The global speculative-grade default rate remained at its eight-year low in July, unchanged from the 1.8% level recorded in June, reports Moody’s Investors Service.

Moody’s default rate forecasting model predicts that the global speculative-grade default rate will edge up to 2.8% by the end of July 2006.

“Although macroeconomic and credit quality indicators were sending some negative signals earlier this year, it seems to have subsided. Credit quality remains strong, spreads have come in, and it now appears that the default rate will remain low until the latter half of 2006,” said David Hamilton, Moody’s director of corporate default research.

The global speculative-grade default rate was down from 2.4% in January, which translated to a year-to-date decline of 26%. Over the past 12 months the global speculative-grade default rate has fallen by 44%, down from 3.1% a year ago.

In the first seven months of 2005, 14 Moody’s-rated corporate issuers have defaulted, compared with 24 for the same period a year ago. Among the 14 defaulters in 2005, 11 were domiciled in the U.S., two in Sweden, and one in Brazil.

So far this year, bond defaults total $3.5 billion, roughly half the $6.9 billion in defaults for the same period in 2004.

As a percentage of dollar volume, the global speculative-grade default rate fell slightly, to 1.8% in July from 1.9% in June. The current global dollar volume weighted default rate has fallen more than 30% from 2.6% at the opening of 2005. A year ago, the global dollar-weighted default rate was 2.1%.