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Polish Oil and Gas Co. (PGNiG) has entered into a cross-currency interest-rate swap on the back of a recent EUR800 million (USD716 million) fixed-rate bond offering, Poland's largest ever corporate issue. Wojciech Szelagowski, deputy director of the economic department in Warsaw, said the company has agreed to enter the swap with ABN AMRO, which led the bond offering. He declined to say how much of the principal of the bond it will convert. An interest-rate derivatives official at ABN AMRO declined to comment on the transaction.

State Street Global Advisors, which manages USD25 billion in global fixed-income and cash from its London office, is planning to use over-the-counter and exchange-traded interest-rate options and options on bond futures for the first time as part of its global fixed-income portfolio management strategy, according to DW sister publication BondWeek. Vincent Kok, head of global fixed income, said the firm decided to start using options as an asset class to garner extra returns beyond its benchmarks as well as to get away from pure market directional investing and to mitigate volatility. Kok said SSgA's U.S.-based managers already use options and now this practice is being expanded globally.

The Spanish treasury is considering becoming an active end user of interest-rate swaps to shorten the duration of its outstanding debt and plans to start reviewing dealers' proposals in the coming months. Carlos San Basilio, deputy director for public debt at the Ministerio de Economía in Madrid, said the sovereign has been getting its accounting and legal teams up to speed on the use of swaps. "We are going to become more active whenever there is a possibility and banks will know they can call us," he said.

The European Investment Bank, a multinational lender with a EUR215 billion (USD192 billion) loan portfolio, is considering using credit derivatives for the first time as a means of hedging its credit risks next year. Officials at the EIB in Luxembourg said the lender is currently conducting an internal review on the credit derivatives market and is weighing whether it makes sense to use products such as single-name default swaps to mitigate risk. "Credit [derivatives] would be a completely new field for us," said Luis Pacheco, an official in the credit-risk department in Luxembourg, noting the bank has used foreign exchange swaps in the past on the back of its bond offerings but has not used any derivatives on its loan portfolio.

Taipei-based Dah An Commercial Bank recently entered a TWD1 billion (USD29 million) three-year interest-rate swap as a partial hedge for its TWD5 billion fixed-rate car loan portfolio. It is considering entering further swaps next year to convert its entire fixed rate loan portfolio into a synthetic floating-rate asset as interest rate hikes are expected in 2002, when Taiwan's economy is tipped to recover, according to Darren Chiu, fixed income trader at the bank in Taipei. In the recent swap Dah An pays a fixed rate of 2.85% and receives the floating 90-day commercial paper rate, which was at 2.5% last Monday.

UBS Warburg is looking to hire a London-based negotiator for its derivatives contracts with counterparties in Europe, the Middle East and Africa. An official in the credit risk management documentation group in London said the role would involve tailoring separate master agreements that the firm agrees with each of its counterparties, within International Swaps and Derivatives Association guidelines.

Joe Hegener, managing director and global head of non-investment grade credit derivatives and collateralized debt obligation business at TD Securities in New York, has been promoted to head investment banking and securities in the U.S. His promotion is part of an ongoing integration project by the firm that entails joining its products groups with its corporate financing business, Hegener said. Hegener has replaced Gordon Paris, who left the firm last month, according to a company official, who declined further comment. Hegener reports to John MacIntyre, global head of investment banking and Mike MacBain, head of global debt capital markets.

Virgin Atlantic is looking to hire a derivatives-savvy group treasurer. The second-largest U.K. airline plans to hire a treasurer to manage, among other duties, the airline's foreign exchange and interest-rate exposure. The hire would be a replacement for Andrew Avann, group treasurer, who recently left Virgin, according to Reiner Siebert, manager of insurance and risk management in Crawley, U.K. Siebert declined comment on where Avann has gone.

Winterthur Investment Management Corp., a New York-based firm managing $2.2 billion in assets in a number of subsidiaries for the Swiss insurer, is seeking to add at least $100 million in triple-B rated corporates. The firm's president, Reto Koller, says it wants to take advantage of the wide spreads available in new issues with a triple-B rating in cyclical industries such as oil, basic industries and consumer cyclicals. He says such issues are currently available at wide spreads due to the "war economy." He cites J.P. Morgan Securities research showing that spreads on auto parts companies' bonds were out 92 basis points as of Nov. 2, since Sept. 11. Spreads on automotive companies' issues are out 85 basis points during the same time frame, while paper and forest products are out 66 basis points.

Lombard Odier is shortening the duration of European government bonds in its £2.5 billion global fixed-income portfolio, 80% of which is government bonds, and has just begun to sell off positions in five- to seven-year German and French government bonds. London-based Steven Murphy, senior investment analyst, says the firm will add to its positions in 30-year Spanish and Italian government paper to capitalise on their relative cheapness versus German bunds, but will maintain the majority of the portfolio in cash, thereby keeping duration short. Italian and Spanish 30-years were trading at about 20 basis points over 30-year bunds recently, but have since gapped out to 35-40 basis points over. Once there is a sustained recovery in the global equity markets, which Murphy considers to be the leading indicator of an economic recovery, the firm plans to buy in the three- to five-year range across the board in Europe's so-called core markets.

Bidding at last week's benefit auction (see story, page 2) got competitive as the night wore on, with charitable party-goers vying for one unusual item: lasik surgery. At one point, a specs-wearing dealer with his eye on the prize asked that all other vision-impaired party-goers "just clear the room." Then, as the stakes got higher, he offered to go Dutch with a fellow bidder. "What's your top price?" he asked. "I'll go $1,000. If we win, we'll each get one eye done."