Global default rate set to hit 4.1% by August 2008

Moody's expects the high-yield default rate to rise substantially over the next year, with the issuer-weighted global default rate projected to reach 4.1% a year from now and 5.1% by August 2009.

"Higher spreads and diminished liquidity are putting distressed issuers at increased risk of default. However, as long as the US economy avoids recession, the default rate will likely remain below its long-run historical average of approximately 5.0%," says Kenneth Emery, director of corporate default