Moody’s Investors Service reported that its global speculative-grade corporate default rate slipped to 1.6% for the past 12 months in, down August from 1.7% in July.

The rating agency noted that the global speculative-grade default rate has moved in a narrow range over the past 16 months, rising no higher than 2.1% and falling no lower than 1.6%. At the start of 2006 the rate stood at 1.9%.

Moody’s predicts only a marginal rise in corporate defaults over the next 12 months. Moody’s default rate forecasting model for its issuer-weighted global speculative-grade default rate predicts that the default rate will finish 2006 at 2.1%, rising to 2.4% by the end of August 2007.

So far in 2006, 12 Moody’s-rated corporate bond issuers have defaulted on a total of US$3.6 billion. All of the 2006 bond defaulters have been U.S.-based, with the exception of France-based Global Automotive Logistics. In the comparable period for 2005, there were 19 defaulters worldwide, 16 in the U.S., 2 in Sweden, and 1 in Brazil, with a total dollar volume of US$4.9 billion.

Measured on a dollar volume basis, Moody’s global speculative-grade default rate fell to 3.7% in August from 3.9% in July. The current dollar weighted default rate is barely lower than the 3.8% level at the beginning of 2006, but significantly higher than the 2.1% level in August 2005, it noted.