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Westdeutsche Landesbank is beefing up its derivatives marketing team in the U.S. as part of a plan to boost its sales presence in the North American derivatives markets. The firm recently hired Brian Colgan, a senior derivatives marketer from Commerzbank Securities, according to an official at the bank. Colgan, who joined WestLB's New York office last month, is focusing on marketing derivatives products to non-European clients in the U.S. and Canada. Colgan declined to comment.

Salomon Smith Barney is advising clients who believe that it will take several months for airline stocks to rebound to pre Sept. 11 levels to sell short-term calls on the companies. As the airlines continue to struggle to restore confidence in the traveling public, Ryan Gould, equity derivatives strategist in New York, recommends that clients sell short-term calls struck at or near pre-Sept. 11 levels. The calls mature anytime before September and have a premium of at least 5% of the notional value. The trade is aimed at money managers.

A Facing Lift ... The sidewalk slab sporting the JPMorganChase logo in front of the bank's Park Avenue headquarters got a makeover last week when a blue, tough-faced vinyl covering went over the metal surface--which went over the original stone surface. Press officials at J.P. Morgan did not comment by press time last week, but the move to blue seems to address the weather beating the previous sign took. That sign was growing discolored at its panel seams and someone (a vandal? a rival banker?!) or something had knocked out some of the detailing in one of the letters. The new sign would seem to be resistant to those hazards. The right resistance is everything.

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.

National City Investment Management, a Cleveland money manager with some $4 billion in taxable fixed-income under management, is looking to shorten its duration to a neutral position. Andy Harding, portfolio manager, says he believes Treasuries are oversold, and he does not expect the economy to improve until the middle to the end of the second quarter. As a result, the firm has extended duration in recent weeks to 10% long to its various benchmarks across 95 separate portfolios. Portfolios managed against the 4.5-year Lehman Brothers aggregate index, for example, have a duration of 4.7 to 4.8 years. Harding says the firm will move to a neutral duration once the yield on 10-year Treasuries reaches 4.60%, which he believes could happen in a month, if not sooner, given the market's volatility. Last Tuesday the 10-year Treasury was yielding 5.06%.

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.

State Street global Advisors, which runs €19 billion in global fixed-income assets from its London office, is going to increase its position in automotive credits by adding the expected new issue from Daimler-Chrysler when it hits the market in the New Year. Nicole Jackman, head of European corporate bond management, says the firm will increase its now slightly underweight position in autos to a neutral one relative to its benchmarks. She adds that she likes shorter-dated auto paper because it has an attractive breakeven on the shorter end of the curve and is thus less risky. She says she is waiting for the new issuance rather than buying in the secondary market because she believes she will receive a new issue premium. Following the same thinking, Jackman has already bought Ford's 5.625% notes of '04 and General Motors' 5.75% notes of '06 when they were issued recently.

Bentley Myer, portfolio manager with William Blair Investments, says he is going to swap 5% of the funds he manages, or $25 million, out of Treasuries into corporates, on the view that the economy is bound to recover and that corporates will outperform Treasuries in 2002.

Some investors are avoiding European utilities, fearing there may be more downgrades in the works as companies are forced to add debt to their balance sheets to finance acquisitions. Nicole Jackman, head of European corporate bond management at State Street Global Advisors in London, says she's underweight utilities, especially highly rated ones, because she is worried about downgrades. For example, last week Electricidade de Portugal (Aa3/AA-) was put on a negative outlook by Standard & Poor's in response to fears its financial profile will erode.

High-yield strategists and investors are split over whether portfolio managers should continue to increase credit risk in their portfolios, as they have done in recent weeks. Spreads between single-B credits and higher-rated double-Bs were at a record 505 basis points on Oct.5, but had narrowed to 335 basis points last Monday. Walter McGuire, global high-yield strategist at Deutsche Banc Securities, expects that gap to narrow another 10 basis points by year-end, but he says investors should move even further down the credit ladder, adding some triple-C rated names to their portfolios. McGuire projects credits yielding 20-30% (which include a number of triple-Cs) will return 5% over the next two months.

Securitizations from Latin America, particularly Brazil, should grow in number next year, according to London asset-backed bankers and analysts. Aside from six bank deals, the region saw only two corporate securitizations this year: Petrobras, Brazil's blue-chip oil company, and PDVSA Finance, a securitization vehicle launched by Venezuela's state-owned oil company PDVSA. Nancy Shue, structured finance analyst at Standard & Poor's in New York, predicts that strong exporting companies will likely seek structured deals featuring political risk insurance in 2002, as the international debt capital markets remain firmly shut to LatAm corporates--at least for plain vanilla bonds. Already, Companhia Brasileira de Bebidas (CBB) has announced its intention to launch a $500 million securitization featuring a guarantee by its parent company Companhia de Bebidas das Americas and carrying political risk insurance. CBB will use some of the proceeds to refinance existing debt and other companies will likely follow suit as the need for more creative financing methods increases.

An aggressive financing package from adviser Lehman Brothers propelled GTCR Golder Rauner's $800 million cash bid for TSI Telecommunication Services past other competitors. GTCR principal David Donnini confirmed Lehman bid aggressively, but could not comment on the other firms' approaches. Sources familiar with the discussions said Lehman was very aggressive in stepping up with the money and allowing for generous leverage ratios--a step that set it apart from competing bids. "The bids [for TSI] were due a couple of weeks after Sept. 11 when the market was volatile and Lehman stepped up when not every other institution was willing to provide to the other sponsors," one source added.