Globally 28 companies (24 public and 4 confidentially rated) defaulted in the third quarter of 2008. This is the largest number of defaults since the third quarter of 2003 and already five more than the total number of defaults for all of 2007, says Standard & Poor's in a new report.

The volume of rated debt affected by third quarter's defaults was a massive $186.2 billion, dwarfing the $8.15 billion recorded in all of 2007 and making this the largest defaulting debt amount in recent memory, according to the report, titled "Quarterly Default Update And Rating Transitions."

The vast majority of this amount stems from the collapse of both Lehman Brothers Holdings Inc. and Washington Mutual Inc,. along with their various subsidiaries.

Twenty-four of the defaults in the third quarter of 2008 were domiciled in the US, two came from Europe, and one each was from Canada and Hong Kong. Globally, the corporate default rate for speculative-grade-rated entities moved to 0.75 per cent at the end of third-quarter 2008 from 0.20 per cent during the same period in 2007.

"After hitting record lows in 2007, the pace of defaults has picked up markedly," said Diane Vazza, head of Standard & Poor's global fixed income research group. "If the pace of defaults set so far this year is maintained through the remainder of the year, 2008 would have the largest number of defaults, at 88, since 2003."

Of the 24 defaults in the third quarter, seven were financial institutions, four were from the consumer products sector, three each from leisure time/media and the forest and building products/homebuilders sectors, two from both transportation and real estate, and one each from insurance, health care/chemicals, and aerospace/automotive/capital goods/metal.