Agencies Issue Updated Leveraged Lending Guidance

Federal bank regulatory agencies released updated supervisory guidance on leveraged lending. The guidance covers transactions characterized by a borrower with financial leverage that significantly exceeds industry norms. The guidance focuses attention on key areas that include: establishing a sound risk-management framework; underwriting standards; valuation standards; pipeline management; reporting and analytics; risk rating leveraged loans; participants; and stress testing. This guidance applies to financial institutions supervised by the agencies that engage in leveraged lending activities.

Read more about lending guidance here:

http://www.fdic.gov/news/news/press/2013/pr13021.html