A benchmark gauge of U.S. company credit risk held little changed at almost a six-month low as Greece’s government made progress on measures to secure international aid.
The Markit CDX North America Investment Grade Index of credit-default swaps, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, decreased by 0.02 basis point to 94.9 basis points at 4:33 p.m. in New York, according to Markit Group Ltd. Swaps on Bristol- Myers Squibb Co., the drug maker, rose 0.8 basis point to 28.3, while those on Irvine, California-based homebuilder Standard Pacific Corp. fell 31.5 to 415, according to data provider CMA.
Greece and international creditors are working on the final draft of an agreement on budget and structural measures needed to free up a second aid package, a Greek official said. The index has declined as investors speculate on the likelihood that the country will be able to cut its debt burden, diminishing concern that Europe’s debt crisis may spread.
“Investors are once again in a holding pattern tied to Greece,” Adrian Miller, fixed-income strategist at GMP Securities LLC in New York, wrote in a report.
The swaps index, which typically falls as investor confidence improves and rises as it deteriorates, closed at 94.3 on Feb. 3, the lowest level since July.
Credit swaps pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a contract protecting $10 million of debt.
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