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This compares with 72 upgrades and 170 downgrades in the previous quarter.

There were eight downgrades and two upgrades in emerging Asia in the first half of the year, compared with 10 downgrades and 12 upgrades in the second half of 2007.

Of six downgrades in the second quarter, one was an Indonesian telecommunications company, one an Indian automotive firm and two were companies from China's home/real-estate sector.

Pakistan's foreign-currency rating was lowered to "B", the only sovereign downgrade during this period, which reflects rising pressures from the combination of expanding fiscal and external imbalances, against a volatile and uncertain political setting.

"Following a rocky first quarter, the credit markets saw a continuation of the violent fluctuations that have almost become routine since this time last year," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research.

"Overall, downgrades outnumbered upgrades in the US, Europe, and the Asia-Pacific region, while the developing regions and Eastern Europe, the Middle East and Africa remained relatively benign."

The US in particular was especially hit hard in the housing-related sectors, including home-builders, real-estate companies, finance companies, and forest products and building-material firms, all of which had 100-per-cent downgrade ratios last quarter.

Following them were media and entertainment and transportation companies in non-financial sectors and insurance and brokerage firms in the financial sector. This echoes the previous quarter's turmoil, albeit to a lesser degree, owing largely to the credit crunch that erupted last year that has yet to pass. Energy prices continue to soar to record highs, and recession in the US and some European countries is still a threat.

In contrast, Latin America was positive, as shown by an 83.3-per-cent rating upgrade in the second quarter, following markedly stable credit quality for several consecutive quarters. This is fairly unsurprising given the current climate of rising commodity prices and strong financial performances by many Latin American banks, particularly in Brazil.

However, the negative bias in Latin America has been increasing from its recent low of 4.5 per cent last November to 9.2 per cent as of the end of the second quarter as global credit pressure continues to mount.

From the sector perspective, housing-related firms expectedly had the highest downgrade ratios, including home-builders/real estate, finance companies, and forest products and building-material companies, closely followed by the media and entertainment and transportation sectors, which also led the number of defaulters last quarter.