Search results for

Teck Yong, head of fx cash and derivatives sales at Royal Bank of Scotland in Singapore, has resigned. Traders believe Yong will take a month off before resurfacing at another firm in the Lion City. At RBS Yong reported to Simon Chan, head of fx in Singapore. Chan was traveling and could not be reached for comment. Yong could not be reached. An RBS currency trader said the firm plans to hire a replacement for Yong.

Credit default protection pricing on Japanese banking group Sanwa whipsawed last week following the firm's issuance of a USD2 billion 10-year bond, according to credit traders in Tokyo. Five-year credit default mid-market swap spreads blew out from some 40 basis points when the bond was issued to 55bps, then tightened to 47bps last Thursday. "Sanwa's the story of the week," noted one trader in Tokyo. Sanwa is rated A3 by Moody's Investors Service.

Swiss Re New Markets is expected to bring additional liquidity to the bankruptcy swaps market following its recent decision to start offering bankruptcy swaps to U.S. corporates. A spokeswoman at Enron, previously the only player in the bankruptcy swaps, said the company welcomes the move.

This article will discuss how to customize standard International Swaps and Derivatives Association documentation for special purpose, bankruptcy remote vehicles (SPVs) that issue rated securities. An SPV is often formed by the entity (the sponsor) structuring a securitization or other structured financing. In a securitization, a pool of assets is transferred to the SPV and the SPV issues rated securities backed by such assets. There are a variety of reasons a sponsor will form an SPV (e.g., off balance sheet financing or regulatory capital relief). Rating agencies often require that assets be transferred into the SPV so that the credit and bankruptcy risk of the assets will be separate from the credit and bankruptcy risk of the sponsor. Often derivatives are used in order to achieve a particular risk profile. These derivatives are typically governed by ISDA documentation.

Taiwan's Eva Air is planning to enter interest-rate swaps in which it pays fixed if Taiwan's central bank cuts rates again later this month. Philip Chan, junior v.p., finance in Taipei, said the airline wants to hedge floating interest-rate exposure on its loan portfolio. Some 70% of Eva Air's loan portfolio is floating rate, he added, declining to reveal the size of the portfolio. Eva primarily deals with J.P. Morgan Chase, Goldman Sachs and Morgan Stanley.

Swaps traders last week put some EUR8 billion (USD6.8 billion) notional through the euro interest-rate swaps market in anticipation of the spread between corporate and government bonds widening. The heaviest action revolved around going long Euro-BOBL or Bund futures and paying fixed in five or 10-year swaps, according to Peter Hartmann, director and swaps trader at Dresdner Kleinwort Wasserstein in Frankfurt.

The World Bank and International Finance Corp. are jointly planning to facilitate a market for weather derivatives. Ulrich Hess, economist at the IFC in Washington, said the development of a liquid weather derivative market led the two institutions to dust off an earlier study by the International Food Policy Research Institute, which showed such coverage would promote economic stability. Panos Varangis, senior economist at the World Bank, said back dated analysis shows revenue from cereal crops in Morocco would have been 30% more stable between 1979-99 if local farmers had used weather derivatives. The first transaction is expected to close in Morocco next spring.

Linda Patterson, portfolio manager with Patterson & Associates in Austin, TX, plans to increase the firm's allocation to agencies to 80% of its portfolio, or by about $35 million, providing that agency spreads versus comparable treasuries widen by an additional five to 10 basis points.

Nelson Capital Management is seeking to increase its duration via the purchase of longer maturity corporate bonds, on the view that the already-steep curve is likely to flatten, says portfolio manager Melissa Parker. Parker also notes that another reason for the move is to reach neutrality with the Lehman Brothers Inter Government credit index, as the firm is currently slightly short its benchmark. She plans to execute the shift by moving long the curve from a current five- to seven-year average maturity range to a 10-year range.

The market pounding telecom companies have taken over the past two weeks conjured up some not so fond memories. One dealer recalled the stock market crash of 1987 and looking out of his Boston office and into the 35th floor of the Fidelity Investments building in Boston. "It was a very sobering day," he said. "I could see people lining up to redeem their mutual funds." Another just remembers being in the office and swearing a lot.

Bank meetings will be held this week in New York and Chicago for a $625 million credit for Toledo, Ohio-based Libbey. Ken Wilkes, v.p., cfo for the glass tableware manufacturer, said the loan will fund the acquisition of the Anchor Hocking consumer and specialty glass business of Newell Rubbermaid and refinance Libbey's existing debt. Leads Bank of America, Bank One and Bear Stearns will hold meetings in New York tomorrow and Thursday in Chicago.