Jan. 30 (Bloomberg) -- The cost of insuring Asia-Pacific corporate and sovereign bonds against non-payment rose, according to traders of credit-default swaps.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan climbed one basis point to 110 basis points as of 8:05 a.m. in Hong Kong, Royal Bank of Scotland Group Plc prices show. The gauge is set for the highest close since Jan. 16, according to data provider CMA.
The Markit iTraxx Australia index advanced one basis point to 117.5 as of 11:05 a.m. in Sydney, according to Westpac Banking Corp. prices. The benchmark is poised for the highest close since Jan. 1, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.
The Markit iTraxx Japan index climbed 0.5 to 134.5 as of 9:15 a.m. in Tokyo, according to Citigroup Inc. prices. The measure has fallen from 159 basis points at the end of 2012, according to CMA.
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: Jun Yang in Hong Kong at firstname.lastname@example.org
To contact the editor responsible for this story: Shelley Smith at email@example.com