BoI, Temasek to join iTraxx Asia Index

Bank of India and Temasek Holdings Pte, Singapore's state-owned investment company, are among 22 companies joining the iTraxx Asia ex-Japan Index of credit- default swaps as it expands to 70 members.

The index, a benchmark for the cost of protecting bonds sold by Asian companies from default, is increasing from 50 companies and will start trading on Sept. 20, according to the International Index Co. in Frankfurt. New benchmarks are created every six months when firms are added or dropped depending on ratings or how actively they are traded.

Temasek has top AAA credit ratings from Standard & Poor's while Bank of India is ranked BBB-, the lowest investment-grade rating.

A high-yield index of credit-default swaps on 20 companies with sub-investment grade credit ratings will also be traded.

Two members in the Series 7 Index "" Citic Pacific Ltd. and Towngas China, formerly known as Panva Gas Holdings Ltd., will not be in the new benchmark.

Credit-default swaps are contracts based on bonds and loans that are used to speculate on a company's ability to repay debt.

Contracts on the iTraxx Asia Ex-Japan Series 7 Index of 50 borrowers, including the Chinese and Thai governments, fell 4 basis points to 82 basis points in Hong Kong today, according to Barclays Capital.

A basis point on a credit-default swap contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year.

The International Index Co. is a joint venture of banks including JPMorgan Chase & Co., Barclays Capital and Frankfurt- based Deutsche Boerse AG.