New Banking Guidance May Impact Leveraged Lending

24 April 2013
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  • Federal bank regulatory agencies have issued their new supervisory Interagency Guidance on Leveraged Lending, with a scheduled compliance date of May 21, 2013. The new guidance replaces these agencies’ existing guidance on leveraged lending and will require regulated lending banks to review and update their risk management policies, underwritings standards and related practices.
  • While the full implications on the leveraged lending market remain to be seen, it is possible that this could lead to an increased role for unregulated (or less regulated) providers of financing as well as for less regulated financing products, such as high yield bonds.