Deals
Fed's Warning on Leveraged Loans Seconded by U.S. Bank Regulator
- OCC report flags ‘record’ leverage in risky corporate lending
- Agency isn’t yet seeing it as threat to the financial system
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A key regulator of Wall Street banks has joined the Federal Reserve in warning about risky corporate borrowing that has reached record levels as lender protections are eroded.
The Office of the Comptroller of the Currency cautioned in its Semiannual Risk Perspective released Monday that it’s looking at “transactions with increasing leverage, weaker capital structures, and looser credit agreements.” The report includes a special section highlighting emerging risks in corporate bonds and lending, after the preceding version released in May didn’t address this high-risk debt.