Asia-Pacific Bond Risk Little Changed, Credit-Default Swaps Show
The cost of insuring Asia-Pacific corporate and sovereign bonds from default was little changed today, according to traders of credit-default swaps.
The Markit iTraxx Australia index was at 138 basis points as of 11:13 a.m. in Sydney, according to Westpac Banking Corp. The index closed at 137.3 basis points in New York yesterday, and has declined from 158.9 basis points this quarter, according to data provider CMA.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan held at 117 basis points as of 8:18 a.m. in Hong Kong, Credit Agricole SA prices show. The gauge has traded between 114.4 and 134.6 since Sept. 30, 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 was little changed at 201.5 basis points as of 9:25 a.m. in Tokyo, Citigroup Inc. prices show. It closed yesterday at 202.3, the highest since Nov. 1, CMA prices show.
The 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.
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