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Société Générale has put all new equity derivatives products on hold while it re-evaluates the situation in the aftermath of last week's terrorist attacks, according to Dan Fields, managing director of equity derivatives in Sydney.

Like the rest of the world's bond markets, the asset backed market halted abruptly after the terrorist attacks on New York and Washington on Tuesday. In the US, the safety of missing family and friends and the suffering of the bereaved were uppermost in everyone's thoughts.

* Rabobank on Monday launched a Eu210m issuance from Colonnade Securities BV, the club funding vehicle for local social housing institutions in the Netherlands. The vehicle was set up by ING Barings-BBL in 1998 to give housing associations an alternative to the Dutch private placement market. Proceeds are transferred to the borrowers as loans matching the 10 year fixed rate bullet bonds.

The Korea Deposit Insurance Corp successfully launched its first securitisation on Monday afternoon in New York. The $278m deal, wrapped by triple-A rated monoline insurer Ambac, was the fruit of 10 months' work by joint bookrunners Credit Suisse First Boston (CSFB) and SG, and by their domestic arranger partners Daewoo Securities and Hyundai Securities.

Interest-rate derivatives market makers expect a surge in demand from Danish pension funds looking to receive fixed in derivatives to hedge fixed-rate guaranteed annuity liabilities as regulators force funds to examine the issue. They also predict the trend will spread across Europe. One estimated there is still EUR30-40 billion (USD27-36 billion) of business to execute, with approximately EUR10 billion executed since July.

ABN AMRO in London has launched a group that will cater to ultra high-net-worth clients seeking to diversify their portfolios through the use of derivatives, risk arbitrage and private equity investments, according to a company official. "The group will do everything that involves investing assets and making more out of it," a company official said. Jan Ebel Bos, managing director of marketing in the global equity derivatives group, and Eelco Rooimans, global head of equity derivatives trading in London, are the co-heads of the new group, called the global wealth structuring and advisory group. Bos and Rooimans declined to comment.

John Lima, a U.S. dollar spot and options trader for Deutsche Bank in London, has moved to the firm's New York office to trade short-dated options. Lima's move is part of the bank's effort to consolidate its short-dated options trading into one book. The new book combines the old risk books of mortgage options, Treasury options, agency options and shorter-dated (less than six months) swaptions, according to Kinol. He expects the aggregation of risks to pump up liquidity and reduce risks by netting positions against each other. Lima will be replaced internally, according to Kinol.

Export Development Corp., a state-owned company that provides insurance, financing and guarantees to Canadian exporters, recently entered into a CAD500 million (USD300 million) cross-currency interest-rate swap on the back of a bond issue of the same size. Chad Buffel, portfolio manager, said the maturity on the swap is 10 years, matching the maturity on the bond. In the swap EDC pays a sub six-month U.S. dollar-LIBOR rate and receives a rate equal to the 5.75% coupon on the bond. EDC opted to borrow in Canadian dollars because a Canadian investor wanted paper denominated in that currency. It entered a swap to hedge the foreign exchange risk because 90% of its assets are in U.S. dollars. The move also allowed EDC to fund the deal at a price that was more attractive than borrowing in U.S. dollars. EDC is paying a floating rate as a way to match the floating assets with liabilities. The counterparty in the swap was an undisclosed Canadian investment bank. Buffel noted, however, that EDC only deals with counterparties with a rating above double A.

Barclays Capital plans to hire an agencies strategist for its New York-based derivatives operation. It expects to have the position filled by early next year, said Brad Stone, head of U.S. fixed income marketing and derivatives strategy. It is a new position being created to meet the burgeoning U.S. agencies market, which Stone noted is increasingly becoming a large part of the U.S. high-grade market. He said the agencies business has nearly doubled over the last four years. "We feel it will require a full-time strategist," he added.

Deutsche Bank has hired Robert Grillo, a managing director who traded liquid mortgage-backed securities and derivatives at New York-based hedge fund CDC Investment Management, to man its cross-rate desk in New York. Grillo, who started at Deutsche Bank last week, reports jointly to Jon Kinol, managing director of North American over-the-counter derivatives in New York and Thomas Paul, managing director and head of government bond trading. "Rob brings us a different skill set coming from the buyside. He has a strong expertise in mortgages and the hedging of mortgages with OTC products" Kinol said.

Foreign exchange options traders piled into euro/dollar risk reversals last week to profit from euro/dollar movement. In the risk reversals the traders sold 25-delta one-month euro calls/dollar puts and bought euro puts/dollar calls causing the risk reversal to move to 0.35 vol in favor of euro calls on Thursday from one vol Monday. The strikes on the calls were around USD0.90 and the strikes on the puts were USD0.865 when spot was trading USD0.8952 on Thursday. A trader added several hundred million dollars in one-month twenty-delta euro puts went through the broker market on Monday.

Ten-year credit default swaps on major corporates have started trading in the Japanese interbank market in the last few weeks. "A few selected Japanese investors decided to extend their investment horizons to get higher yields," said Ralph Orciuoli, managing director in structured credit products at Bank of America in Tokyo. NEC, Sony, Fujitsu, Toshiba and Toyota were among the names traded. Ten-year credit protection on Sony traded in the low 80 basis points, which is double the five-year price. Before the last few weeks a handful of 10-year prices had been quoted but this last burst of activity represents the beginning of a market, according to traders.