Corporate defaults through mid-May are double that of all of 2007, reports Standard & Poor's Ratings Services. "And market participants are understandably sharpening their scrutiny on the bulge of speculative-grade loans and bonds issued during the record expansion from 2005 through mid-2007." As of mid-May, companies had defaulted on almost $19 billion of debt, S&P reports. It expects defaults to continue to grow this year and next. It reports, "But beyond default risk, the key factor driving credit exposure for many holders of both cash and synthetic leveraged credit is the prospect for recovery. Predicting which issuers will miss payments on which issues can be very difficult when borrowers are rated 'B-' or 'CCC' and nearing the edge of default. But developing an understanding of what lenders can expect in the event of a borrower's default may be more feasible—and this is the focus of Standard & Poor's recovery ratings." Standard & Poor's managing director Bill Chew says, "Since 2002, nonbank institutional investors have substantially replaced banks as the holders of broadly syndicated loans. These institutional holders may not have the same incentives as banks in pursing debt recoveries during restructuring. They may have shorter holding periods, less interest in par recoveries, and, in some cases, may focus on strategies with only secondary interest in debt recovery--such as 'loan-to-own.'" –Nissa Darbonne, Executive Editor, Oil and Gas Investor, A&D Watch, Oil and Gas Investor This Week, www.OilandGasInvestor.com; ndarbonne@hartenergy.com