NEW YORK, May 1 (Reuters) - While credit markets rallied through April, 40 corporate issuers defaulted globally, the highest monthly default tally since March of 2002 and the second highest since Standard & Poor's began the series in 1981, the agency said on Friday.

Twenty-nine of the defaults were U.S.-based companies. In the year to date, 102 issuers have defaulted globally, S&P said in a statement.

The defaults came as U.S. investment-grade corporate bond spreads tightened 113 basis points to 487 basis points over comparable U.S. Treasuries, and high-yield spreads tightened 541 basis points from early March through Thursday to 1,345 basis point over Treasuries, according to Merrill Lynch data.

In terms of performance, high-yield bonds returned a monthly record of 11.47 percent in April while investment-grade bonds returned 3.08 percent, according to Merrill Lynch data.

This past week 10 issuers defaulted globally, five of which were in the U.S., including Chrysler LLC's filing for Chapter 11 bankruptcy on Thursday.

"The precipitous increase in defaults reflects a pronounced decline in economic fundamentals and earnings prospects, as well as the continued credit freeze, effectively halting lending to speculative-grade borrowers," said Diane Vazza, lead author on the report.

In a separate report earlier this week, S&P said that the trailing-12-month global speculative-grade default rate reached 5.42 percent in April, up from 4.92 percent at the end of the first quarter and three times the 1.72 percent default rate recorded at the same time last year.

"Historically, defaults have continued to escalate even after signs of economic recovery. This cycle will be no different," said Vazza.

"We expect the economy to bottom in the third quarter of 2009, but default occurrences will likely be abundant past that time horizon," she said.