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SBC Communications, a telecoms giant in San Antonio, is considering entering an interest-rate swap to convert the fixed-interest rate on a USD1 billion global note offering it brought to market in late January, according to a company official. "We feel now is the time to look seriously at doing this. There is that threat that interest rates will rise, but we know with our credit rating we fair well in the floating rate market," the official added. The offering was rated Aa3 by Moody's Investors Service and AA minus by Standard & Poor's.

Société Générale and ABN AMRO are separately considering synthetic and hybrid collateralized loan obligations referenced to project finance loans. The SG deal is likely to be referenced to USD500 million of loans on its own balance sheet, whereas ABN is planning balance sheet deals of between EUR200-700 million (USD173-609 million) and customer deals of up to EUR500 million.

MBf Unit Trust Management, one of Malaysia's largest asset managers with USD300 million in assets under management, is looking to enter the over-the-counter equity options market in 12 to 15 months for the first time since 1998 to hedge its USD300 million equity portfolio. "If possible we'll have our portfolio hedged 100%," said Philip Tan, senior fund manager in Kuala Lumpur, adding that the fund is looking to buy over-the-counter puts and calls as well as listed futures and options to hedge the portfolio, of which 90% is invested in domestic equities. "We don't want to subject investors to high volatility," said Tan.

Société Générale is looking to execute what is believed to be the first weather derivative in Thailand in the coming weeks. In the precipitation option the Thai agricultural conglomerate is hedged against rainfall below a certain level in May and June, according to an official at SG, who declined to give the exact details of the trade. The option provides USD1-2 million of protection for a premium of approximately 10%.

The firm also plans to hire a senior structurer for its New York-based synthetic collateralized debt obligation group, according to David Allan, managing director and head of securitization in Toronto. Allan said he plans to fill the position by next month.

The Deal Roll-off Chart, provided by Capital DATA Loanware, lists the 50 largest leveraged credit facilities in the U.S. market that are due to mature in the coming month. It is designed to provide a look at potentially available money in the market as credits are renewed or retired.

Edinburgh, Scotland-based Aegon Asset Management will extend duration in the European portion of its £500 million global bond portfolio, roughly £150 million, once 10-year bunds reach 51/4%. Roberto Carulli, fund manager, says he is betting on a yield flattening on the zero- to three-year portion of the curve and is underweight there in favor of the three- to five-year portion. He believes the European Central Bank will raise rates by 40-50 basis points by year-end, as the economy begins to recover. If yields on 10-year benchmark bunds reach 4.80%, Carulli says he may put on some opportunistic short trades. Alternatively, if bunds drop to 4.50%, he will take that opportunity to go shorter. Last Wednesday, 10-year bunds were yielding 4.94%. For the European portion of the fund, Aegon uses the Salomon Brothers European government bond index.

The editorial staff of LMW used to have a view of the daunting "666" atop the building that bears the famous address on Fifth Avenue. Over the last couple of weeks, the staff watched each red "6" come down to be replaced with the Citigroup's ubiquitous Citi logo. The switch is the latest in a new trend in real estate to brand buildings. A spokeswoman for Citi said, "The opportunity came up to put signage there." Maybe a "Top of the Citi" will open soon.

Pat Moon, portfolio manager with Meridian Management, is rotating 10% of the firm's portfolio, or $12 million, from Treasuries into corporate bonds on the view that corporate spreads are back to their pre-November spread levels. Moon reasons that even if corporate spreads remain fairly wide, due to accounting fears, the pick-up in income on the coupon is significant enough to warrant the move. But, with recent positive economic news and inventories at their lowest levels since the early eighties, Moon anticipates corporate spreads will tighten and Treasuries will drop in price.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market last week. It also tracks facility amounts, ratings, pricing and maturities.

Missouri Valley Partners will extend its duration to neutral against its index if the recovery shows further signs of faltering. Steven Jones, portfolio manager of $175 million, says that if the S&P 500 index falls below 1000, he would consider bringing duration to a neutral position versus its benchmark, the Lehman Brothers aggregate index. Last Tuesday, the S&P 500 was at 1083. At 4.26 years as of last Tuesday, Missouri Valley Partners was 5% short the 4.49-years of its bogey. Other indications Jones would consider before adding duration are continued weakness in the economies of Europe and Japan, and flat consumer spending after inventories are replaced. In making these determinations, he will rely largely on the view of Ed Hyman, economist at ISI Group. To add duration, Missouri Valley would buy 10- to 30-year Treasuries and sell Treasury bonds of shorter duration.