Leveraged Loan Underwriting Is Weak, Banks Regulators Say

Federal banking regulators say the underwriting standards for leveraged loans are weak, according to a report released Friday. The so-called Shared National Credits review found that 31% of leveraged transactions originated in the last year were labeled as weak, as examiners questioned the ability to repay if economic conditions deteriorated. The report came from the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency.