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BNP Paribas has hired a pair of credit derivatives professionals from Societe Generale in Tokyo. Vincent Boyer, credit derivatives trader, and Go Yajima, a credit structurer, will report to Stefane Delacote, head of credit derivatives in BNP's Tokyo office. Delacote said he plans to make additional hires. "We want to build up the team; covering high-grade, high-yield and exotic Japanese credits." He added that demand in Japan is growing from both portfolio managers looking to hedge their books as well as from local investors hungry for credit risk. Boyer and Yajima could not be reached for comment.

Credit derivatives traders turned their attention to Railtrack last week as shares in the U.K. rail network manager plummeted. The credit default swap spread for five-year protection blew out to 65 basis points/75 basis Wednesday from 45bps/55bps Monday. Anjan Malik, v.p. structured credit trading at Lehman Brothers in London, said "The market does not believe Railtrack can default, it is too strategic an asset." He added, "If this was in the U.S. it would be trading at 300bps or 400bps."

Deutsche Bank has boosted its credit derivatives effort with hires in trading and structuring. Aelisa Kim Cipriani, director in the CDO team at Morgan Stanley in London, started Monday as a director in collateralized debt obligation structuring, according to Jeffrey D'Suza, head of European collateralized debt obligation business in London. This is a new position, he said, adding the department is growing in response to increased demand for structured products. Deutsche Bank also transferred Michael Furtado, a lawyer in the firm's legal department, to the CDO team. Furtado said he will focus on the execution and structuring of CDOs.

Fitch has hired Charles Hand, associate in the synthetic CDO arbitrage group at J.P. Morgan in New York, as an analyst focusing on synthetic CDOs in London. Mitchell Lench, senior director international structured finance in London, said Fitch expanded the department because the rated credit derivatives business--in particular the CDO arbitrage market--is growing. This appointment takes the headcount in the London CDO team to 10. Hands, who starts today, could not be reached. Calls to J.P. Morgan were not returned.

HSBC recently entered what is believed to be the longest-dated rupee interest-rate swap, and the transaction could open the way for further deals. Tarun Mahrotoi, treasurer in Mumbai, said HSBC entered a INR250 million (USD5.3 million) swap with a local manufacturing firm looking to diversify its liability portfolio. In the swap the corporate receives a floating rate based on the yield of one-year Government of India bonds, which is annually reset. At present the yield to maturity is 8.44%. Mahrotoi declined to name the corporate.

Foreign exchange traders were last week piling into the market to hedge short exposure to a USD2 billion (notional) one-month dollar call struck at USD121.30 that matures Thursday. The buyer of the call, believed to be Goldman Sachs, wins if spot trades past the strike. This looked increasingly likely Friday as the yen swooned to USD120.70, leading banks to firm up their hedges. Officials at Goldman Sachs declined comment.

Air Products & Chemicals will likely consider issuing commercial paper or a medium-term fixed-rate bond that it can convert to a floating-rate liability via a swap, according to Greg Weigard, assistant treasurer in Allentown, Pa. The international industrial gas and chemical company is looking to increase its percentage of floating-rate debt to 40-45% from approximately 25%, he said. It is looking to refinance $100 million of A3/A-rated bonds that mature in August.

KBC Bank & Insurance has set up an alternative investment company and plans to launch a convertible arbitrage fund next month as its inaugural product.

Hana Bank is looking to increase its use of structured products, including credit-linked notes and convertible asset swaps to boost margins. Tae Young Li, general manager in Seoul, said the bank recently entered a USD20 million (notional) interest-rate swap with Credit Suisse First Boston on the back of a Korean convertible bond it purchased.

Bayerische Landesbank plans to securitize between EUR1-2 billion (USD850 million-USD1.7 billion) of its commercial mortgage portfolio using derivatives and is currently looking for an investment bank to lead manage and structure the deal. Klaus Distler, first v.p. and head of securitization in Munich, said Bayerische is preparing this deal to reduce regulatory capital and remove assets from its balance sheet. It has opted for a synthetic transaction because it is cheaper and quicker than a cash deal.