CFO: Regulators Hoist Bar for Leveraged Borrowers
CFO reported that by setting new standards for bank underwriting, the Fed, FDIC and OCC ensure private-equity firms and companies will have to meet higher standards when seeking buyout loans.
The article that the new guidance, which is not law, increases some of the analysis and monitoring banks have to do around a loan that raises the debt on a borrower’s balance sheet to “above industry norms.” The guidance could eventually dampen financial institutions’ appetite for financing leveraged buyouts and make it more difficult for already highly leveraged firms to refinance their debt, CFO said.
To read the full CFO article click here.
To read the Fed’s news release click here.