Moody’s Investors Service reported that its speculative-grade default rate ended February unchanged at 1.6%, at which it has remained over the past three months. There were no new corporate issuer defaults in the month of February.

The rating agency’s default rate forecast through February 2008 edged up slightly. Moody’s default rate forecasting model for its issuer-weighted global speculative grade default rate predicts that the default rate will rise to 2.7% by the end of 2007, rising to 3.2% by the end of February 2008.

“Defaults are primed for a potentially sharp rise,” said David Hamilton, Moody’s director of corporate default research in New York. “The recent volatility in equity markets worldwide, certain sectoral weaknesses, such as sub-prime lending, and a consensus view among economists that economic growth and profitability will slow all indicate weaker corporate credit conditions.”

As a percentage of dollar volume, Moody’s global speculative-grade default rate also remained unchanged at 1.2% from January to February. Similarly, Moody’s issuer-weighted loan default rate remained unchanged at 0.5% in February.

Moody’s speculative-grade default rate for U.S. issuers edged down slightly from 1.7% in January to 1.6% in February. On a dollar volume basis, Moody’s U.S. speculative-grade default rate dipped to 1.1% in February from 1.2% in January.