corporate default are poised to rise

-- U.S. corporate defaults probably willquadruple next year after the number of companies that lost theirinvestment-grade credit ratings rose at the fastest pace since2003. --Moody's Investors Service predicts companies will default on 4.7 percent of their bonds in 2008 as the economy slows, up from 1 percent this year. Jones Apparel Group Inc., the Bristol,Pennsylvania-based maker of Nine West shoes, mortgage lenderResidential Capital LLC and 31 other companies with a combined$52 billion of debt were downgraded to junk by Moody's this year. --Downgrades are accelerating across America. Moody's reducedratings on 389 corporate issues this quarter, compared with 150upgrades, according to data compiled by Bloomberg. The gap was the biggest since the first quarter of 2003. --Another 447 borrowers in the U.S. are at risk of havingtheir ratings reduced, according to an S&P statement today.Companies in the automotive industry lead the tally of those indanger of having their credit rankings lowered, S&P said. -- Companies that lost their investment-grade rankings, knownas fallen angels, included Natick, Massachusetts-based BostonScientific Corp., the second-largest maker of heart devices, BeloCorp., the Dallas-based owner of the Dallas Morning News and 20television stations, and Nuveen Investments Inc. of Chicago,which manages closed-end mutual funds. --The last time so many companies were cut to junk was afterWorldCom Inc. in Jackson, Mississippi, and AdelphiaCommunications Corp., then based in Coudersport, Pennsylvania,filed for bankruptcy in 2002. --The Merrill Lynch high-yield bond index has a par amount of$689 billion. The high-yield market totaled $882 billion in thethird quarter, according to a Moody's estimate based on bonds