WASHINGTON - Moody's Investors Service on Monday added its voice to the chorus of observers concerned about declining credit quality among commercial borrowers.

Moody's Risk Management Services reported that the default risk of U.S. and Canadian public companies rose last month for the second month in a row.

The subsidiary monitors more than 9,000 companies and found that 4.3% of the weakest 25% are likely to default "on bank loans, bonds, or other borrowing over the next 12 months beginning Nov. 1," up from 4% in September, Moody's Risk Management Services said in a press release.

The default probability for the weakest 25% of public companies has nearly doubled since the beginning of last year, when only 2.3% were expected to default in the coming year. The average rate for the 20 years that ended in 1997 was 1.7%.

A separate Moody's study also issued Monday found that 8.3% of companies with outstanding speculative-grade corporate debt are expected to default by October.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.