Feds Want Tighter Underwriting For Leveraged Finance

Law360, New York (March 26, 2012, 7:17 PM EDT) -- Federal banking regulators on Monday proposed new guidance on financial transactions used in corporate mergers and private equity buyouts with the aim of bringing “prudent” underwriting practices back to the recovering market.

The Federal Reserve Board, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency said in their proposed guidance that leveraged finance transactions have been on the rise since bottoming out during the 2008 financial crisis, and that many of the new deals did not have sufficient protections for lending...
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