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Scania, a Swedish truckmaker with operations in more than 100 countries, has entered an interest-rate swap to convert the proceeds of a fixed-rate bond it sold earlier this month into a floating-rate liability. The company entered the swap for most of the EUR500 million (USD441 million) it raised through the bond offering, according to Jan Bergman, head of the treasury in Södertälje. He said the company issued a fixed-rate deal to meet investor demand but it prefers to have the liability in floating-rate for its own risk management purposes.

Cathay Life Insurance, Taiwan's largest insurer with over TWD1 trillion (USD28.5 billion) in assets, is considering investing in credit derivative products such as credit-linked notes and synthetic collateralized debt obligations for the first time. "The idea is to diversify our portfolio," said Alex Chang, division manager of the international investment department in Taipei. The company has a USD2-3 billion fixed-income portfolio.

Credit-default spreads on Swedish and Swiss engineering concern ABB blew out last week and its curve inverted as buyers sought default protection on the company after a two-notch downgrade from Moody's Investors Service left it in a liquidity crunch. Five-year spreads widened roughly 300 basis points to 700bps Wednesday, with no offers, and the cost of one-year protection skyrocketed 500bps to 750bps.

Bear Stearns has hired Ralph Orciuoli, managing director of structured credit products at Bank of America in Tokyo, in a new role as head of credit trading in Tokyo, according to Lenny Feder, head of credit trading at Bear Stearns in Tokyo. Feder said the firm is looking to build up its credit derivatives group in the coming months, hiring two traders and two marketers. "We're looking to take it to the next level," said Feder, noting that with the recent revamp in Tokyo, which brought Feder over from the New York office in a new role (DW, 3/8), the firm is focused on expanding its credit derivatives business. Currently, the credit trading desk reports directly to Feder.

XL Capital Assurance has hired Iftikhar Hyder, a director in Barclays Capital's cash and synthetic collateralized debt obligation group in New York, as a managing director of credit. "I've been very happy at Barclays, but [XL] approached me and it's a very good opportunity," Hyder explained, noting he is moving up a notch to the managing director level. At XL he will report to Pat Mathis, senior managing director of credit in New York.

Bank of America plans to close its Asian equity derivatives desks in Japan and Korea. "Frankly, it just didn't make sense. The business wasn't there," Yaz Aiuchi, president of Banc of America Securities Japan in Tokyo, told DW. BofA will try to find alternative positions for the 12 Asian equity derivatives staff. "Our number one priority is to find alternative positions internally. However, if there's no right position then we'll have to ask them to leave."

BP Oil International is looking to hire an oil derivatives salesman for its London-based oil trading team. The hire would act as a liaison between BP and its end user clients of oil derivatives as part of the crude trading team. Mark Sturgess, manager of crude trading in London, confirmed the company is looking to make the hire but declined further comment except to say the oil derivatives salesman will report to Sturgess and Grahame Cook, who is also a London-based manager of crude trading.

Credit Suisse First Boston is looking to beef up its presence as a structurer of high-yield credit derivatives. Joe Russell, global head of leveraged finance trading in New York, said the firm will look to add two senior traders and possibly a structurer, though it has yet to be determined whether CSFB will move staff internally or hire externally. Russell said credit derivatives, traditionally associated with investment-grade credits, have increasingly begun to trade on high-yield and bank loan desks. Russell attributes the increased popularity to the increasingly volatile credit environment of the last 12-18 months. He would not disclose specific clients who have demanded credit derivatives, though he said the product is particularly popular with hedge funds.

Deutsche Bank has hired Olivier Vigneron, correlation trader at Goldman Sachs in London, in a similar role. He will report to Mark Stainton, head of exotic credit-derivatives trading in London, according to Antonio Di Flumeri, global co-head of investment-grade credit derivatives trading in London.

WestLB has tapped its future flow securitisation for Türkiye Vakiflar Bankasi (Vakifbank), backed by diversified MT-100 payment rights from correspondent banks in Europe and the US. Vakif Finance Co Ltd, a Jersey SPV, issued a single $200m tranche in June 2001. This week WestLB launched a further $200m tranche with a two year average life and a three year maturity. The notes were priced at 350bp over three month Libor.

Scottish Power will release details next week of the £1.9bn restructuring of Southern Water Services, its UK utility subsidiary, expected to be carried out by the end of March. Lead managed by Credit Suisse First Boston and RBS Financial Markets, the deal will ringfence £100m of existing debt with proceeds from the new issue, raising the water company's gearing to around 90% of its regulatory asset value (RAV) of about £2.1bn.

Iccrea Banca, the central bank for Italy's cooperative banking system, is preparing to launch a Eu889.6m club funding vehicle for 117 cooperative banks across Italy. Arranged by Merrill Lynch and Iccrea, with CDC Ixis, SG and Iccrea leading the bond placement, the deal is designed to open a new avenue of funding for Italy's regional, unrated cooperative banks. The banks are mutually owned, and their lending activities are restricted.