The cost of insuring corporate bonds and sovereign bonds from non-payment in the Asia-Pacific region declined, according to traders of credit-default swaps.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan fell 3 basis points to 100 basis points as of 8:55 a.m. in Hong Kong, according to Australia & New Zealand Banking Group Ltd. prices. The measure is set for its lowest close since Jan. 2011, according to data provider CMA.
The Markit iTraxx Japan index retreated 3 basis points to 102.3 as of 9:11 a.m. in Tokyo, Citigroup Inc. prices show. The benchmark is falling for a ninth straight day and heading for its lowest level since March 2011, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.
The Markit iTraxx Australia index dropped 3 basis points to 106 as of 11:32 a.m. in Sydney, according to Westpac Banking Corp. prices. The gauge is on course for its lowest close since May 2011, CMA data show.
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.
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