Bond default rates still at record lows -- for now

Moody's records the lowest speculative-grade default rate for December since 1981, but substantial increases are expected in the next couple of years.

MoodyÆs has stated that its global speculative-grade default rate dropped to 0.9% in December, its lowest level since December 1981 when it stood at 0.7%, according to a report released this week. This is down from 1.7% a year ago.

Only 16 MoodyÆs-rated issuers defaulted in 2007, compared to 31 in 2006.

ôWe believe December 2007 likely marks the low point of the current default rate cycle as several issuers have missed interest payments in recent weeks, says MoodyÆs director...

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