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J.P. Morgan Chase plans to storm into a top three position in Asian equity market league tables within the next three years and hopes to differentiate itself by promoting innovative structures, such as equity-linked products, equity derivatives and credit derivatives. Michiel Steenman, Hong Kong-based head of equity capital markets for Asia Pacific, acknowledged the firm is bulking up late in the game, but added that Chinese deals are expected to account for a large portion of new Asian business.

LG Capital, a Korean credit card and financing firm, is considering issuing a cross-border asset-backed security and likely will enter a swap to convert the proceeds back into Korean won, according to an official at the firm in Seoul. LG is talking with several investment banks about the ABS issue, he said, declining to name them.

Lehman Brothers in New York has hiredMichael Ladas, v.p., strategic equity transactions at Deutsche Bank in New York, as v.p., senior corporate equity derivatives marketer. Ladas is responsible for marketing equity derivative products to corporate clients in the U.S. and replaces Paul Rosica, who recently transferred to Lehman's telecom equity capital markets group. Russell Hackmann, senior v.p., head of corporate equity derivatives in New York, said Lehman conducted a standard interview process to find Rosica's replacement, and Ladas "was the best qualified to help grow our corporate equity derivatives business." Ladas was unavailable for comment.

The Korean National Pension Corp., with over KRW60 trillion (USD46 billion) in assets, will soon start using derivatives, beginning with currency and interest-rate swaps. Chang Kil Hoon, head of the investment strategy group in Seoul, said the Korean government last year passed a law that will allow the public pension scheme to begin using derivative products in July. It plans to use swaps to hedge interest rate and currency exposure on its portfolio of non-won denominated bonds issued by Korean corporates.

Harley Bassman, managing director on Merrill Lynch's over-the-counter debt options desk in New York and a 16-year veteran of the firm's fixed-income options trading area, has been named head of the real estate structured finance department. Bassman said he takes responsibility for North American CMBS, MBS and ABS trading and sales efforts and has replaced Greg Odland, whose new brief has yet to be determined. Both Odland and Bassman declined comment on the reason for the reshuffle. Bassman reports to Tom Likovich, head of debt markets trading and sales for North America.

The weather derivatives industry is one of the most rapidly growing fields of risk management today. Such instruments, whose underlyings are functions of temperature and other weather variables, enable purchasers to manage the volumetric risks associated with warmer or colder-than-average weather. The great power of weather derivatives lies in their potential for diversifying weather-related risks across the entire economic spectrum, not just between energy producers and consumers. Indeed, the range of industries susceptible to adverse weather is large, including amusement parks, beverage companies, winter apparel manufacturers, retailers, restaurants, resorts, golf courses and agricultural companies.

On the view that interest rates will rise toward year-end, Mellon Private Asset Management is buying longer maturity corporate bonds in anticipation of spreads tightening on the long end of the curve, says John Poole, portfolio manager in Boston. The overall strategy complies with his goal of staying neutral his benchmark's duration, in anticipation of a greater steepening of the curve. He also says that he has been buying shorter term ABS and MBS with the same thought in mind.

Rullison & Co. will rotate 10% of its portfolio from investment grade into high-yield corporate bonds over the next six weeks, says Christopher Hayes, portfolio manager with the asset management firm in Rochester, N.Y. The manager--who favors a value investing style--believes a lot of high-yield paper has suffered due to the telecom crisis, adding to the spread-widening between investment-grade and junk bonds, and creating a lot of good buying opportunities in the lower credit range.

McGlinn Capital Management, a money manager based in Reading, Pa., is considering adding roughly $50-100 million in 15-year mortgages, and another $50-100 million in high-rated junk credits. J.P. Weaver, who manages just under $1 billion in taxable fixed income assets, plans to make the move within the next few weeks. He says he'll sell Treasuries and possibly some agencies to fund the move, though he won't specify maturities or what type of agencies. He is duration neutral to his three Lehman Brothers benchmark indices, and says he will remain neutral for now.Weaver likes 15-year MBS because it has lagged 30-year paper, and he expects bank demand for 15-year paper to pick up to reflect Federal Reserve easing. Banks tend to invest in 15-year MBS in an easing environment because it fits their liability profile, he explains.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

Up-front fees for pro rata tranches declined slightly to 4.7 basis points per one million dollars committed for April 2001 while institutional up-front fees remained steady at 3.1 basis points. According to Portfolio Management Data, fees on pro rata tranches for the three months ending April 2000 were 2.9 basis points and were 2.2 basis points for institutional pieces last year.