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CDC Ixis Asset Management plans to launch by the end of June two convertible arbitrage funds that will use derivatives. Dahlia Marteau, head of alternative fund management in Paris, said the funds will use equity, interest-rate and credit derivatives. One fund is expected to be approximately EUR500 million (USD440 million), and the other, EUR100 million.

Bank One plans to hire a fixed-income derivatives marketer to financial institutions. The bank recently hired two fixed-income derivatives marketers in new positions in Chicago. Fred Smithson, former v.p., fixed-income derivatives marketing at J.P. Morgan in New York, has joined as director, fixed-income derivatives marketer to financial institutions, and Jim Hargrove, associate, municipal derivatives sales origination at First Union in Charlotte, N.C., has joined as director, fixed-income derivatives marketing for tax-exempt institutions, said Matt Bayles, managing director, fixed-income derivatives marketing at Bank One in Chicago. He declined to elaborate on the planned hire.

Banc Of America Securities has started offering equity derivatives research to institutional clients. Although BofA's sales force has always generated trading ideas for clients, it is generating formal equity derivatives research to meet client demand for regular written reports, said Chris Innes, managing director, global head of marketing for equity financial products in New York. The bank mainly gives clients specific trading ideas, rather than top-down market analysis, in the reports.

Credit Suisse First Bostonis recommending a trade in which investors can take advantage of the wide differential between Nasdaq 100 and S&P 500 longer-dated implied volatilities.

Deutsche Bank is pitching to customers a relative value credit default swap trade designed to profit from Tyco International's planned acquisition of the CIT Group, as well as changing technicals on Tyco. Last Wednesday, two-year credit default protection on Tyco was trading at around 110 basis points, while two-year CIT floating rate bonds were priced at LIBOR plus 45bps. These numbers should in theory be closer together following the merger. By selling the CIT floating-rate notes and selling two-year protection on Tyco, the investor can profit from the convergence of these levels, said Nichol Bakalar, v.p. credit derivatives research in New York.

End users are getting set to increase their credit lines with Dresdner Kleinwort Wasserstein once Allianz completes its acquisition of Dresdner Bank. Following the acquisition, credit rating agencies are likely to upgrade Dresdner. An official in the treasury department of Finnish energy company Fortum said the upgrade means the company should be able to increase its credit lines for derivatives products to the German bank by approximately 20%. Marcus Fedder, treasurer at the European Bank for Reconstruction and Development in London, expects to be able to boost its derivatives business with Dresdner as well.

DWS Investment, a mutual fund manager owned by Deutsche Bank, is buying a series of equity call options to help structure two guaranteed five-year funds it launched last week. Markus Klingler, fund manager in Luxembourg, said he is buying five-year call options on the Dow Jones Stoxx 50 for one fund and a five year basket call on the Stoxx 50, the Standard & Poor's 500, and the Nikkei 225 for the other. The two funds should total about EUR200 million (USD176 million), he added. About 15% of the investor's investment goes toward buying options that provide market exposure, while the balance goes toward buying bonds that provide the capital guarantee.

Carl Stewart, head of European marketing and structuring in London at RBS Financial Markets, has joined General Re Securities in the same role. He covers all derivatives asset classes, said Kevin Lecocq, managing director and global head of marketing and structuring. Stewart, who joined two weeks ago and reports to Lecocq, declined to comment.

Levels for five-year protection on International Paper tightened early last week, despite the company's announcement on March 29 that first quarter earnings would be lower than previously projected.