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Asia-Pacific Corporate Bond Risk Declines to Lowest in More Than Two Weeks
Source: bloomberg.com
Source Date: Thursday, July 08, 2010
Focus: Citizen Engagement, Internet Governance
Created: Jul 12, 2010

Business ExchangeTwitterDeliciousDiggFacebookLinkedInNewsvinePropellerYahoo! BuzzPrint The cost of protecting Asia-Pacific bonds from default fell to the lowest in more than two weeks, according to traders of credit-default swaps.

The Markit iTraxx Asia index of swaps on 50 investment- grade borrowers outside Japan dropped 4 basis points to 127 basis points as of 8:09 a.m. in Hong Kong, according to Credit Agricole CIB. That’s the lowest since June 22, according to CMA DataVision in New York.

The Markit iTraxx Australia index decreased 6 basis points to 122.5 basis points as of 9:45 a.m. in Sydney, also to the lowest in more than two weeks, according to Nomura Holdings Inc. and CMA data. The Markit iTraxx Japan index fell 5 basis points to 127 basis points as of 8:49 a.m. in Tokyo, the least since June 22, Morgan Stanley and CMA prices show.

Credit-default swap indexes are benchmarks for protecting bonds against default and traders use them to speculate on credit quality. An increase suggests deteriorating perceptions of credit quality and a drop shows improvement.

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.

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