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Bahrain Arrangers Arab Banking Corporation, Bank of Tokyo-Mitsubishi, Citibank, Commerzbank, Gulf International Bank, National Bank of Abu Dhabi and National Bank of Kuwait signed banks into the $100m three year term loan for Bank of Bahrain Kuwait (BBK) yesterday (Thursday).

Crédit Agricole Indosuez is preparing to launch around Eu310m of notes backed by residential and commercial mortgages originated by five Italian co-operative banks. The deal is expected in mid to late September. Credico Finance, which combines mortgages originated by the Banche di Credito Cooperativo dell'Agro Bresciano, di Alba Langhe e Roero, di Orsago, di Roma and Romagna Est, will be the pilot transaction for a programme of securitisations organised by Iccrea Holding, the central advisory body to the over 500 small co-operative banks in Italy.

Württembergische Hypothekenbank, one of the five mortgage banking subsidiaries of HypoVereinsbank, this week launched a £630m synthetic securitisation of UK commercial mortgages. The deal follows a £1bn synthetic issue two weeks ago by fellow German mortgage bank Eurohypo, parcelling similar collateral.

The first week of September has seen a slow start in trading activity, as some dealers say investors are sitting on cash while deciding on new issue prospects. However, dealers say the climate is more optimistic and credits are better bid.

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CIBC World Markets is working to reestablish its credit derivatives structuring, marketing and trading presence. David Wagner, executive director of U.S. credit derivatives, said "this is a business that is simply crying out for further efforts from us. This will be a renewal of the credit derivatives business to complement CIBC's CDO and private placement work." CIBC plans to hire several professionals to staff the department, but Wagner declined to specify exact numbers.

Fears of a weakening dollar coupled with a plummeting Nikkei 225 continued to fuel a yen call buying spree last week. One-month Japanese yen/U.S. dollar implied volatility rose to 10.5% last Thursday from 9.75% a week earlier as demand for yen calls/dollar puts remained high. Japanese investment banks, corporations and life insurance companies were the most active buyers of the one-week yen calls/dollar puts. The one-month risk reversal also moved more in favor of yen calls as a result of option buying. In a typical trade players purchased yen calls/dollar puts struck around JPY117 when spot was trading around JPY120. Traders say that if the Nikkei continues to fall the trend of buying yen calls will continue because investors would look to move their assets into safer cash products.

Dresdner Kleinwort Wasserstein is structuring one of the first synthetic collateralized loan obligations to be based on a reference portfolio of high-yield loans. The USD1 billion CLO is due to hit the market early next month. Ebo Coleman, v.p. senior analyst in the structured finance group at Moody's Investors Service in London, said the agency has not rated any high-yield synthetic CDOs in Europe but is looking at several transactions and expects at least two to come to market before year-end. Officials at DrKW declined comment.

Louis Dreyfus Group plans to launch a weather derivatives trading desk in London before year-end. Kevin Green, director of weather risk in Wilton, Conn., said the desk will operate within the firm's agricultural derivatives division. Green said the firm is still assessing if it will need to make additional hires to man the desk. "Right now we're formulating our European strategy. It shouldn't be that long before we begin trading," he said. The London desk is likely to mirror the U.S. operation, primarily focusing on customer business with a limited role as a market maker. Dreyfus has an extensive energy and agricultural client base from which to draw for weather trades, Green said. Robert Schut, who works in Dreyfus' London agricultural derivatives group, has been working closely with Green to research setting up the weather desk and is likely to take on a managerial position on the new desk, Green said. Schut declined comment.

London Electricity plans to start using weather derivatives before year-end to hedge its exposure to gas and electricity prices. Jack Watkins, energy trader in London, said "It would be foolish not to [hedge exposure to the weather]." The company has been looking at hedging for five years but has not entered weather contracts yet because the market was too illiquid. London Electricity has decided to make the plunge this winter because of increased liquidity in plain-vanilla options and the increasing number of bespoke products.