Global speculative-grade default rate picked to soar

It says that the global speculative-grade default rate finished 2008 at 4.0%, more than quadruple the closing level of 0.9% in the previous year.

Moodys now expects that the global default rate will continue to rise this year, likely climbing above 12% by the end of 2009.

"Global economic conditions are now substantially weaker and more perilous than they were in the two previous credit cycles of 1990-91 and 2001-02. Consequently, Moody's expects that the speculative-grade default rate is likely to exceed the 12% peak it reached in 1991," Moody's Director of Corporate Default Research Kenneth Emery says.

Its quantitative default rate forecasting model now predicts that the global default rate will reach 15.1% by year-end. The model's forecast increased from 10.4% last month due to a jump in the expected path for the US unemployment rate over the next year.