Asia-Pacific Bond Risk Rises, Credit-Default Swap Prices Show

The cost of insuring Asia-Pacific corporate and sovereign bonds from default increased, according to traders of credit-default swaps.

The Markit iTraxx Australia index advanced 4 basis points to 151 basis points as of 11:45 a.m. in Sydney, Credit Agricole SA prices show. The gauge is set for its highest close since Jan. 31, according to data provider CMA.

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan climbed 4 basis points to 170 as of 8:45 a.m. in Hong Kong, Credit Agricole prices show. The index is headed for its highest close since Feb. 2, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.

The Markit iTraxx Japan index rose 3.5 basis points to 146 basis points as of 9:21 a.m. in Tokyo, Citigroup Inc. prices show.

Credit-default swap indexes are benchmarks for protecting 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. A basis point is 0.01 percentage point.

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