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Long Island Power Authority is looking to enter an interest-rate swap to convert a $100 million fixed-rate bond it issued last week into a synthetic floater in order to better balance its debt portfolio and cuts its cost of funds. Lehman Brothers, which underwrote the bond deal, also will act as swap counterparty.

Credit Lyonnais is beefing up its interest-rate derivatives desk in Taiwan and as part of the effort has just brought aboard Max Shyu, head of interest-rate derivative trading at HSBC in Taipei, according to Frederic Laine, head of Asia derivative products at CL in Hong Kong. Shyu joins as head of interest-rate derivatives trading-Taipei, replacing Vincent Lien, who moved to Standard Chartered in Taipei earlier this year. Shyu, who could not be reached, reports to Rosy Tsorng, treasurer in Taipei, and to Laine in Hong Kong.

Taipei-basedBank SinoPac is hoping to become the first domestic firm to offer equity index options, and down the line, equity swaps. The bank is applying to Taiwan's central bank, the Central Bank of China in Taipei, for approval, according to Henry Chang, head derivatives dealer. SinoPac plans to target its private banking customers who are looking for exposure to other markets via stock indices including the Nikkei 225 and NASDAQ Stock Market.

Madrid-based Beta Capital MeesPierson, a wholly owned subsidiary of Fortis Bank, is considering applying for a bank licence, a move that would allow the firm to expand the range of derivatives-based products it offers. If the investment house becomes the Spanish branch of Fortis Bank it would be able to offer banking products, such as guaranteed funds, in its own name, according to an official in Madrid. At present Beta Capital structures products, such as reverse convertibles, but has to issue these under a third party's name, since under Spanish law investment houses are not permitted to offer banking products.

SG, the investment banking division of Societe Generale, has promoted a team of European fixed income cash and derivatives sales professionals marketing to banks and institutional investors. The move follows the recent departure of Mark Goldman, managing director and head of fixed income cash and derivative sales for Europe ex-France, who has joined BNP Paribas in London as European head of bond sales. Goldman could not be reached.

Spreads on five-year credit default protection on Computer Associates International continued to widen last week due to the fallout over the company's May 4 announcement that a typographical error had caused it to overstate its annual earnings on operations. Greg Rosen, director, credit derivatives trader at Credit Suisse First Boston in New York, said on Wednesday that spread levels on five-year protection had been trading about 30 basis points wider over the course of the week, and that spreads were hovering at about 190/210 bp. Another credit derivatives trader in New York said that the spreads had been trading wider because investors continue to be concerned about Computer Associate's "aggressive" accounting.

Seeing evidence of a decline in the market for 10-year U.S. Treasury notes ten days ago, R. Medder & Associates, a money manager in Dublin, Ohio, moved $60 million 10-years into T-bills, according to portfolio manager Joe Zarr. Zarr, who runs $420 million in taxable fixed-income, says the investment in T-bills is a temporary measure to guard against principal devaluation while yields on the 10-year are up. He will watch for a variety of indicators, but particularly a turnaround in 90-, 150-, and 200-day moving averages for the 10-year, before buying back the $60 million (and perhaps eventually another $60 million).

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.

On the view that the Federal Reserve will consider at least another 25 basis points worth of rate reductions, C.S. McKee & Co. will put in place a barbell strategy by moving 10% of the portfolio from intermediate to long-end positions. Bryan Johanson, portfolio manager, is seeking to capture the drop in rates and also plans on swapping out of his TIPS into treasuries.

American Century Investment is considering rotating approximately $75 million from CMBS to home equity loan (HEL) ABS, says portfolio manager Greg Gahagan. He points to the relative stability of HEL prepayment speeds and the widening of HEL ABS spreads as the main basis for this move.

A $5 million piece of 360networks bank debt took a 10-point fall early last week and traded into the 43-44 range after the company announced its earnings had been slashed. Credit Suisse First Boston was rumored to be the seller and Bear Stearns was said to have bought the piece, although dealers at both banks would not comment. One trader called the initial drop in levels a result of a "panick sale," but adds they've since rebounded to the 44-46 range. Dealers agree that the telecommunications company is still struggling in a saturated market. The company is an international fiber optic cable provider based in Vancouver, British Columbia. Calls to the company were not returned by press time.