Issuance volume this month is gaining distance from the year-ago pace, as borrowers continue to focus funding on longer-dated issues.

New high-grade deals in the market today represent $1.75 billion of new supply, raising the August-to-date total above $48 billion, or already $2 billion more than was priced over all of August 2011, according to LCD data. The increase in monthly volume comes after July issuance of nearly $62 billion dwarfed issuance of less than $50 billion over the year-ago period.

Laboratory Corporation of America Holdings launched $1 billion in two evenly split tranches backing the repayment of revolver borrowings and a February 2013 debt maturity, at T+145 for new five-year notes, and at T+195 for new 10-year notes. Talk came at the tight end of guidance and points to reoffers in the areas of 2.24% and 3.75%, respectively, or well below coupon rates of 3.125% for the 2016 notes and 4.625% for the 2020 notes when the company last tapped the markets in November 2010.

While syndicate officials have reported higher new-issue concessions in recent sessions after heavy summer supply and as liquidity conditions moderate, those outstanding issues recently traded at G-Spreads similar to toady’s talk levels, or 140 bps for the 2016 issue and 205 bps for the 2020 issue, according to MarketAxess.

Burlington, N.C.-based Laboratory Corp. operates independent clinical laboratories, offering a range of testing services.

On Friday, Moody’s raised the outlook on its Baa2 rating to positive, from stable, reflecting its “expectation that leverage will remain moderate and that the company will continue to see modest growth and stable cash flow even though the operating environment remains challenging.”

Bookrunners for today’s offering, with an expected BBB+/Baa2 profile, are BAML and Credit Suisse. The issues carry make-whole call provisions, and the 10-year issue is also callable at par from three months prior to maturity.

Also following a credit-rating upgrade last week, disability-insurance provider Unum Group floated guidance in the T+300 area, plus or minus 12.5 bps, for $250 million of 30-year senior notes to back general corporate purposes, sources said. The narrow end of guidance points to a reoffer in the 4.79% area.

Active bookrunners for the offering, with an expected BBB-/Baa2 profile and the first for the company in nearly two years, are Morgan Stanley and J.P. Morgan, along with passive bookrunners Barclays and Deutsche Bank. The issue carries a make-whole call provision.

On Thursday, Moody’s raised ratings one notch to Baa2 with a stable outlook, citing a stronger credit profile in recent years and stable core earnings amid a soft economy, bolstered by “improved business diversification and financial flexibility.”

Domtar Corp. launched a $250 million, SEC-registered offering of 30-year notes at the firm end of T+337.5-350 guidance, sources said. Launch levels point to a reoffer yield in the 6.3% area, based on Treasury rates at 1:50 p.m. EDT.

As reported, the proposed long bonds carry a change-of-control put at 101. J.P. Morgan, Morgan Stanley, and RBC are bookrunners for the deal.

Earlier today, Moody’s assigned a Baa3 rating to the proposed senior unsecured notes, noting that the Canadian fiber-based-products company plans to use the proceeds to fund its recently announced tender offers for shorter-dated issues in the same amount. The tender offer will repay a portion of its 2013, 2015, 2016, and 2017 senior unsecured notes.

In December, the company’s board authorized an increase in its share-repurchase program to $1 billion, from $600 million. As of June 30, it had bought back approximately $614 million under the authorization.

And American International Group (AIG) launched a $250 million offering of subordinated notes due 2015 at T+200, which was the tight end of the T+205-area initial guidance. Launch levels imply a reoffer yield in the 2.41% area.

Proceeds from the sale – which filings show will represent the only subordinated debt issued or guaranteed by AIG on its balance sheet – will be used for general corporate purposes. Citi is the sole bookrunner for the offering, which has an expected BBB+/Baa2 profile.

As reported, the proposed offering comes after some ratings agencies changed how they evaluate replacement-capital covenants when ascribing equity credit to hybrid securities, in effect allowing AIG to repay junior subordinated notes without replacement. In October last year, the company announced an exchange offer under which holders of five series of junior subordinated debt would receive new dollar-denominated senior notes.

