The credit derivatives on bonds of four of Wall Street's leading bulge bracket investment banks are being traded as if the securities were "junk" rated as fears escalate over their exposure to the sub-prime mortgage crisis and a pile-up of unsold high-yield loans and bonds.

Data from rating agency Moody's shows the price of credit default swaps, a type of contract insuring investors against companies defaulting, have risen to a level that implies the bonds of Goldman Sachs, Merrill Lynch, Bear Stearns and Lehman Brothers are ranked sub-investment grade.