Friday July 13, 10:29 am Eastern Time Fitch says junk bond default rate hits 10 pct NEW YORK, July 13 (Reuters) - As the U.S. economy slowed and banks stiffened their lending standards, the junk bond default rate soared to 10 percent over the last 12 months, credit rating agency Fitch said on Friday.

Fitch became the first rating agency this year to say the 12-month default rate for junk bonds, which carry high yields because of their risks, has reached double digits, a level not seen since the early 1990s, when the United States was last in a recession.

The rating agency identified $45.5 billion of defaults in the year's first half, more than triple the $14.2 billion of defaults in the first half of 2000. June added $5.8 billion of defaults from 12 issuers, including telecommunications companies PSINet Inc. and 360networks Inc. and gypsum wallboard maker USG Corp. (NYSE:USG - news), Fitch said.

Fitch, whose default totals include dollar-denominated bonds rated ``BB-plus'' or lower, said $15.5 billion of telecom debt has gone into default this year and warned that another $4.5 billion remains at ``high risk'' of default by year end.

Weakening corporate balance sheets and tighter lending standards have caused some companies' borrowing costs to skyrocket, and left many unable to raise cash.

-- Guy Daley (guydaley1@netzero.net), July 13, 2001