Bond Risk in Asia Increases After Two-Day Drop, Swap Prices Show

The cost of insuring corporate and sovereign bonds in the Asia-Pacific region against non-payment rose, according to traders of credit-default swaps.

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan climbed 1 basis point to 149.5 basis points as of 8:04 a.m. in Hong Kong, Australia & New Zealand Banking Group Ltd. prices show. The gauge had fallen for the two previous days, according to data provider CMA.

The Markit iTraxx Australia index added 1 basis point to 120 as of 10:02 a.m. in Sydney, according to Westpac Banking Corp. prices. The benchmark is poised for a 3 basis-point increase this week, according to data from CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the private market.

The Markit iTraxx Japan index was little changed at 92 basis points as of 9:06 a.m. in Tokyo, according to Citigroup Inc. prices. The gauge last rose on Sept. 24, CMA data show.

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.

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