(Reuters) – The number of new corporate defaults globally reached 16 in August, the highest August monthly number since 2009, S&P said in a report released on Wednesday, the latest sign that corporate stress is building.

While defaults tend to slow down during the summer, last month’s number was well above the 8.6 average for August seen in previous years.

This brought the global corporate default tally to 107, with most of the defaults coming from Europe and the United States.

The rating agency expects default rates to keep rising as aggressive rate hikes take their toll on companies faced with an increased cost of funding and looming debt maturities.

Default rates are expected to hit 4.5% in the United States by June 2024 from 3.5% in July 2023, and to increase to 3.75% in Europe by June 2024 from 3.1% in July 2023, the report added.

Sector-wise, media and entertainment accounted for one third of defaults in the United States and 25% of the total defaults in August, while the consumer products sector was the most hit in Europe, S&P noted.

Defaults in emerging markets continued to lag, but Latin America-based issuers are seeing an increase, representing 13 of the 14 defaults across all emerging markets so far this year.