HLT Comment Period Extended
WASHINGTON -- Federal regulators extended until Sept. 23 the deadline for commenting on a proposal to change the definition of highly leveraged transactions.
The three federal banking agencies said in a joint statement on Tuesday that they had received numerous requests to extend the original Aug. 26 deadline.
Bankers and Borrowers Balk
Prompted by complaints from bankers and borrowers that regulators are classifying too many loans as "highly leveraged," regulators on July 3 proposed a new HLT definition.
Currently, a loan is a highly leveraged transaction when it is made to a company that uses the funds for a buyout, an acquisition, or a recapitalization, and if the deal pushes the borrower's liabilities-to-assets leverage ratio to more than 75% or if the deal doubles the company's liabilities and its leverage ratio hits 50%.
