April 3 (Bloomberg) -- The cost of protecting debt sold by BHP Billiton Ltd. rose as much as 15 percent this week on concern the world’s largest mining company may be planning an acquisition after selling $6.3 billion of bonds.

Credit-default swaps on Melbourne-based BHP rose as much as 30 basis points to 230 this week and closed at 227 yesterday, according to Bloomberg data. They traded at 220 at 2:37 pm. Sydney time, according to Westpac Banking Corp. prices

Shares of Rio Tinto Group, the world’s third-largest mining company, Alcoa Inc. and Xstrata Plc have all risen this week on speculation they may be BHP targets. BHP may revive a failed takeover bid for Rio, thwarting a rival proposal from Aluminum Corp. of China, or Chinalco, Liberum Capital Ltd. said last week.

“There are reports that they may be having another tilt at Rio or going on the acquisition trail and that is putting pressure on CDS spreads,” said Ben Metcalfe, a credit trader with Royal Bank of Scotland Plc in Sydney. “They have done a reasonable amount of debt raising in the last couple of weeks.”

Samantha Evans, a Melbourne-based spokeswoman for BHP, declined to comment today on acquisitions.

BHP has been given approval from its biggest investors to pursue acquisitions, the Sunday Telegraph reported Mar. 29, citing some of the company’s 10 biggest shareholders. BHP may be interested in buying potash or petroleum assets, Merrill Lynch & Co. said last week.

Escondida Stake

BHP may have the opportunity to bid for Rio’s 30 percent stake in the Escondida copper mine in Chile should Chinalco’s planned investment fail, National Australia Bank Ltd. said last week in a report. Rio’s interest is valued at $6.8 billion under the Chinalco deal, though BHP was unlikely to bid that high, the report said.

Credit-default swaps, contracts conceived to protect bondholders against default, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a country or company fail to adhere to its debt agreements. A rise indicates deterioration in the perception of credit quality; a decline, the opposite.

A basis point on a credit-default swap contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year. A basis point is 0.01 percentage point.

To contact the reporter on this story: Rebecca Keenan in Melbourne at rkeenan5@bloomberg.net

Last Updated: April 3, 2009 01:11 EDT