Corporate defaults in North America will rise this year, forecasts Standard & Poor’s. The rating agency predicts that the number of defaults will surpass last year’s total, “due to the current tight credit environment, the weakening economic outlook, and the prospect of weaker operating results for corporations.”

S&P reports that for the first quarter of 2008, North American corporate defaults already amount to more than 130% of all of 2007’s defaults (based on the dollar amount of rated issues). During this period, 12 rated issuer defaults were recorded, affecting rated debt worth US$9.6 billion. In 2007, just 18 firms defaulted (affecting rated debt of US$7.4 billion).

Three of the 12 first-quarter defaults were in the media/leisure sector, three in chemicals, two in consumer products, and one each in retail/restaurants, real estate, financial services, and automotive, it reports.

“While the immediate triggers of the 12 defaults were primarily missed interest payments, all the defaulted companies have experienced deterioration in operating results and credit protection measures, leading to liquidity problems,” S&P explains.