[ by Melanie Gretchen ] Beware S&P, the end is near, according to Kroll Bond Ratings Inc. owner Jules Kroll.   He said his 2-year-old credit ratings firm is poised to surpass Standard & Poor’s providing grades on securities backed by commercial mortgages, capitalizing on a stumble last year by his larger rival.  Kroll has attained 14% of the U.S. market secured, according to Commercial Mortgage Alert, a newsletter. Market Monopoly. To date, Kroll Bond Ratings Inc. has focused on grading securities backed by offices, hotels, and shopping malls since S&P was frozen out of the segment by Wall Street banks after derailing a $1.5 billion sale by Goldman Sachs and Citigroup in July. "We could very easily replace S&P as the No. 3 rating agency in that sector.   Looking at the business today versus a year ago when we hadn’t issued our first rating yet, it’s pretty good progress." Progress Report. The 71-year-old risk-consulting executive, whose former firm’s work included probing the hidden assets of Saddam Hussein’s Iraqi regime in the 1990s, started this segment of the company after the largest firms assigned top marks to U.S. subprime-mortgage bonds before that market collapsed in the credit crisis.  In an interview with Bloomberg, he said the business will be viable when it reaches an annual pace of $40 million to $50 million in revenue. By the end of the year, he expects to be halfway there and "cash-flow positive." Where the S&P Stands. Mr. Kroll credits much of his success "materially by the ineptitude and the continued ineptitude of S&P."  In defense of the New York-based S&P, a unit of McGraw-Hill, spokesman Ed Sweeney noted in an email that the McGraw-Hill's ratings unit is the largest such firm by revenue, and added that "investors value the knowledge and experience our of analysts in CMBS as well as the many other asset classes we cover." As of last year, S&P was ranked third globally and Kroll was sixth in rating commercial mortgage bonds, according to Commercial Mortgage Alert.  S&P hasn’t rated a so-called conduit deal, the biggest part of the market, since July, according to Bloomberg. And so the gap narrows.  And C-I is cheering Kroll on - in part because New Yorkers usual root for the 'underdogs'. For further details, go to: [Bloomberg, 5/21/12].