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Three months after launching its high-yield credit-default swap index, dubbed HYDI 100, JPMorgan is offering investors exposure to BB and B rated baskets. 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 further comment.

JPMorgan has launched an Asia hedge fund sales operation under David Barrosse, co-head of Asian derivatives at JPMorgan in London, who joined from Petra Capital in January. "We're offering the full sweep of derivatives, including futures, options, swaps and structured products but the primary importance is offering ideas," said Barrosse. He continued that the group is concentrating its efforts on a handful of global hedge funds and will provide derivatives execution as well as trade ideas for Asian investments. The group will focus on equity products but will also offer products such as asset swaps and credit derivatives, which would be used for convertible-bond arbitrages.

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 later this month (copies of the proposals are available at www.derivativesweek.com), according to Louise Marshall, policy director in New York. The current comment period ends March 11.

Galileo Galilei wrote: "Enumerate what is numerable. Measure what is measurable and make measurable what is not measurable."

Pathmark Stores, the U.S. supermarket chain headquartered in Carteret, N.J., is considering pulling the trigger on an interest-rate swap following a USD200 million bond offering it issued earlier this month. The offering was the first for the supermarket chain since it emerged from a Chapter 11 bankruptcy restructuring in 2000. The swap would be used to convert the 8.75% fixed-rate bond into a floating-rate liability. The swap would also have a 10-year maturity matching that of the bond offering. "We are always looking at opportunities, such as interest-rate swaps, that could improve our balance sheet," said Harvey Gutman, v.p. of investor relations. Gutman added that Pathmark has used swaps several times prior to its restructuring. He declined to name the counterparties on the company's prior deals or the firms in the running this time. Gutman declined to elaborate on Pathmark's past swaps.

Traders at interest-rate derivatives houses in Taipei, including Citibank, Deutsche Bank, HSBC andCredit Lyonnais, expect an interbank swaptions market to develop in Taiwan this year on the back of the launch of an interest-rate futures contract. Currently, a few caps and floors have been executed but traders have not seen any swaptions.

Standard Chartered Bank has hired Adrian Fong, v.p of rates trading at JPMorgan in Hong Kong, as chief dealer of Hong Kong dollar interest-rate derivatives. The hire is part of the firm's plan to bulk up its fixed income derivatives capabilities, according to Dennis Wong, Northeast Asia regional head of interest-rate derivatives in Hong Kong (DW, 10/14). He added, "Adrian will reinforce our market-making capabilities for Hong Kong dollars." Previously Wong held this role but he said it has added a layer of management to build up the team. Fong, who is due to start this week, was on gardening leave and could not be reached for comment.

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. Former colleagues said Evan's departure was inevitable. One said "[his] power had been reduced over the last six months, the writing was on the wall." Another added that Wolf and Evans had a personality clash and Wolf was responsible for pushing him out. However, Wolf denies there was a personality clash between the two and said Evans was not sacked.

The London Investment Banking Association is scheduled to meet Wednesday with the Financial Services Authority to push for a reduction in proposed regulations governing a listed retail derivatives market in the U.K. One of the central planks of LIBA's position is it wants the FSA to classify derivatives for the retail market as "securities", which would thereby require a less onerous regulatory framework, according to Tim Plews, partner at Clifford Chance in London. LIBA is representing a number of equity derivatives houses which hope to see a comparable U.K. retail equity derivative market to the massive German and Swiss retail warrants markets. Among firms pushing for the creation of the market--either independently or via LIBA--are Deutsche Bank, Citibank, Dresdner Kleinwort Wasserstein and Commerzbank.

Yorkshire Building Society, the third-largest thrift in the U.K. with more than GBP12.5 billion (USD17.8 billion) in assets, has entered a foreign exchange swap to convert into sterling USD350 million of a USD500 million bond deal it sold last month. Chris Parrish, group treasurer in Bradford, said the building society entered a swap with Royal Bank of Scotland Financial Markets to convert the bond into its base currency. Gordon Taylor, director of origination at RBOS in London, confirmed the bank acted as Yorkshire's counterparty.

When trading slowed down early last week a dealer craving for action put a price on his own head, literally. After proposing to shave his head for $1000, traders scrambled to find willing participants to back the deal. By mid-week the price had surged. "He's got a bid of $1500," said one trader, adding, "But, he'll come down." LMW could not confirm if the transaction was ever completed.