Bloomberg News

Asia-Pacific Bond Risk Falls, Credit-Default Swaps Prices Show

March 01, 2012

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

The Markit iTraxx Australia index decreased 5 basis points to 137 as of 11:17 a.m. in Sydney, Westpac Banking Corp. (WBC) prices show. That’s on course for its lowest since Aug. 5, according to data provider CMA.

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan declined 4 basis points to 157 as of 8:12 a.m. in Singapore, Royal Bank of Scotland Group Plc prices show. The gauge is headed for its lowest since Sept. 7, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.

The Markit iTraxx Japan index fell 1.5 basis points to 139 as of 9:10 a.m. in Tokyo, Deutsche Bank AG prices show. The index is approaching a six-month low of 137 basis points on Feb. 24, CMA data show.

The swap contracts pay the buyer face value in exchange for the underlying securities if a borrower fails to meet its debt agreements. A basis point is 0.01 percentage point.

To contact the reporter on this story: Yusuke Miyazawa in Tokyo at ymiyazawa3@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net


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