Bangkok--6 Dec--Standard & Poor's Recovery values (nominal and discounted) continued to rise in 2007 and were well above the long-term average, according to an article published today by Standard & Poor's. The report, titled "U.S. Recovery Study: Beguilingly High 2007 Performance Overstates Recovery Prospects (Premium)," says that bank debt averaged a staggering recovery rate of 98.6% on a discounted basis in 2007, while bonds averaged a recovery rate of 59%, also well above their historical average. "For all industries, secured debt usually recovers at a higher rate than unsecured debt," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "For secured debt, the type of collateral has a significant effect on recovery potential, and the recent proliferation of structural erosions in the secured-lending domain raises the risk of performance degradation within that borrowing sphere at the next turn of the credit cycle." Until this summer's turmoil, the spate of private-equity-sponsored LBOs resulted in a materially higher volume of covenant-lite facilities, propelled by a continued willingness among investors to take on greater risk in pursuit of yield. Data from the last round of LBO-related defaults in the consumer products, retail, and service sectors between 1988 and 1992 show that LBO-related defaults had lower recovery rates than non-LBO-related defaults during the same period. Based on prior experience, defaults from the recent LBO boom could yield lower recovery rates versus their non-LBO peers. Ms. Vazza added, "Recovery rates show considerable volatility historically, with variations stemming from myriad factors, including rank in the capital structure, presence and quality of collateral, firm-level considerations such as leverage and tangibility ratios, and macroeconomic business conditions." The report is available to RatingsDirect subscribers who have upgraded their package to include the Global Fixed Income Research add-on. RatingsDirect is the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.ratingsdirect.com. If you are not a RatingsDirect subscriber with the Global Fixed Income Research add-on, please contact your local Standard & Poor's representative or [email protected] for further information. Ratings information can also be found on Standard & Poor's public Web site at www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Find a Rating, then Credit Ratings Search. Members of the media may request a copy of this report by contacting the media representative provided. Media Contact: Mimi Barker, New York (1) 212-438-5054, [email protected] Analyst Contact: Diane Vazza, New York (1) 212-438-2760Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), is the world's foremost provider of financial market intelligence, including independent credit ratings, indices, risk evaluation, investment research and data. With approximately 8,500 employees, including wholly owned affiliates, located in 21 countries, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com. Key Contacts: Americas Media Relations: (1) 212-438-6667 media_ [email protected] Americas Customer Service: (1) 212-438-7280 [email protected]