Debt market analysts warned that the recovery of the international junk bond market has been set back several months due to the aftermath of the terrorist attacks on the US.

Analysts at Moody's, the debt rating agency, painted a bleak outlook for corporate bond market investors. Moody's predicted that the default rate, a key measure of the market's health, will continue to rise until the middle of next year with a fall following in the second half of 2002.