branches in London but not on the securities side.

Foreign exchange options pros are at odds over South Africa's rand and related options bets, as the currency continues to weaken against the U.S. dollar and amid the launch of an official South African government investigation into the rand's fall. In a controversial move, the Reserve Bank of South Africa hiked rates by a full percentage point last week to counter the inflationary risks posed by last year's weakness in the rand, which fell 37% against the dollar. Following these moves, Bear Stearns thinks the rand will find support and gain from its recent lows and as a result the firm is recommending zero or low-cost option packages to take advantage. Other firms, such as Citibank/Salomon Smith Barney and BNP Paribas, have less confidence in a rand rebound and said the rate hikes will only further crimp economic growth.

HSBC Asset Management plans to buy over-the-counter equity call options to structure a guarantee on a global sector equity fund it will launch at the end of the month. Bill Maldonado, head of the tactical investment unit in London, said the fund manager will buy calls on baskets of stocks in four underlying sectors: financials, pharmaceuticals, energy and healthcare.

Crédit Agricole Indosuez has hired three professionals for its interest-rate and credit derivatives desks. The French bank has added Pierre Trecourt, v.p. of financial engineering at Société Générale in Hong Kong, as Asian head of credit derivatives structuring, and Lucille Chu, derivative sales and trading at China Construction Bank in Hong Kong, as director for Greater China derivative sales. It has also hired Dennis Wong, interest-rate derivatives trader at Bank of America in Hong Kong, who will hold a similar role when he joins in the coming weeks, according to officials at the firm. Wong could not be reached for comment.

Nomura International plans to hire two or three asset-backed securities specialists for its securitization team in London. Tariq Rafique, head of securitization and asset finance in London, said the new recruits will structure cash and synthetic securitizations. He added that the new hires will report to him and he aims to have them on board by the end of the quarter.