Asia-Pacific Bond Risk Benchmarks Fall, Credit-Default Swap Prices Show

The cost of protecting Asia-Pacific corporate and sovereign bonds from non-payment fell, according to traders of credit-default swaps.

The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan dropped 4 basis points to 121 basis points as of 8:23 a.m. in Hong Kong, Credit Agricole CIB prices show. The Markit iTraxx Australia index declined 3 basis points to 116.5 basis points as of 9:46 a.m. in Sydney, according to Nomura Holdings Inc. prices.

The Markit iTraxx Japan index fell 3.5 basis points to 104 basis points as of 9:32 a.m. in Tokyo, according to Deutsche Bank AG. A basis point is 0.01 percentage point.

Credit-default swap indexes are benchmarks for protecting debt against default and traders use them to speculate on credit quality. An increase suggests deteriorating perceptions of creditworthiness and a drop shows improvement.

The swaps pay the buyer face value in exchange for the securities if a borrower fails to meet its debt agreements.

To contact the reporter for this story: Shelley Smith in Hong Kong at ssmith118@bloomberg.net

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