Search results for

Bank One, the sixth-largest bank holding company in the U.S. with more than USD270 billion in assets, is setting up a weather derivatives desk in New York to broker plain-vanilla weather derivatives, according to market officials. The firm has hired Scott Matthews, director of weather derivatives marketing at United Weather in Jersey City, N.J., to set up the desk. Matthews joined its New York office three weeks ago. He confirmed the move, but declined further comment.

Brian Heyworth, head of fixed income and derivatives sales to institutions for the U.K. and Ireland at Bank of America in London, has been promoted to European head of fixed income and derivatives sales to institutions. Heyworth replaces Gerhard Seebacher who moved to New York last year to take the new position of global head of derivative product sales, according to Heyworth. Seebacher covered both positions until Heyworth was promoted at the beginning of the month. Seebacher did not return calls.

Citibank and Merrill Lynch are racing to become the first to offer over-the-counter derivatives on Indian stocks and expect to hit the market in the next six to 12 months. "We want to be the first to bring this out," said an official at Merrill in Mumbai.

The African Development Bank has drafted a proposal which would allow the bank's borrowers to use over-the-counter derivatives for the first time to hedge interest-rate, foreign exchange and commodity-linked risks. The bank has used derivatives for its own risk management for about a decade. This development, however, would facilitate the use of OTC derivatives by its lower-rated borrowers, according to Samuel Mivedor, financial analyst in the treasury department in Abidjan, Cote d' Ivoire. "We will be acting as an intermediary between these companies and the banks; all the clients that are eligible for borrowing will be eligible to use the risk management tools," he said.

Bank of America plans to hire three securitization structurers for its London-based European securitization team. The move is part of the bank's broader plans to hire more than 100 people in London to expand its European operations this year, according to officials familiar with the firm's plans.

Credit-default swap trading volume on Hong Kong telecom giant PCCW rocketed last week on the back of a five-year USD400 million convertible bond issue by PCCW's subsidiary PCCW Capital.Emmanuel Dianflon, Asia head of credit derivatives at BNP Paribas in Hong Kong, said that on Monday and Tuesday over USD70 million traded, whereas before the issue the typical volume was USD10-20 million a week.

Alan Lo, managing director and co-head of Asia Pacific (ex-Japan) equity derivatives at Deutsche Bank in Hong Kong, resigned last Monday. Lo, who was responsible for equity derivatives sales, structuring and marketing for Asia ex-Japan and Australia, declined all comment. Nick Fennell, managing director and co-head of equity derivatives (ex-Japan), who is responsible for the trading side, referred calls to the press office.

FundPartners is considering structuring the first guaranteed hedge fund in the Netherlands, which would likely use over-the-counter options for the underlying and the guarantee. Jurcell Virginia, head of alternative products in Laren, said the company is looking to launch the fund, which will aggregate a basket of low-volatility convertible arbitrage funds, to tap into the Dutch market's growing appetite for alternative investments. He declined to estimate how large the fund will be or discuss further details, given "at the moment we have no formal commitment to this, it's in the work-in-progress stage."

Credit-default protection on European heavyweight France Telecom widened about 10 basis points last week amid mounting concerns related to the incumbent's stakes outside its home turf that some investors fear could lead to higher debt burdens at the parent company. Five-year protection widened from 160-170bps at the start of the week to 180-190bps by the end of the week. At issue are its minority stakes in wireless providers MobilCom of Germany and NTL in the U.K. "France Telecom might have to guarantee MobilCom's debt and at the moment it really doesn't need any more debt," said one trader, adding, "NTL has had a huge build out [of its network] and there's a concern it could breach its covenants." He quipped, "they've spent a lot of money [sponsoring] the wrong football clubs as well," referring to the Aston Villa Football Club in England.

WestAM is planning to make its first investments in credit derivatives for its fixed income portfolio as part of a broader trend toward investing more of its EUR2.7 billion (USD2.4 billion) fixed-income portfolio in the credit markets. Nigel Jenkins, head of global fixed-income and currency in London, said 15-20% of those assets are in corporate bonds and predicted that figure will rise above 50% in the next few years as the proportion of government debt dwindles. "We will be managing more portfolios with credit benchmarks and there is a role for credit derivatives for efficient portfolio management," he said. However, he stressed the asset manager has not made any synthetic credit investments to date and said none are imminent.

The California Earthquake Authority is planning to issue a USD100-200 million catastrophe bond tied to earthquake risk. It will also be the first CAT bond it has issued in which it has not used a reinsurer. Market officials estimated this will save the authority USD5-6 million. A CAT bond analyst in New York said this is a natural progression for the authority as it has been issuing CAT bonds for some time and knows what to do. Tim Richison, cfo of the authority, referred calls to Stan Devereux, company spokesman. Devereux confirmed the plans. "We're looking to diversify our capacity to pay claims and we're exploring CAT bonds as a means of getting it done," he added, declining further comment.

Ward Ferry Management, a hedge fund in Hong Kong with over USD70 million in assets under management, is looking to increase its use of over-the-counter options by USD10-20 million (notional) in the next month as it sees strong investment opportunities in India. "We can't hold stock, we can only hold OTC options for that market," said Edgar Fok, analyst in Hong Kong, noting that as the fund does not have a securities license for India, it takes exposure via over-the-counter options. "We expect strong performance in this market," he said, adding that as the global technology sector rebounds, India, which is a major technology manufacturer, will benefit.