Dec. 24 (Bloomberg) -- The cost of insuring corporate bonds in Australia from non-payment increased, according to traders of credit-default swaps.
The Markit iTraxx Australia index climbed 1 basis point to 123.5 basis points as of 11:32 a.m. in Sydney, according to Westpac Banking Corp. The index has fallen 6.7 basis points this month, according to data provider CMA.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan was quoted at about 111 basis points as of 8:46 a.m. in Hong Kong, according to Royal Bank of Scotland Group Plc. The gauge closed at 110 basis points on Dec. 21, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market. The index is little changed from the end of last month.
Markets in Japan are closed for a national holiday.
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. A basis point is 0.01 percentage point.
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