Corporate defaults could start rising again beginning in 2011, especially if the economic recovery fizzles out by then, loan market specialists warned at a conference on Thursday.

As the economy and the capital markets rebounded this year, analysts and investors have reduced their peak forecasts and predict a sharp drop in defaults in 2010. This year, even low rated companies have been able to refinance with many replacing loans with longer-term bonds to create the breathing room to ride out the recession.