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Salomon Smith Barney has created a global interest-rate and derivatives products group to put trading under the same roof as structuring to enable the departments to leverage off each other.

The Clinton Group, a macro hedge fund based in New York, is shopping a collateralized bond obligation based on an underlying reference pool of credit default swaps and expects to come to market with the 144a deal late next month. The approximately USD500 million deal is based on a reference pool of some USD2 billion in default protection, according to officials in New York who had seen preliminary offering documentation. Officials at The Clinton Group declined comment.

Industrial gas company BOC Group is setting up a series of risk management workshops to educate its senior management about how to control risk. The workshops might open the door to the use of new products, such as weather derivatives, according to Bill Connell, director of risk management in Windlesham, U.K.

Virgin Atlantic is looking at using interest-rate and foreign exchange derivatives for the first time, and is also setting up an in-house risk management center to advise heads of departments how to control business risks. Virgin has decided to systematically manage these risks because as the airline has grown, they have become more significant, said Reiner Siebert, manager of insurance and risk management. Virgin Atlantic's revenue in 1999 was GBP1.067 billion (USD1.554 billion).

Traders bought two-month double no-touch options on the Japanese yen/U.S. dollar pairing early last week, said a trader in Tokyo. Betting that the yen would stay range-bound, the binaries have ceilings at JPY116 and floors at JPY125, he noted. Some traders bought one- to two-month dollar calls struck at JPY121 with knockouts at JPY116, he said. One-month options volatility hovered around 13%, relatively unchanged from the week before.

One-year credit default protection levels on the Republic of Turkey fell to 370 basis points/420bps on Thursday from 525bps/625bps the week before. A London-based trader said it was the first time investors entered the market since the Turkish crisis late last year. Interest came from private clients and was split between selling protection and buying credit-linked notes. In the credit-linked notes, the issuing banks sold protection to hedge the credit exposure embedded in the notes. Investors were buying short-end protection because this is the first part of the curve to regain liquidity after a crisis--it is seen as the least risky.

Michael Stewart, a marketer in interest-rate derivatives at BNP Paribas in New York, has taken the new position of director-corporate interest-rate derivatives marketing at Westdeutsche Landesbank Girozentrale in New York. The position was added because the bank has extra business in the area now. The Financial Accounting Standards Board's Statement Number 133 has spurred corporates to re-examine their hedging activity, and WestLB has particular expertise in that arena, according to David Kwun, executive director and head of corporate derivatives sales. Stewart, who reports to Kwun, declined comment.

ABN AMRO Bank in the next several months is moving a team of about four traders covering U.S. equity derivatives to New York from London. The move is designed to combine the trading group with a marketing team already in the U.S. Having traders on the ground makes working with marketers easier logistically, and brings them closer to the market and market information, said Eelco Rooimans, global head of equity derivatives trading in London.

AMP Shopping Centre Trust, an Australian property trust with some AUD1 billion (USD556.1 million) in assets, this month entered a fixed-to-floating interest-rate swap on a AUD50 million four-year fungible bond. It entered the swap to retain a balance of fixed- and floating-rates in its debt portfolio, said Michelle MacPherson, treasury manager for listed trusts at AMP in Sydney, noting that AMP prefers to pay fixed on 60-80% of its various property trusts' debt and floating on the rest. AMP Shopping Centre Trust has just over AUD300 million in debt, she said, declining to break down the maturities and interest rates on that debt or the size of the trust's derivatives book.

Activity in the European credit default swap market surged last week, notably in telecom names as market participants awaited a EUR4 billion (USD3.699 billion) convertible bond issue this week from France Telecom. Contrary to expectations, five-year credit default swap prices on the name actually fell from 160 basis points to 135bps because of a surfeit of sellers, said traders.

One-month euro/U.S. dollar implied vol surged upward last week to around 14% from a low the previous week of 12.75% as the euro showed signs of losing footing against the dollar in the spot market. The euro drifted downward from its high early this month of around USD0.95, hitting USD0.9220 toward the end of the day Wednesday.