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``The credit cycle is peaking,'' says John Lonski, chief economist at ratings company Moody's Investors Service in New York. He sees the high-yield spread rising to 4 percentage points by the end of 2007.

The tougher corporate-credit conditions are starting to bite. In the past two weeks, more than a dozen companies postponed or restructured debt sales.

Among those postponed: a $350 million note sale by Magnum Coal Co., a West Virginia-based coal producer, and a $500 million bond sale by Kia Motors Corp., South Korea's second largest automaker. Kia planned to use some of the money to help finance construction of a U.S. factory employing 2,500 in Georgia.