Financial Regulatory Forum

U.S. regulators ease credit risk rules on guarantees for banks using advanced approach

By Guest Contributor
August 15, 2014

By Bora Yagiz, Compliance Complete

NEW YORK, Aug. 15, 2014 (Thomson Reuters Accelus) - Three major U.S. regulatory agencies have eased requirements under the advanced approach risk-based capital rules by removing a key requirement concerning guarantees provided by counterparties eligible for recognition as credit risk mitigants.

Private equity: bank regulators tighten the collar on leveraged loans

By Guest Contributor
May 11, 2012
By Alex Lee

NEW YORK, May 11 (Business Law Currents) – With the leveraged finance market coming back to life, bank regulators want financial institutions to seriously tighten oversight and maintenance of their leveraged portfolios. Leveraged loans are heavily utilized by private equity shops for their transactional activities but there is an ever-increasing concern that while loan volume has gone up, underwriting practices have deteriorated to unacceptable standards.

Links to CDS measures growing common in bank credit deals (Westlaw Business)

By Guest Contributor
January 11, 2011

The American International Group (AIG) building is seen in New York, March 24, 2009. REUTERS/Shannon StapletonBy Erik Krusch

Jan. 10 (Westlaw Business) –  Credit terms are loosening, but lenders are still after their proverbial pound of flesh. Consider AIG and AT&T’s recent credit agreements, which link each loan’s interest rate to the corporations’ credit default swaps (CDS). Lenders are also insulating themselves from risk with London Interbank Offered Rate (LIBOR) floors, such as the one undergirding healthcare technology company MedAssets’ recent term loan. In a similar vein, bankers installed an original issue discount (OID) in construction materials maker Armstrong World Industries’ recent term loan. Lenders are doing their due diligence and weighing risks in order to concoct the right mix of interest rate terms in hopes of protecting their capital going forward. (more…)