Corporate bond stress eases:1st time in 2yrs: Moody's

NEW YORK (Reuters) - Stress in the speculative grade or "junk" bond market has eased for the first time since the credit crisis began, a quarterly indicator by Moody's Investors Service shows.

The Liquidity-Stress Index for speculative grade bonds fell for the third consecutive month in June, marking its first quarterly drop in two years, Moody's said in a report released this week.

The global financial crisis first erupted in lending markets in summer 2007.

"Two years in, some speculative-grade companies are finding that access to the credit markets is slowly improving," Moody's analysts wrote.

The stress index measures the number of companies that carry the credit rating agency's lowest liquidity rating.

When a company's liquidity position improves enough for it to be upgraded from the bottom category, it puts downward pressure on the index.

The stress index fell to 17.1 percent in June, down from a six-year peak of 20.9 percent in March.

In an interview with Reuters earlier, high yield bond market analyst Martin Fridson, chief executive officer of Fridson Investment Advisors, cited this decline in the Liquidity-Stress Index as one sign that the financial crisis is abating.

But Fridson and other bond market analysts caution that companies still face stern challenges from the weak economy, as housing and labor markets continue languishing amid the most severe economic downturn in decades.

"Three months of improvement (in the index) doesn't make for a definitive trend, especially in a fragile economy," Moody's analysts wrote. "Corporate revenue and profits are still under pressure. Debt maturities are scheduled to increase significantly over the next few years. Consumers are saving, not spending."

The default rate among U.S. high yield issuers is likely to continue rising until late this year or early next, rating agencies forecast.

(Reporting by John Parry; Editing by Dan Grebler)