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Australian companies' capital management has come along in leaps and bounds. The humble bean counter is fading into the past, as more and more financial officers take their place on boards of directors. Fiona Haddock talks to two of the country's top financial chiefs to see just what fiscal management means to them and the companies they represent.

Korea is under the spotlight in Asia's asset-backed securities market. Last month saw a series of ground-breaking deals. But can the momentum be sustained? Fiona Haddock reports.

Entergy-Koch Trading plans this week to launch what it considers to be the first indices on wind power and will offer derivatives based on them to wind-power generators in Europe and the U.S. The indices will measure the deviation in wind strength from normal levels in parts of Europe and the U.S., including northern Germany, Denmark and Texas, according to David Pethick, senior quantitative analyst in London.

Auto credits are on the brain this week, with dealers saying one name has dropped and another has gotten a boost. Exide Technologies' bank debt has reportedly traded down to the high 60s from the mid-70s range. However, one dealer speculates that the credit has just been quoted down and has not actually traded. Amounts could not be determined. The company manufactures car batteries. Tenneco Automotive's debt traded up slightly to 74 on an announcement from the company this week of long-term strategies to minimize the hit to the auto sector.

Harris Nesbitt is ramping up its asset-based lending capabilities by extending its branch network with the opening of an office in Los Angeles and is eyeing offices in New York and Boston. Kevin Delaplane, senior v.p., and managing director, said the asset-based lending operation is a national business and Harris wants to put people on the ground, to supplement relationships. "This is a growth business for Harris, with 20-30% expansion in the last two years," Delaplane added, noting Harris expects to continue at this level of increase, though he could not provide figures for a balance sheet increase. There is no timeframe for the further roll out and no specific numbers for the amount of people targeted, he said. Offices have also been opened in Detroit and Atlanta, as part of the national rollout program.

UBS Warburg has set a bank meeting tentatively for Nov. 8, backing Investcorp's buyout of Schlumberger's water-meter business, and will be bringing $190 million of loans to the market, comprising a $30 million revolver and $160 million in term loans. A banker familiar with the situation said J.P. Morgan was also considered by Investcorp to lead the financing, but would not provide the loan on such favorable terms in the current tough market. UBS bankers declined to comment. Calls to a J.P. Morgan spokesman were not returned. Investcorp officials in New York referred questions to officials in the London office, who could not be reached.

Barclays Capital is recommending clients buy receiver swaptions because it does not think the Federal Reserve will tighten monetary policy as quickly as the forward curve implies. Brad Stone, head of U.S. fixed-income marketing and derivatives strategy in New York, said the trade is based on his assumption that while the recent flattening of the yield curve will reverse over the short-term, he expects a "bull flattener" starting late in the fourth quarter. "We see the pullback in short swap rates as an opportunity to put on carry trades in the short-end of the swap curve. A carry trade is a trade that is based on the belief that rates and the curve are not likely to change, Stone said. "Where the rates are going to be in six months is similar to where they are today," he predicted.

Credit derivatives traders have started to quote the price of protection on low-credit quality names in terms of an up-front premium rather than a spread over LIBOR for the term of the contract because of deteriorating credit quality. This is preferable to the sellers of protection because if the credit defaults early in the contract the seller has already pocketed the premium, according to Cameron Munro, European head of credit trading at National Australia Bank in London. Munro added, "What's the point of getting a 1,000 basis points if you are only getting it for a week?"

Deutsche Bank has hired Steve Beck, executive v.p. at Vertical Crossing, a structured products broker, in New York, to sell mortgage derivatives, according Jon Kinol, managing director of North American over-the-counter derivatives in New York. Beck was hired as a director to fill a new position on the cross-rates sales team. He starts Monday and will report toMal Brooks, head of cross-rate sales in New York. Deutsche Bank launched the cross-rates desk in late August (DW, 8/26). The desk trades and sells packages of risks made up of swaps, mortgages, agencies and government bonds.

One-month 25-delta U.S. dollar/Japanese yen risk reversals flipped to favor dollar calls/yen puts last week after traders bought dollar calls as their confidence increased that global equity markets would settle at levels higher than pre-Sept. 11. "It's a sentiment trade, a story the market wanted to believe," said a trader in London. Risk reversals flipped to 0.3 vol in favor of dollar calls/yen puts Thursday from 0.3 vol in favor of dollar puts at the beginning of the week. Risk reversals had been as high as 2.2 vol for yen calls in late September.

Dresdner Kleinwort Wasserstein has hired Marco Riccardulli, senior swaps trader at Commerzbank in New York, in a similar position, according to Vincent Parisot, head of fixed-income trading at DrKW in New York. Parisot said Riccardulli is filling a new position that was created as part of Dresdner's plans to grow its swaps trading team. He declined to specify an exact number of new hires the firm is planning, but said more traders would be brought in as demand for interest-rate products continued to grow. Riccardulli joined the firm at the beginning of the month. He reports to Parisot.