Global credit quality continued its negative trajectory in the third quarter, reports Moody’s Investors Service.

The upgrade-downgrade ratio fell to 0.24 in the quarter, it reported. Also, the number of rated issuers on review for downgrade doubled in the third quarter. “At the end of the third quarter of 2008, 8.9% of rated issuers were on review for downgrade, up from 4.2% at the end of the second quarter,” says Moody’s analyst, Jennifer Tennant.

The credit outlook for investment-grade issuers was slightly more positive than for speculative-grade issuers, but both categories had more issuers on review for downgrade than for upgrade, the firm said.

The United States and Canada have the largest disparity, with a 10-to-1 watch-for-downgrade/watch-for-upgrade ratio, says Moody’s, while the U/S/, Canada and Europe have the largest percentage of negative outlooks and watches for downgrade.

The Middle East and Africa have the largest percentage of positive outlooks and Latin America had the highest percentage of rated issuers on watch for upgrade.

“These rating actions and reviews highlight the recent financial crisis and continued problems in residential real estate markets,” says Tennant.