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…)