Oct. 25 (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 5 basis points to 177 basis points as of 11:38 a.m. in Sydney, Credit Agricole CIB prices show. A close of 177 would be the lowest since Sept. 16 while a decline of 5 basis points would be the most since Oct. 21, according to data provider CMA.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan slid 5 basis points to 197 as of 8:35 a.m. in Singapore, Royal Bank of Scotland Group Plc prices show. A close of 197 would be the lowest since Sept. 19, CMA data show.
The Markit iTraxx Japan index fell 4 basis points to 189.5 as of 9:38 a.m. in Tokyo, Citigroup Inc. 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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