Standard & Poor's annual default recovery survey, released last week, painted a grim picture for holders of defaulted loans.

As a result of the record defaults of 2002, recovery rates - both in terms of ultimate recovery and trading price recovery - have fallen to record lows, and things are not likely to improve this year either. Bank loans achieved a 72% settlement value at time of emergence in 2002, compared with 73.6% in 2001.

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