At the end of last year, S&P rated $984.8 billion worth of debt, from 52 separate issuers, one step away from speculative grade, also referred to as junk. At the end of 2011, the number of credits that were one downgrade away from junk status was 38, representing $227.4 billion.

"Most of the downward pressure that affected potential 'fallen angels' was because of the European credit crisis," Diane Vazza, credit analyst at S&P, told Reuters, referring to issuers whose ratings are close to being cut to junk.

Twenty-five issuers, or nearly half of the potential junk credits, were in the banking sector and of that group, eight were banks located in India.

S&P describes this group as issuers who are rated BBB-minus with either negative outlooks or ratings on its so-called CreditWatch with negative implications. The latter classification signifies that a decision on whether or not to downgrade is more imminent.

The United States and Europe had the most entities in danger, each with 15 issuers. The Asia-Pacific region was next with eleven issuers.

The consumer products sector had six potential fallen angels, four of which were based in the United States, S&P's report said.

However, the actual number of fallen angels last year was 43. These credits represented $302.4 billion in par value. That was a slight improvement over 2011's 45 credits, worth $363.4 billion, that were cut to junk.

On the flip side, the number of credits on the cusp of being lifted into investment grade status, referred to as potential rising stars, grew to 25 in 2012 from 22 in 2011.

Potential rising stars at the end of last year represented $229.1 billion in rated debt versus $78.7 billion at the end of 2011, Vazza said.

At year's end, 15 of the potential rising stars were located in the United States, with four from Europe representing the second-biggest concentration.

"The transportation and media and entertainment sectors have the most potential rising stars, with three issuers each," S&P said.

Rising stars are defined as issuers currently rated BB-plus with either a positive rating outlook or on CreditWatch positive.

Credits upgraded to investment grade territory totaled 29 last year, representing $63.6 billion in rated debt. That was a decline from 2011, when 38 so-called rising stars, accounting for $143.4 billion in credit, were raised to investment grade, Vazza said.

"The fallen angels count exceeded the rising stars' in 14 out of the past 25 years (1987-2011)," according to S&P.

Credit spreads over benchmark five-year US Treasuries for issuers in the BBB category were 175 basis points to 254 basis points in 2012. Spreads widened to a range between 326 basis points and 493 basis points for credits in the BB category.