The global default rate for speculative-grade issuers fell to 9.2% inSeptember from 9.6% in August. That’s the seventh time the speculative-grade default rate has declined in the last nine months, Moody’s Investors Service reported.

Moody’s reported that seven issuers defaulted on a total of US$13.2 billion of bonds in September. The three largest defaults were Telewest Commuications ($5.2 billion), AT&TCanada ($3 billion), and NRG Energy ($3 billion).

In another significant sign of improvement, Moody’s reported that the dollar-volume-weighted speculative-grade default rate fell for the first time in 16 months. Moody’s dollar-volume-weighted speculative-grade default rate ended September at 18.3%, down from 18.4% in August.

Moody’s said that defaults in 2002 by issuers carrying investment-grade ratings within a year of default totaled $41.7 billion. Of the ten investment-grade defaults this year, WorldCom’s bankruptcy accounts for $23.2 billion (56%) of the total. In the third quarter of 2002, twenty-five Moody’s-rated issuers defaulted on a total of $56.9 billion of debt worldwide. By comparison, 40 rated issuers defaulted on $21.3 billion in the third quarter 2001.

In the first three quarters of this year, 115 Moody’s-rated issuers have defaulted on a total of $138.8 billion of debt, compared to 139 issuers that defaulted on $71.5 billion in the first three quarters of 2001. Moody’s forecasting model predicts that the global speculative-grade default rate will continue to decline to end 2002 near 8.4%.