The global speculative-grade default rate ended October at 1.7%, unchanged from its revised level in September, reports Moody’s Investors Service.

The global speculative-grade default rate began 2006 at 1.9% and was 2.0% a year ago. Moody’s default rate forecasting model is predicting that its issuers-based global default rate will also end 2006 at its current 1.7% level. The model predicts that the default rate will then rise to 2.5% by the end of October 2007.

In the U.S., the speculative-default rate settled at 1.9% in October, down slightly from the revised 2.1% rate at the end of September, the rating agency reported. The U.S. speculative-grade rate started the year at 2.4%, and was 2.3% a year ago.

Meanwhile, the European speculative-grade default rate experienced a three-fold jump in October to 1.5% from 0.5% at the end of September, Moody’s noted. The 1.5% rate is slightly below the 1.6% European default rate of a year ago, but higher than the 1.1% level at the start of 2006.

Year-to-date for 2006, 21 Moody’s rated corporate bond issuers have defaulted on a total of $7.0 billion of bonds. During the same period of 2005, Moody’s saw 28 defaults on $19.9 billion of bonds. The largest default in 2006 remains the bankruptcy of Dana Corp., which affected $1.6 billion in bonds.

In October, the global speculative-grade default rate as a percentage of dollar volume was 2.1%, a slight decline from September’s revised level of 2.2%. The volume-based rate was 3.8% at the beginning of 2006 and 3.7% at the end of October 2005.