Search results for

Fortis Bank is marketing its first global sector click notes and has used over-the-counter derivatives to structure the product. Koen Zoutenbier, senior account manager on the derivatives and structured products desk in Amsterdam, said the product is structured by purchasing a zero-coupon bond and a click option.

Groupe Casino, the French retail superstore, has entered an interest-rate swap to convert a fixed-rate bond it issued earlier this month to a floating-rate liability. Regis Taillandier, head of funding in St-Etienne, said the company converted the EUR400 million (USD350 million) transaction into a EURIBOR-based rate through over-the-counter swaps with the lead managers on the deal: JPMorgan, Société Générale, Credit Lyonnais and Natexis Banques Populaires. A Natexis official confirmed the swap while a SocGen official declined to comment. JPMorgan and Société Générale officials on the swap did not return calls.

Marsh, one of the largest insurance brokers in the world with USD4.78 billion in revenue, is working to set up a weather derivatives desk in New York to broker plain-vanilla weather derivatives. Marsh plans to broker deals on behalf of its insurance clients, according to a company official. The company has hired Partho Ghosh, a weather derivatives marketing manager at Enron in Houston, to help lead the effort. Ghosh declined to comment.

A 50% cut in bonuses is reportedly to blame for prompting half of Goldman Sachs' convertible arbitrage trading desk in New York to quit over the last month, according to market officials. Trader Alex Lache recently became the third member of the team to depart. Lache left the firm to join Camden Asset Management, a hedge fund in Los Angeles, to fill a similar position. Bruce Corwin, spokesman at Goldman Sachs in New York, declined comment.

Credit default-swap protection on Household International, the consumer finance giant in Prospect Heights, Ill., widened 12 basis points Wednesday, as investors lost confidence in the firm after allegations that it overcharged borrowers in California, according to credit-default swap traders. Mid-market default swaps were quoted around 215bps Wednesday in comparison to 180bps a week earlier.

Irish Life & Permanent, Ireland's largest life assurer and mortgage lender with more than EUR40 billion (USD35 billion) under management, has entered an interest-rate swap in a punt that the sterling swap curve will flatten. Niall Boles, chief dealer in Dublin, said the group's proprietary sterling swaps book entered a GBP250 million (USD357 million, notional) two-year swap earlier this month, in which the company receives a 5.1% fixed and pays six-month LIBOR, which was 4.25% at the time it entered the contract. "We like the carry trade, we think the curve is quite steep at the moment because people are expecting rate hikes," he noted.

Traders at bulge bracket derivatives houses, such as Citibank, Deutsche Bank and Société Générale, in Korea expect volumes of interest-rate options, including caps, floors, and swaptions, to rocket this year on the back of the Korea Futures Exchange launching options on Korean treasury bond futures in May. "Price-makers for caps and floors will be able to use the options to [hedge] volatility," said K.H. Kim, v.p. of derivatives products at SG in Seoul. He continued that by year-end, trading in interest-rate options could reach daily volumes of KRW10-20 billion (USD7.6-15 million). Current volumes are KRW100 billion a year, said an official at Citibank in Seoul.

Last week's disclosure that HSBC will not pay bonuses to its equity cash and derivatives professionals had rivals and headhunters abuzz with speculation this sounds the death knell of the firm's investment banking pretensions. Although bonuses are down around 30-50% across the board in equities, market professionals said HSBC's apparent decision to do away with them altogether is unprecedented.

The International Swaps and Derivatives Association is looking to hire an assistant director for its London office to deal with risk management and accounting issues on a global basis, according to Emmanuelle Sebton, head of risk management in London. The hire will report to her and fills a vacancy left by a departing official whom Sebton declined to name.

The International Swaps and Derivatives Association has sent out a second draft of its proposed master agreement. Kimberly Summe, general counsel at ISDA in New York, said it received approximately 40 comment letters from banks, law firms and end users in response to its first draft and has incorporated these into a new version. The second draft will be discussed at a meeting in London and New York on March 12 or 14, with comments due in about a week later.

AMP Henderson Global Investors (NZ), an asset manager with over NZD11 billion (USD4.5 billion) under management, is planning to purchase and sell credit-default swaps in the coming months to diversify its NZD4 billion fixed-income portfolio. "We have the ability to do this, we're just waiting for the right opportunity," said Chris Wozniak, cio in Wellington. "This will become another part of our toolbox," he added.

Merrill Lynch is considering launching an onshore interest-rate derivatives desk in Korea this year as the regulatory environment will open up for securities houses in the coming months, according to officials at the firm. "We are juggling with the risk/reward, cost versus profit equation," said an official at Merrill in Hong Kong. He continued that the firm will make the decision in the next couple of months but noted if it goes ahead it could be up and running by year-end. Currently interest-rate derivatives marketing for Korea is handled out of Hong Kong while Tokyo is the regional hub for trading.