The subordinated notes will rank senior to existing and future junior subordinated notes. – John Atkins/Gayatri Iyer

Philip Morris International, which is shopping an SEC-registered, benchmark offering, has floated guidance of T+60-65 for five-year notes, T+95 area for 10-year notes, and T+120-125 for 30-year bonds, sources said.

Guidance levels point to respective reoffer yields in the 1.37%, 2.67%, and 4.05% areas, based on Treasury rates at 11:15 a.m. EDT. The implied levels for the five-year notes and long bonds are lower than where the company placed previous issues with those tenors.

Philip Morris was last in the market in March, when it completed $1.25 billion in two parts: $550 million of 1.625% notes due 2017 at T+68, or 1.8%, and $700 million of 4.5% notes due 2042 at T+123, or 4.53%. Proceeds from that sale were also added to the general fund. The 2017 notes last traded on Friday at T+46, or 1.17%, and the 2042 notes last traded yesterday at T+99, or 3.7%, according to MarketAxess.

In November 2011, Philip Morris placed $750 million of 4.375% notes due November 2041 at T+140, or 4.5%, which at the time was the lowest-ever coupon for a corporate long bond. Today, the lowest coupon for a similar tenor is held by Bristol-Myers Squibb, with 3.25% notes due 2042, which were placed on July 26 at T+95, or 3.45%, according to LCD data.

As reported, proceeds from today’s proposed bond sale will be added to the company’s general funds, which may include working-capital requirements, stock buybacks, debt refinancing, and other general corporate purposes, filings shows.

Of note, Philip Morris had bought back approximately $11.39 billion of common stock under its $12 billion share-repurchase program as of June 30, which commenced in February 2010 and is expected to be completed in April 2013, filings show.

Active bookrunners for the issue are Credit Suisse, Deutsche Bank, and RBS, along with passive bookrunner J.P. Morgan. – Gayatri Iyer

With bank funding costs sliding in August, New York-based JPMorgan Chase is in the market with a benchmark offering of self-funded five-year senior notes, sources said. The offering marks its third benchmark deal of the year, and the first since March, before the eurozone debt crisis again heated up in the second quarter.

The offering represents the first new five-year issue since the bank placed $2.5 billion of 3.15% notes due 2016 in June 2011, an issue that subsequently was upsized on multiple occasions to nearly $3.9 billion. For reference, the issue traded this morning at T+105, or 1.75%, or at a G-Spread of 125 bps, according to MarketAxess.

In March of this year, the bank offered $2 billion of three-year fixed- and floating-rate notes, including 1.875% fixed-rate notes. In January the issuer placed $3 billion of 4.5% notes due 2022.

The bank’s funding-cost proposition is markedly improved in recent months. The 4.5% notes traded this morning at a weighted average of T+158, or 3.21%, which is well below the coupon rate, trade data show. That translates to a G-Spread in the 165 bps area, more than 100 bps below March issuance at T+270.

Five-year protection costs on JPM debt were down to 119 bps this morning, from 146 bps in late July and 165 bps in early June, after a spike from 90 bps at the end of the first quarter as bank spreads surged broadly wider in April and May, according to data from Markit.

JPM protection costs are substantially below five-year CDS in the 220-230 bps range this morning for Bank of America, Citigroup, and Morgan Stanley, and 257 bps for Goldman Sachs.

The average five-year CDS level across a sample including BAC, C, GS, JPM, ML, MS, and WFC declined below 200 bps this month for the first time since the U.S. credit-rating downgrade in August last year, according to data from Markit. That average peaked in the 380 bps area in early October and late November last year, and approached 300 bps in May.

Benchmark offerings across that peer group were relatively infrequent in recent months. Citigroup and Morgan Stanley placed new notes in July, and Wells Fargo – which maintains the lowest funding costs across that sample – tapped the markets in June. None of the banks made an appearance in May. – John Atkins