Lynn's Feed
Dec 17, 2014

U.S. regulators’ leveraged loan policies starting to bite

NEW YORK (Reuters) – Lenders scaled back on underwriting large debt-laden buyouts for low-rated companies in the fourth quarter, signaling that U.S. warnings to regulated banks against these highly leveraged transactions are gaining traction.

Loans testing regulatory guidelines keep getting done, but banks appear to be more judicious, based on new Thomson Reuters LPC data, even as uncertainties about compliance linger.

Dec 17, 2014

TRLPC: U.S. regulators’ leveraged loan policies starting to bite

NEW YORK, Dec 17 (Reuters) – Lenders scaled back on
underwriting large debt-laden buyouts for low-rated companies in
the fourth quarter, signaling that U.S. warnings to regulated
banks against these highly leveraged transactions are gaining
traction.

Loans testing regulatory guidelines keep getting done, but
banks appear to be more judicious, based on new Thomson Reuters
LPC data, even as uncertainties about compliance linger.

Nov 21, 2014

Confusion over leveraged loans despite regulators’ insight

NEW YORK (Reuters) – Regulators’ attempts to clarify U.S. leveraged lending guidelines have answered some questions raised by banks, but also added fresh layers of complexity into loan underwriting decisions, banking sources said.

Banks have been trying to stick to U.S. leveraged lending guidelines since March 2013, using a process of trial and error that erred on the side of lenience and attracted regulators’ ire and closer scrutiny.

Nov 7, 2014

U.S. regulators still concerned about banks’ leveraged loans

By Greg Roumeliotis and Lynn Adler

(Reuters) – Federal regulators said on Friday that their 2014 review of U.S. bank loans showed the proportion of risky leveraged loans was the same as it was the year before, but they warned banks that they will carry out more reviews as risky loans continue to rise in absolute terms.

Making junk-rated loans to companies that are often owned by private equity firms is a lucrative, high-margin business for major Wall Street banks. But regulators are worried that the underwriting guidance they issued last year is not being heeded.

Oct 23, 2014

TRLPC: OCC signals flexibility with leverage loan ratio

NEW YORK (Reuters) – Limits on loans that regulated banks handle for companies with high amounts of junk-rated debt are not set in stone, an official from the Office of the Comptroller of the Currency said Thursday.

A debt-to-Ebitda leverage ratio of 6.0 times, which U.S. regulators have determined would raise concern, is not a hard line when considering compliance with federal leveraged lending guidance, Darrin Benhart, deputy comptroller for Credit and Market Risk at the OCC, said Thursday at the Loan Syndications and Trading Association’s annual conference in New York.

Oct 21, 2014

U.S. regulators to mandate CLOs hold 5 percent of new deals

NEW YORK (Reuters) – U.S. regulators including the Federal Deposit Insurance Deposit Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) are mandating that collateralized loan obligation (CLO) managers hold a stake of each deal on their books.

Final risk retention rules require CLO managers to retain capital equal to 5 percent of any new deal done starting two years from the rules’ effective date. CLO managers now have no such restriction.

Oct 14, 2014

Outflows from loan mutual funds could last until mid 2015

LONDON, Oct 14 (Reuters) – Outflows from loan mutual funds
have hit $17 billion since April when the threat of US interest
rate rises receded, and will extend through year end and
possibly until mid 2015, bankers and analysts said.

This exodus of retail investors is expected to continue
until they see evidence that the Federal Reserve is set to raise
interest rates and Treasury yields finally climb.

Oct 9, 2014

Banks wary of refinancing highly leveraged U.S. loans

LONDON (Reuters) – Private equity-owned companies face difficulties refinancing billions of dollars of existing buyout loans and raising extra debt for acquisitions as U.S. regulators tighten the screws on banks making highly leveraged loans, investors and bankers said.

Banks may be unwilling or unable to lend more money or extend revolving credits to existing borrowers that were put in place during the bull market which may now contravene US leveraged lending guidelines issued in March 2013.

Oct 9, 2014

RLPC/IFR-Banks wary of refinancing highly leveraged US loans

LONDON, Oct 9 (Reuters) – Private equity-owned companies
face difficulties refinancing billions of dollars of existing
buyout loans and raising extra debt for acquisitions as U.S.
regulators tighten the screws on banks making highly leveraged
loans, investors and bankers said.

Banks may be unwilling or unable to lend more money or
extend revolving credits to existing borrowers that were put in
place during the bull market which may now contravene US
leveraged lending guidelines issued in March 2013.

Aug 8, 2014

GE’s energy investing business fires up power project funding

NEW YORK, Aug 8 (Reuters) – GE Energy Financial Services
(EFS), General Electric’s energy investing business, expects to
close Friday on the third in a growing stream of financings it
has led for new gas-fired plants as U.S. environmental
regulations steer power generation away from coal.

EFS, through GE Capital Markets, led 14 other lenders
providing $550 million in senior secured credit facilities
backing construction of a natural gas-fired plant in Maryland
for Competitive Power Ventures and its partners Marubeni Power
and Toyota Tsusho.