"Fallen angels", or companies whose credit rating falls to junk status, are more likely to default, and in a shorter time period, than other companies.

According to Standard & Poor’s, top ratings agency, fallen angels are almost twice as likely to default as companies which have always been placed at speculative, or junk, status.

Defaults are likely to occur during the first three to four years following a company’s decrease from investment to speculative grade.

The report’s findings come along as General Motors, one of the world’s biggest corporate bond issuers, is on the verge of junk status.

Last week Fitch Ratings downgraded the carmaker to BBB-. It is already rated the same as S&P and is just one point above that at Moody’s Investor Service. All three agencies describe the situation as negative, considering the next step to be down.

A decline to junk status could urge many bondholders to sell their holdings.

S&P said the default could be the result of "ratings velocity", or the speed at which a company moved after moving into speculative grade, according to Jennifer Hughes.

As a rule, a complex of factors can influence default, namely an economic downturn, a change in dynamics within the industry or a shift in the company’s financial strategy.

Financial institutions usually take into account the shortest time to default since the downgrade shrinks their access to affordable capital.

Nevertheless such sectors as aerospace and automotive, media and high technology which appear to be more susceptible to higher ratings velocity are also more likely to take advantage of the velocity to come back to investment grade as "rising stars".

Moreover, after turbulence surrounding the downgrade, total returns for fallen angels are usually higher compared with the companies below investment grade.