Credit mixed as deals emerge ahead of slowdown

NEW YORK, Aug 20 (IFR) - JPMorgan and AIG led five new issuers jumping into the US high-grade market on Monday morning, with the deals defying anticipation of a late-summer slowdown as we get into the dog days of August ahead of the Labor Day holiday. Issuers may be looking to get business done before any bad news emerges later this week in Europe, where Greece is expected to ask for a two-year extension to meet its budget and reform commitments.

At mid-morning, the broader credit indices are mixed to start the week. The CDX IG18 is at 99.25, roughly 0.75bp tighter than Friday's close, while the CDX HY18 is at 98.43, about half a point weaker. Treasury yields are up again, with the 10yr UST yield up 4.2bp at 1.856%.

Greece's prime minister will meet with European leaders this week, but could run into opposition from Germany on again reworking the terms and schedule of the country's fiscal reform. German Finance Minister Wolfgang Schaeuble said on Saturday: "It is not responsible to throw money into a bottomless pit… We cannot create yet another new program."

Along with AIG and JPMorgan, Laboratory Corp of America Holdings came to market today, announcing a benchmark SEC-registered 5s/10s 2-part deal, for pricing later in the day. Domtar Corp and Unum Group also announced new deals.

marc.carnegie@thomsonreuters.com