S&P Downgrades 15 More Co.’s to Junk in June

U.S. corporate defaults are causing the number of companies that lost their investment-grade credit ratings to rise at the third-highest total since at least 1987. Ratings on 15 companies worldwide were cut to junk status in June, Standard & Poor’s said on Monday.

From Reuters:

Companies cut to junk status, so-called fallen angels, are relatively rare but have surged amid the global recession.

Year to date, 60 issuers have been cut to junk status, affecting $209 billion of debt, S&P said in a statement.

Another 75 issuers with $255 billion in rated debt are teetering on junk status, the rating agency said.
…
Nineteen banks and finance companies have been cut to junk status this year, more than any other industry….Another 17 are vulnerable to a downgrade to junk, S&P said.

S&P expects more companies to go into junk land. That fact will unavoidably cause a  surge in borrowing costs as investors will demand higher yields.

emphasis added