"The supply of U.S. companies with junk-rated debt is rising just as investor demand for higher yields is climbing."
Moody's reports a two-year high in company debt rated B3 negative or worse as part of a trend that has seen the list of 184 companies grow by 26 percent over the period.
The rise has been led by oil and gas firms, which accounted for 12 of the 28 additions to the junk list in February.
What's more, the roster would be even longer but for companies falling off the list due to reasons including filing for bankruptcy. Of the 18 issuers no longer rated, 39 percent filed either for bankruptcy protection or "distressed exchange, and 33 percent withdrew, with just 28 percent getting off the list due to upgrades."
Read more: "This is a reversal from the previous two quarters, when most companies left the list via ratings upgrades"