Oct. 13 (Bloomberg) -- The cost of insuring Asia-Pacific corporate and sovereign bonds against non-payment decreased, according to credit-default swap traders.
The Markit iTraxx Australia index dropped 11 basis points to 196 basis points as of 11:35 a.m. in Sydney, Westpac Banking Corp. prices show. A close of 196 would be the lowest since Oct. 12 while a decline of 11 basis points would be the most since Oct. 5, according to data provider CMA.
The Markit iTraxx Japan index fell 7 basis points to 193.5 as of 9:24 a.m. in Tokyo, Citigroup Inc. prices show. A close of 193.5 would be the lowest since Sept. 21, CMA data show.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan slid 6 basis points to 207.5 basis points as of 8:34 a.m. in Singapore, Royal Bank of Scotland Group Plc 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.
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