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KPMG is looking to hire three derivatives-conversant consultants to join its corporate treasury services practice in London. Dominic Bennett, senior manager in the corporate treasury services practice in London, said the individuals will advise U.K.-based treasurers on risk management techniques. He added the recruits "need to be knowledgeable about risk management but they don't need to be rocket scientists." This is because corporate treasurers are looking for simple solutions, such as options or forwards, rather than exotic products that are hard to understand and may bring accounting complications if they cannot be easily marked to market.

Lehman Brothers has hired three senior interest-rate derivatives marketers and an options trader from J.P. Morgan in New York. The quartet is the latest in a wave of interest-rate derivatives bankers who have resigned from J.P. Morgan and Chase Manhattan since the two firm's merger and following bonus payouts last month (DW, 2/5, 2/12).

Five-year credit protection on Lucent Technologies traded steadily higher last week on the back of its credit rating being downgraded and concerns about the company paying dearly when rolling over bank borrowings. Reports of a Securities and Exchange Commission probe into accounting practices at the firm also may have spurred activity, although Lucent issued a press release noting that it had itself flagged these issues with the SEC late last year.

Marten Touw, head of global markets, North East Asia at Standard Chartered Bank in Hong Kong, resigned last week and will join Japan's Shinsei Bank, formerly known as Long-Term Credit Bank of Japan. Touw said he will take a new position at Shinsei, declining to provide details. At Standard Chartered his responsibilities included oversight of the firm's North East Asian derivatives business across all asset classes.

Lehman Brothers is recommending clients enter a four-month zero-cost risk reversal in euro against the U.S. dollar. In the trade clients sell a European-style euro put/dollar call struck at USD0.8640 and buy a European-style euro call/dollar put struck at USD0.958. These strikes were quoted when spot was trading at USD0.9085 on Thursday.

Swiss Re New Markets is planning to offer insurance-related products for the CO2 market, but has elected for now not to trade CO2 emissions credits because there is insufficient liquidity in the instruments. The firm will revisit the topic after the United Nations Framework Convention on Climate Change Conference of the Parties in June, which is expected to clear up ambiguity surrounding the market, according to Chris Walker, associate director in Zurich. In July the firm started a feasibility study regarding trading emissions credits (DW, 7/24).

Rayner Associates is buying select secondary corporate credits on the view that their spreads are still lagging the primary market in reacting to the Federal Reserve rate cuts, with investors able to pick up an additional 20-30 extra basis points, according toArno Rayner, chairman. The firm, which manages $150 million in taxable fixed income, is using new money and cash earned from dividends and interest to buy single-A rated or better bonds with durations of eight to 13 years.

Manning & Napier Advisors, Inc. is selling Treasuries to purchase high-quality corporates it expects to weather the slowing economy, along with agencies, whose current spreads are wide on a historical basis. George Nobilski, president of the firm's fixed-income division, which runs $3 billion in taxable bonds, says his recent purchases include the 10-year paper of Corning (A2/A) and Pepsico (A1/A), whose respective spreads over Treasuries are 150 and 125 basis points, and five-year Diageo Plc (A1/A+), at 150 over."The names we're buying are on the conservative side," he says. "We're starting to pick and poke at some of those values."

Source: Thomson Financial/Securities Data. For more information, call Rich Petersonat (973) 645-9701.

Meridian Management is using new cash and the sale of some Treasuries and agencies to capture spreads on investment-grade corporates that are at historical wides. Pat Moon, a managing principal for $100 million in taxable-fixed income, says the last 18 months have provided a unique opportunity to buy corporates that have undergone spread-widening amid concern about slower economic growth. He recently purchased several million dollars of Baa3/BBB rated Dana Corp.'s 63/4% notes of 3/1/04, whose wide spread, currently about 580 basis points over comparable Treasuries, Moon attributes to wider concern about a downturn in the auto parts industry and their exposure to liability for using asbestos in some of their brake pads. "Our feeling is their exposure is minimal," he adds.

Lyon Street Advisors has sold about $200 million worth of investment-grade corporates over the past six weeks to buy agencies and Treasuries, thereby locking in the profits from the January rally. Mitchell Stapley, who manages $2 billion for the Grand Rapids, Mich.-based firm sold its lower rated investment-grade paper, but is still overweight after adding corporates in November and December. Stapley sold PotashCorp 71Ž8% notes of '07 (Baa2/BBB), Citibank 75Ž8% notes of '36 (Aa2/AA-), and Ford 7.45% notes of '31 (A2/A), and bought the safer Treasuries and bullet agencies with durations of seven to 10 years.

Laurent Gauthier, former MBS analyst with the recently shuttered fixed income unit of Prudential Securities in New York, has joined Banc of America Securities in New York. He describes his new position as an " all-around MBS strategist," where he will concentrate on the pass-through and CMO markets. He will report to Sharad Chaudhary, the residential MBS research chief who is based out of Charlotte. Chaudhary says he is replacing former prepayment modeler Warren Xia, who recently left the firm. At Prudential, Gauthier reported to MBS research head Inna Koren. Prior to that, Gauthier was an MBS analyst at Goldman Sachs.