month global speculative-grade default rate finished at 5.5 percent in July 2010, marking the eight consecutive monthly decline since the peak of 13.5 percent in November 2009, said Moody's Investors Service in a new report. The current global rate is down from previous month's revised level of 6.2 percent. A year ago, the global default rate stood at 11.7 percent. The ratings agency's default rate forecasting model now predicts that the global speculative-grade default rate will decline sharply to 2.6 percent by the end of this year and then edge lower to 1.8 percent a year from now. “Absent a substantial retreat in available financing, the global default rate will continue to slow,” said Albert Metz, Moody's Director of Credit Policy Research. “The apparent softness in the economic recovery will not be enough to re-accelerate the default rate.” In the US, the speculative-grade default rate fell from June's revised level of 6.4 percent to 5.4 percent in July. At this time last year, the US default rate stood at 12.7 percent. Among US speculative-grade issuers, Moody's forecasting model foresees the default falling to 2.7 percent by December 2010 and 2.1 percent a year from now. In Europe, the forecasting model projects the speculative-grade default rate will arrive at 2.4 percent in December 2010 and 1.1 percent a year from now. A total of 34 Moody's-rated corporate debt issuers have defaulted so far this year, of which seven were recorded in July. In comparison, there were 196 defaults in the same period of last year. Of the seven defaults in July, four were by European issuers. The remaining defaulters came from the US (2) and Asia (1). Across industries over the coming year, default rates are expected to be highest in the Hotel, Gaming, & Leisure sector in the US and the Durable Consumer Goods sector in Europe. Measured on a dollar volume basis, the global speculative-grade bond default rate edged lower to 2.9 percent in July from 3.1 percent in June. Last year, the global dollar-weighted default rate was much higher at 17.6 percent. In the US, the dollar-weighted speculative-grade bond default rate fell from 3.0 percent in June to 2.5 percent in July. The comparable rate was 19.0 percent a year ago. Moody's speculative-grade corporate distress index - which measures the percentage of rated issuers that have debt trad __
