On November 7, 2014, the US Board of Governors of the Federal Reserve System (“Federal Reserve Board”), the Federal Deposit Insurance Corporation (“FDIC”) and the Office of the Comptroller of the Currency (“OCC”) issued a document outlining Frequently Asked Questions (“FAQs”) on the March 2013 Interagency Guidance on Leveraged Lending. Topics addressed in the guidance include risk management and reporting, stress testing, underwriting, pipeline managements, methods for determining enterprise value, participations purchased, and a definition of leverage lending. The guidance is applicable to all banks that take  part in leverage lending activities, which includes community banks supervised by the Federal Reserve Board with total consolidated assets of $10 billion or less.

For further details, you may want to read our client note at:

http://www.shearman.com/~/media/Files/NewsInsights/Publications/2014/11/US-Bank-Regulators-Publish-FAQs-and-2014-SNC-Review-of-Leveraged-Lending- FRI-111014.pdf.

The FAQs are available at:

http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20141107a3.pdf.