Bond Risk in Asia Decreases for First Time in Almost a Week

The cost of insuring corporate and sovereign bonds in the Asia-Pacific region against non-payment fell, according to traders of credit-default swaps.

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan dropped 3 basis points to 151 basis points as of 8:35 a.m. in Hong Kong, Australia & New Zealand Banking Group Ltd. (ANZ) prices show. The benchmark last declined on Sept. 19, according to data provider CMA.

The Markit iTraxx Australia index slid 1 basis point to 118 as of 10:22 a.m. in Sydney, according to National Australia Bank Ltd. prices. The gauge is set to snap three consecutive days of increases, according to data from CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the private market.

The Markit iTraxx Japan index dropped 1 basis point to 90.75 basis points as of 9:37 a.m. in Tokyo, according to Citigroup Inc. prices. The measure is also poised for its first decline since Sept. 19, CMA data show.

Credit-default swap indexes are benchmarks for insuring bonds against default and traders use them to speculate on credit quality. A drop signals improving perceptions of creditworthiness, while an increase suggests the opposite.

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

To contact the reporter on this story: Benjamin Purvis in Sydney at bpurvis@bloomberg.net

To contact the editor responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net

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