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J.P. Morgan Chase is looking for lenders to round out the syndicate on a $500 million credit line for AvalonBay Communities. The bank, along with administrative agent FleetBoston Financial, is holding a bank meeting in New York today. The three-year loan refinances a $600 million credit facility. The facility is priced at LIBOR plus 3/4 %, which matches pricing on the previous line. Up-front fees could not be determined, one banker said, adding that the banks may wait to gauge the response to the deal before setting the fees. Calls to J.P. Morgan Chase were referred to a spokeswoman, who did not return calls.

Tower credits are said to be weathering the economy well. Crown Castle's bank debt is trading at 100 3/4, while American Tower's "B" tranche traded up slightly over par. A piece of Graham Packaging's bank debt traded up two points to 95, while Gaylord Containers traded up to 95. For news on Owens Illinois and Winstar Communications see related stories on on the site.

Scotia Capital is preparing to become a credit derivatives market maker in European names in London. Matt Giffen, director, credit derivatives sales at Bank of Nova Scotia in London, said the bank's investment banking division will soon start making markets in investment grade single-name credit default swaps, total return swaps and first-to-default baskets.

The Chicago Board of Trade is rumored to be gearing up to negotiate out of its alliance with Eurex, the Swiss-German exchange, say CBOT insiders. Ahead of its meeting with Eurex in Germany on April 25, it is unclear whether the CBOT is trying to work its way out of part of the contract or divorce itself entirely from the deal. "Both Eurex and the CBOT are unhappy with the current contract, and I know the CBOT is looking for a way to get out," one CBOT insider told DW sister publication Wall Street Letter. A spokeswoman for the CBOT said, "We are happy with the volume on [alliance trading platform] a/c/e and we look forward to working with Eurex officials to come up with a future agenda that is in the best interest of both exchanges and their customers."

Adriano Cantreva, a marketer at Credit Suisse First Boston, has taken the position of credit derivatives marketer at Commerzbank Securities in New York. He will focus on covering hedge funds, according to a spokesman.

Icelandair has entered a call spread to hedge until June against the price of gas oil rising. Sveinbjorn Indridason, director of treasury in Reykjavik, said the airline bought an over-the-counter call option struck at USD220 and sold a call at USD240. Both options were for 6,000 tons of gas oil. The net premium on the trade was approximately USD6 per ton. Gas oil was trading at USD210 when it entered the trade.

Adrian Hyde, former managing director and co-head of credit derivatives trading at Chase Securities, has taken the new position of managing director, credit derivatives trading at TD Securities (USA) in New York. He has been brought on board mainly to expand the existing high-yield credit derivatives business at TD, according to an official at TD in New York. The group aims to leverage off TD's high-yield bond and leveraged loan platform, he added. Hyde declined to comment.

The International Finance Corporation is likely going to increase its use of fixed income derivatives because it is ramping up its securitization activity. Arun Sherma, head of structured finance at the IFC, said the IFC uses fixed income derivative products such as interest-rate swaps, currency swaps and basis swaps to help structure securitizations, and that, with the increase in securitizations, there will probably also be an increase in hedging with derivatives.

European equity investors last week sold short-dated single-stock and index puts to earn premium, believing that the market is about to turn a corner. Rachid Bouzouba, head of world book trading and exotics for equity derivatives at Credit Lyonnais in London, said investors have been heartened by the rising U.S. equity markets, adding that his technical analysis shows the Nasdaq's rally last week is not just a short-term blip.

Some hedgers opted to buy one to three month Mexican peso puts against the U.S. dollar last week as implied volatility declined significantly from the previous week. Hedgers took the short view that the Mexican peso might decline against the dollar in coming weeks since the U.S. markets appeared to be rebounding.

Credit default swap spreads on Motorola blew out last week after the company last week reported its first quarterly loss in some 15 years. Five-year protection on the telecom company traded at 465bps on Wednesday, while it had previously traded between 100-250bps, according to a trader in London. Traders in New York and London said volumes in the credit picked up as players who had bought protection at lower levels locked in profits and investors who had sold the default swap hedged further losses. The average notional value of the trades was USD10 million.