Percentage of exposure-at-default recovered on a defaulted loan after the workout. Long-run averages by seniority: first-lien middle-market sim 65%–75%, second-lien sim 30%–45%, senior unsecured / mezzanine sim 15%–25%. Recovery is the complement of LGD: Recovery = 1 - LGD, and feeds the realized-loss identity Loss = EAD × (1 - Recovery).