Bloomberg News

Asia-Pacific Bond Risk Rises, Credit-Default Swap Prices Show

April 15, 2012

The cost of insuring Asia-Pacific corporate and sovereign bonds from non-payment increased, according to traders of credit-default swaps.

The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan advanced 6 basis points to 170 as of 8:26 a.m. in Hong Kong, Royal Bank of Scotland Group Plc prices show. The gauge is on course for its highest close since Feb. 2, according to data provider CMA.

The Markit iTraxx Australia index climbed 8 basis points to 159.5 as of 10:07 a.m. in Sydney, Westpac Banking Corp. (WBC) prices show. The benchmark is set for its highest close since Jan. 30, 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 rose 5 basis points to 174 as of 9:20 a.m. in Tokyo, Deutsche Bank AG prices show. The measure is poised for its highest close since Jan. 20, according to CMA prices.

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. A basis point is 0.01 percentage point.

To contact the reporter on this story: Taejin Park in Seoul at

To contact the editor responsible for this story: Shelley Smith at

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