When New York-based private-equity firm Veritas Capital picked Jefferies Group LLC this month to manage a $1.4 billion buyout loan, it passed over some much bigger Wall Street firms. Names like Morgan Stanley and Barclays Plc and UBS AG.

Why? Because Jefferies dangled something in front of Veritas that none of the larger rivals could, according to people with knowledge of the matter: The ability to take on higher risk levels in the deal than regulators deem appropriate for the commercial banks they oversee.

Jefferies, a New York-based investment bank, isn't beholden to those lending guidelines. The losing firms are.

Welcome to the new world of leveraged loans, a market that has been shaped in large part by the unintended consequences of government attempts to ensure that the country's biggest banks don't take the same kind of risks that led to the 2008 financial crisis. Jefferies has been one of the biggest beneficiaries, scooping up the risky deals that others couldn't touch.

"People love to talk about how Jefferies is the aggressive bank that takes on dodgy deals," Robert Harteveldt, former head of leveraged finance at the firm, said in an interview. "If that were true, then you wouldn't have other banks who want to do the same deals. Of course other banks are not happy, but guess what? To a degree, their hands are tied by the regulators."

Jefferies, owned by Leucadia National Corp. and run by Richard Handler, soared to fifth from outside the top 10 in the rankings for underwriting buyout loans last year, according to data from Dealogic. Since the start of 2014, the bank has managed more than $10 billion of loans for private-equity sponsors that had previously had lending relationships with other banks, data compiled by Bloomberg show. In most of these deals, the leverage levels exceeded lending guidelines.

The Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. introduced those guidelines in March 2013 to curb excessive risk-taking in a market where total outstanding debt swelled to more than $800 billion from $130 billion in 2001, according to Standard & Poor's Capital IQ Leveraged Commentary and Data. The crackdown has contributed to a reduction in fees that banks collect from underwriting the debt.

Executives from at least seven of the top 10 leveraged-loan underwriters in the U.S. have complained to regulators that the deals they deem too risky are still being done by Jefferies, according to people at the firms who asked not to be identified discussing private conversations.

The firms are highlighting leverage levels in those deals that are typically beyond the limits prescribed by the lending guidelines, the people said. The regulators have specifically raised concern over debt that pushes a company's borrowings to more than six times a measure of its earnings.

Only Bank of America Corp., JPMorgan Chase & Co., Deutsche Bank AG and Credit Suisse Group AG were ahead of Jefferies in underwriting buyout loans last year, the Dealogic data show.

Bryan Hubbard, an OCC spokesman, declined to comment on the banks' frustrations. Darren Gersh, a spokesman for the Fed in Washington, also declined to comment.

Jefferies' latest score was the lead job underwriting the debt for Veritas Capital's $2 billion buyout of aircraft maintenance firm StandardAero. The private-equity firm is acquiring the business from Dubai Aerospace Enterprise Ltd.

In addition to Morgan Stanley, Barclays and UBS, Jefferies also beat out Credit Suisse and Royal Bank of Canada, according to two people with knowledge of the matter.

The loan would push StandardAero's total debt to more than seven times a measure of its earnings, higher than what the other banks were willing to provide, the people said. KKR & Co. will help arrange the debt, they said.

Alexandra LaManna, a spokeswoman for Veritas Capital at Sard Verbinnen & Co., declined to comment, as did representatives of Barclays, Credit Suisse, Morgan Stanley, RBC and KKR. A spokeswoman for UBS didn't respond to requests for comment.

Kevin Lockhart, co-head of global leveraged finance at Jefferies in New York, wouldn't comment on the impact that the new lending regulations have had on his business. Instead, he attributed the firm's recent string of successes to things like its "consistent underwriting standards" and "first-class execution and distribution."

Jefferies is also arranging about $1.15 billion for Bain Capital LLC's purchase of software company Blue Coat Holdings and $2 billion in borrowings for Epicor Software Corp., people with knowledge of those deals said. The Epicor debt will help fund a $300 million dividend to its private-equity sponsor, Apax Partners.

Both the Blue Coat and Epicor debt sales would push leverage at the companies to more than seven times. Macquarie Group Ltd. and Nomura Holdings Inc., which are also benefiting from the scrutiny on the biggest underwriters, are helping Jefferies arrange the Epicor debt.

Jefferies seized on the 2008 crisis to expand its leveraged-finance business as three of its biggest competitors — Merrill Lynch & Co., Bear Stearns Cos., and Lehman Brothers Holdings Inc. — disappeared within a year, said Harteveldt, now chief executive officer of hedge fund Trishield Capital Management. Lockhart was hired from Goldman Sachs Group Inc. in 2009.

Not all deals have been successful for Jefferies, and in the last quarter of 2014, the investment bank had to sell loans from at least three companies at a discount, data compiled by Bloomberg show. That debt was arranged for footwear retailer Toms Shoes LLC and software firms Compuware Corp. and Tibco Software Inc.

Arranging such deals have longer-term benefits, though. Jefferies' ability to do more highly levered deals help it forge relationships with private-equity sponsors. So even when it's not leading an offering, the bank can still get a seat at the table with its bigger rivals on less-risky deals.

"The rules are not fair to the regulated banks," John McClain, a money manager at Columbus, Ohio-based Diamond Hill Investment Group, said in a telephone interview. "Markets adjust to what's going on and participants like Jefferies step in to fill a void."

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