The global speculative-grade default rate edged up to 2.4% in October from 2.3% in September, Moody’s Investors Service reported today. That’s the first increase in the global default rate since October 2003.

As a percentage of dollar volume, the global speculative-grade default rate rose to 2.0% in October from 1.7% in September, for the first increase since January, when the dollar-weighted default rate was 5.8%, Moody’s said.

Through the first 10 months of 2004, 33 issuers have defaulted on US$10.8 billion of bonds, it says. During the January-through-October period last year, 71 issuers defaulted on US$31.9 billion. The four corporate bond defaults in October totaled US$2.3 billion, and all were by companies based in the U.S. The largest default last month also was the largest thus far in 2004: US$1.30 billion by Trump Atlantic City Associates.

The rating agency’s default forecasting model predicts that the global speculative-grade default rate will remain stable over the twelve months, returning to 2.3% at the end of this year and inching up to 2.4% by the end of 2005.

“The default rate may be approaching a cyclical low,” said David Hamilton, director of Corporate Default Research. “We expect the default rate to bottom out near 1.9% around March or April of next year before beginning to trend higher. Over the short to medium run, we expect the improvement in aggregate credit quality to continue.”