In the first three quarters of this year 61 U.S. companies defaulted on their debt, or nearly quadruple the total for last year, according to a report Standard & Poor's Corp. released Thursday.
More than half of this year's defaults occurred since late May, S&P said.
Last month nine U.S. companies defaulted, including Lehman Brothers and Washington Mutual Inc., the rating agency said.
In the first five months of this year there were 28 defaults, compared with 16 in all of last year and 22 in all of 2006.
In September the U.S. speculative-grade default rate climbed 18 basis points from a month earlier, to 2.68%.
The rate hit a 25-year low of 0.97% at the end of last year. The latest estimate calls for the rate to climb to 4.9%, but a surge to 8.5% is not out of the question if economic conditions are worse than expected, S&P said.
The agency noted that spreads continued to widen. Last month the investment-grade spread grew 136 basis points from a year earlier, to 3.05 percentage points. The speculative-grade spread more than doubled, to 9.19 percentage points.
The September distress ratio — the percentage of high-yield bonds trading with risk premiums of more than 10 percentage points — grew more than tenfold from a year earlier, to 34%, the highest level since November 2002.
The number of corporate bonds receiving upgrades so far this year fell 15.1% from a year earlier, to 152, S&P said. Downgrades surged 58.6%, to 426.