The cost of insuring corporate and sovereign bonds in the Asia-Pacific region against non-payment rose, according to credit-default swap traders.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan gained 5 basis points to 166 basis points as of 8:21 a.m. in Singapore, according to Royal Bank of Scotland Group Plc prices. The benchmark surged 29.5 yesterday, the most since September 2011, according to data provider CMA.
The Markit iTraxx Australia index jumped 10 basis points to 147.5 as of 10:23 a.m. in Sydney, according to National Australia Bank Ltd. prices. The measure is on track for its highest close since Nov. 16, after jumping 15.2 basis points yesterday. That was the sharpest rise since March 20, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.
The Markit iTraxx Japan index increased 8 basis points to 123.5 as of 9:22 a.m. in Tokyo, Citigroup Inc. prices show. The gauge is set for its biggest daily advance since June 13 and for its highest close since March, CMA prices 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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