New York: The global default rate for speculative-grade bonds tumbled for a tenth consecutive month in November as signs of a steady US economic recovery overshadowed concerns about Europe's sovereign debt crisis.

The 12-month trailing corporate high-yield default rate declined to 2.91 per cent from 3.12 per cent, rating company Standard and Poor's said in a report.

The pace in the US fell for a 12th straight month to 3.35 per cent from 3.37 per cent and the European rate declined to 1.08 per cent from 3.23 per cent.

High-yield bond issuance surged to a record this year as investors bought bonds from corporations that survived the worst financial crisis since the Great Depression emerged leaner after slashing costs.

Even as government budget cuts in Europe damp the region's outlook for growth, reports yesterday showed consumer spending, new-home purchases and consumer sentiment climbed in the US.

"In addition to just the improving composition of the market, we also have economic fundamentals that are better than they were in 2009 and 2008, if not great," said Guy LeBas, chief fixed income strategist and economist at Janney Montgomery Scott LLC in Philadelphia.

"We have an investor base that's much more willing to lend even to distressed corporations so firms can rely on greater debt issuance and greater borrowing to pay off bond maturities."

Junk bond issuance

Issuance of high-yield, high-risk securities rated below Baa3 by Moody's Investors Service and BBB- by Standard and Poor's surpassed the annual record in September. Sales reached $289 billion this year in the US, according to data compiled by Bloomberg.

Elsewhere, the cost of protecting US corporate bonds from default climbed and state regulators said they plan to investigate structured products sold to individuals.

RoundPoint Financial Group purchased at least its second batch of home mortgages from the Federal Deposit Insurance Corp.

The Markit CDX North America Investment Grade Index, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, rose 0.83 basis points to a mid-price of 85.58 basis points as of 6pm in New York, Markit Group index administrator said.