A benchmark gauge of U.S. company credit risk declined for a third week, reaching the lowest level since August, amid optimism Greece was making progress in debt- restructuring talks with bondholders.

The Markit CDX North America Investment Grade Index, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, decreased 0.7 basis point to a mid-price of 100.5 basis points as of 4:31 p.m. in New York, according to Markit Group Ltd. For the week, the measure is down 5.6 basis points. Credit-default swaps tied to Transocean Ltd. (RIG) fell to the lowest level in almost three months.

The gauge declined after Greek Finance Minister Evangelos Venizelos said the government was “one step away” from completing talks on a voluntary debt swap and was negotiating with international creditors on the terms for a second financing package at the same time. The index, which has decreased from 120 on Jan. 6, typically declines as investor confidence improves and rises as it deteriorates.

Credit-default 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.

The U.S. two-year interest-rate swap spread, a measure of stress in credit markets, climbed 0.64 basis point to 32.45 basis points. The measure falls when investors favor assets such as corporate bonds and rises when they seek the perceived safety of government securities.

Default swaps on Transocean, owner of the Gulf of Mexico drilling rig that exploded and sank in 2010, dropped to the lowest since Nov. 3 after a judge ruled that BP Plc can’t collect from Transocean part of the $40 billion in cleanup costs and economic losses related to the Macondo oil spill.

The contracts declined 32.1 basis points to 251.1 basis points, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.

The sinking of Transocean’s Deepwater Horizon drilling rig and spill led to hundreds of lawsuits against BP, its partners and contractors. BP sued Transocean in April to recover a share of its damages and cost from the spill.

Contracts tied to Eastman Chemical Co. (EMN) rose, adding 18.8 basis points to 98.5 after the biggest U.S. producer of chemicals from coal agreed to buy Solutia Inc. for about $3.38 billion to expand in materials for tires and add films used to make iPads and skyscraper windows. The contracts earlier reached 108, the highest this year.

To contact the reporter on this story: Mary Childs in New York at mchilds5@bloomberg.net

(Blomberg)