In 2016, global junk-bond defaults will rise to the highestlevel in seven years as a prolonged downturn in commodity pricescontinues to wreak havoc on company profits and balance sheets,according to Moody's Investors Service.

The ratings company forecasts that the speculative-grade defaultrate will reach 4 percent this year, up from 3.5 percent in 2015and the highest level since 2009. The default rate for all ofMoody's-rated corporate issuers is estimated to rise to 2.1percent, also a post-financial crisis high, from 1.7 percent lastyear.

“Persistently low commodity prices, slowing economic expansion,and widening high-yield spreads will send default rates higher in2016,” Moody's credit analyst Sharon Ou wrote in a Feb. 29report. Diminished credit quality, “combined with the sharpincrease in defaults and rising investor caution, indicate that thecredit cycle is turning.”