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Despite its relatively modest size, the Netherlands has been at the vanguard of change in the era of the single European currency. Dutch companies, long established in the international arena, have been quick to venture overseas for funding, as have previously domestically oriented institutions. Philip Moore reports on how, by listening to investors and venturing into new markets, issuers from the Netherlands have been persuading an increasing number of investors to go Dutch.

Abbey National Financial Products has entered a 10-year USD1.5 billion (notional) credit-default swap with a special purpose vehicle sponsored by Abbey National. The SPV, named Marylebone Road CBO 2, entered the swap as part of a synthetic collateralized debt obligation it issued recently. The CDO was brought to market by Bear Stearns.

ABN AMRO in Mumbai recently completed a rupee-denominated interest-rate swap with the Industrial Development Bank of India (IDBI). With a maturity of seven years, the deal is believed to be the longest dated swap so far transacted in the local market, said Rohit Malhotra, assistant v.p., derivatives marketing at ABN AMRO in Mumbai.

Citibank believes the Norwegian kroner has upside potential against the euro and is pitching an options strategy to take advantage of the view.

American Express is preparing to launch a pair of hedge funds--with a total target size of USD1.5 billion--that will make heavy use of derivatives. Scott Nelson, alternative investment funds manager in Minneapolis, said it plans a European equity long/short market neutral and a high-yield distressed debt arbitrage fund. The high-yield fund will have a bias toward the U.S. but a global mandate. "The use of derivatives [will be] extensive." The funds will use derivatives, such as longer-dated puts and calls, to manage the risk/return profile. Nelson declined comment on the timing of the move.

Credit Suisse First Boston in Singapore has just brought aboard Jeremy Brest, head of North Asia technology research at Nomura in Seoul, as a regional markets derivatives structurer. Brest reports to Carl Bautista, director and head of structuring in Singapore. Bautista could not be reached. Brest declined to comment on the move.

Dresdner Kleinwort Wasserstein is bolstering its equity derivatives operation in Asia with the launch of a desk in Hong Kong and new hires in Tokyo. The firm will initially focus on issuing and trading local warrants but plans to expand into all other equity derivative products.

Dutch information services company, Wolters Kluwer, is considering selling the embedded call option in a EUR225 million (USD200 million) perpetual bond it issued last week and enter an interest-rate swap to convert the fixed-rate bond into a synthetic floater.George Dessing, group treasurer in Amsterdam, said it might sell the call to shave 20-30 basis points off its all-in cost of funding.

Edward Yao, principal, equity derivatives trader at Morgan Stanley in Hong Kong, has left the firm. Traders in Hong Kong believe Yao is moving to a local hedge fund. He reported to Stevan Vrcelj, head of derivatives, at Morgan Stanley's Hong Kong office. Vrcelj commented that the bank does not intend to find a replacement but has restructured the trading desk, bringing traders in from the region, declining further comment. Yao could not be reached.

Speculation about the likely size of the next U.S. interest rate cut ahead of the Federal Open Market Committee meeting on May 15 saw a surge in Mexican peso/U.S. dollar options activity last week. James Kennan, v.p., Latin American currency options trading at BNP Paribas in New York, said the FOMC might cut rates by as much as 50 basis points. An easing of this magnitude is expected to see further peso appreciation in the spot market.