The number of companies with debt trading at distressed levels, a leading indicator of default rates, hit a five-year high at the end of the third quarter as the deepening financial crisis put further pressure on prices, according to Moody’s Investors Service.

The ratings agency’s distressed index, which measures the percentage of junk-rated issuers that have debt trading at more than 999 basis points over safe government bonds, has risen to 29.6 per cent – the highest level since November 2002.