Asia-Pacific Bond Risk Little Changed, Credit-Default Swaps Show

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

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan was little changed at 135 basis points as of 9:05 a.m. in Hong Kong, Australia & New Zealand Banking Group Ltd. prices show. The benchmark is set to have fallen 21.4 basis points this month, according to data provider CMA.

The Markit iTraxx Australia index was also little changed at 106 basis points as of 11:12 a.m. in Sydney, National Australia Bank Ltd. prices show. The measure, which has ranged from 96.1 to 149.5 this year, is poised to have dropped 19.2 basis points since Sept. 30, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the private market.

The Markit iTraxx Japan index was unchanged at 86 basis points as of 9:11 a.m. in Tokyo, according to Citigroup Inc. prices. The gauge, which retreated to a four-week low on Oct. 21, is on track to have declined 11.3 basis points this month, 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: Foster Wong in Hong Kong at fwong94@bloomberg.net

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

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