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More resources for national banks

Leveraged Finance

In general, leveraged finance is a credit package that funds the acquisition or recapitalization of an entity or part of an entity. The entity may be privately or publicly held, and it holds the acquisition debt on its books.

AL = Advisory Letters
EC = Examining Circulars

Leveraged Lending (AL 1999-4, May 1999)
Covers elevated risks associated with leveraged lending activities and OCC's risk management expectations for banks that engage in them

Highly Leveraged Transactions (EC 245, December 1998)
Provides examiner guidance for assessing the adequacy of a bank’s policies, procedures, and controls in financing highly leveraged transactions

Sound Risk Management Practices: Leveraged Financing (OCC 2001-18, April 2001), Interagency Statement
Addresses concerns about the deterioration in the leveraged finance portfolios of many banking organizations