Sept. 30 (Bloomberg) -- The cost of insuring Asia-Pacific corporate and sovereign bonds against non-payment fell, according to credit-default swap traders.
The Markit iTraxx Japan index dropped 8 basis points to 198.5 basis points as of 9:25 a.m. in Tokyo, Citigroup Inc. prices show. A decline of 8 basis points would be the most since Sept. 16, while a close of 198.5 would be the lowest since Sept. 21, according to data provider CMA.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan decreased 6 basis points to 232 as of 8:26 a.m. in Singapore, Royal Bank of Scotland Group Plc prices show. The Markit iTraxx Australia index fell 4 basis points to 210 basis points as of 10:22 a.m. in Sydney, Westpac Banking Corp. prices show.
Credit-default swap 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.
--Editor: Beth Thomas
To contact the reporter on this story: Katrina Nicholas in Singapore at firstname.lastname@example.org
To contact the editor responsible for this story: Shelley Smith at email@example.com