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

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

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan dropped 4 basis points to 169 basis points as of 8:25 a.m. in Hong Kong, Credit Agricole SA prices show. The gauge has traded in a 132.5 basis-point to 209 basis-point range this year, according to data provider CMA.

The Markit iTraxx Australia index fell 4 basis points to 164 as of 10:25 a.m. in Sydney, Credit Agricole prices show. The index has risen from its low for the year at 128.2 on March 19, 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 was unchanged at 192 basis points as of 9:21 a.m. in Tokyo, according to Deutsche Bank AG prices. The measure has risen 56 basis points since March 19, when it fell to its lowest for the year at 136.2, CMA 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.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE