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Tokyo-Mitsubishi International plans to hire two credit derivatives quantitative analysts in London to add to its fledgling European credit derivatives business. Peter O'Neill, head of credit trading in London, said the team, which comprises two traders, started dabbling in the market late last year and needs research support.

One-month yen/U.S. dollar implied volatility fell to 10.6% last Wednesday from 11% a week earlier as demand for yen puts/dollar calls declined in line with a growing uncertainty over Japan's finance ministry's strategy on the strength of the yen. The week began with traders believing that the yen would continue its downward course until the middle of the day Wednesday, when Yasuo Fukuda, Japan's chief cabinet secretary's comments reversed the market. Fukuda said that although the current exchange rate is acceptable, its continued fall over the last three months has happened too rapidly. Traders in New York interpreted the comment to mean that Japan may not want the yen to decline much further without a respite.

UBS Warburg wants to hire two structurers for its growing collateralized debt obligation and wholesale repackaging team in London. The firm was interviewing candidates last week, said Hugh Evans, managing director and co-head of global credit derivatives trading in London and to whom they would report. The hires would double the firm's structuring effort in London to four professionals.

Lenders required to uphold a promise by Argentina's administration to convert dollar debts under USD100,000 into pesos will be left holding the foreign exchange risk that the currency will devalue further with no way to hedge it, according to foreign exchange professionals. "How can they hedge the risk. They're going to be left holding the bag. No one would want to be on the other side of that trade with a 30% devaluation in the country's currency," said George Handjinicolaou, former head of global emerging markets at Merrill Lynch. The new official peso rate is at ARS1.40 to the U.S. dollar. "The banks have no choice but to eat the risk and hope for a government bail out. There isn't a counterparty alive willing to be on the other side of a trade like that," said one foreign exchange options trader in New York.

Dresdner Kleinwort Wasserstein plans to revive its credit derivatives trading desk in Tokyo next month with the hire of Mike Gordon, manager at Enron Credit in Tokyo, according to officials familiar with the situation. Gordon was the only credit derivatives pro at Enron Credit in Tokyo and was let go last month after Enron collapsed. He is expected to sign on with DrKW in the coming weeks. A DrKW official declined comment on Gordon, but said, "we're evaluating additional hires for the credit desk in Tokyo," noting that the firm will likely hire an additional structurer and trader within six months. Gordon could not be reached for comment.

If you don't mind, this is a stick up! Italy's "gentleman bandit" known for his affable style while robbing banks in the 1960s and 1970s recently died in prison of a heart attack. According to Reuters, Horst Fantazzini conducted nonviolent stickups across northern Italy. He won his nickname after sending roses to a bank teller who fainted during a robbery. Fantazzini enjoyed "semi-liberty," an alternative prison sentence which allows model inmates to spend part of their time outside of jail, when he was arrested shortly before his death for trying to rob a Bologna bank.

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 this month. It is designed to provide a look at potentially available money in the market as credits are renewed or retired.

Merrill Lynch Investment Managers will make an off-index bet on the European corporate market once the yield curve flattens later this year. Currently, the steep European corporate yield curve favors trades in the swaps market, says London-based portfolio manager, Nick Gartside. The specific credits the firm will add to its E500 million European government bond portfolio have yet to be determined, but it will likely select lower-rated defensive names in the retail and utilities sector. In addition, depending on the relative value of zloty- and forint-denominated bonds, Gartside may tap into the Polish and Hungarian bond markets for some excess returns. Gartside would make these trades on purely an opportunistic basis.

The Texas Permanent School Fund is looking to increase its position in agency debentures, corporates and commercial mortgage-backed securities. It will make the moves using royalties from oil fields it owns and what could be $300-400 million in new money from equity holdings. Carlos Veintemilles, portfolio manager of $7 billion in fixed-income assets, says the fund's board will meet this week to determine whether to adhere to its allocation guidelines and shift equity assets to fixed income. Equities currently account for 59% of total assets, and the fund's board had earlier approved a 55:45 equity/fixed-income split.

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

Linda Patterson, portfolio manager of Austin, Texas-based Patterson & Associates, says her firm will place $250 million in new cash she expects to receive into short-term agency debentures in anticipation of a Federal Reserve rate cut in two weeks. Patterson says the firm's clients are government entities that are now collecting their tax money, which is why she expects the cash infusion. She reasons that she will place the cash into agency debentures instead of Treasuries--the only two asset classes in which the firm invests--because she believes Treasuries are overvalued versus agencies. She notes that agencies are currently yielding 23 basis points more than Treasuries on two-year and shorter maturities.