Aussie Banks Seem Sweeter to Bond Investors Even as Loans Sour
- Bank credit default swaps decline to least since January
- Market undeterred by increased impairments reported this month
Passersby are reflected in the window of the Sydney Stock Exchange showing the benchmark S&P/ASX200 index in Sydney on September 18, 2015. Australian stocks slipped 0.28 percent at the open after the US Federal Reserve left interest rates near zero overnight. AFP PHOTO / Peter PARKS (Photo credit should read PETER PARKS/AFP/Getty Images)
Photographer: Peter Parks/AFP via Getty ImagesDebt investors are taking rising bad loans at Australia’s major banks in their stride, with the cost to insure their bonds falling to an almost four-month low.
Credit default swaps for the country’s four biggest lenders fell to 97 basis points on average on Thursday, a level unseen since Jan. 25, according to data compiled by Bloomberg. The premium over similar U.S. bank instruments also shrank to just 20 basis points from as much as 50 in February.