A report from American regulators shows that the percentage of large American syndicated loans rated as problematic have nearly tripled, according to The Financial Times.
The report says the numbers reflect the consequences of lax underwriting rules during the private equity boom.
“Examiners found an inordinate volume of syndicated loans with weak underwriting characteristics,” the report said. “The most commonly cited types of structurally weak underwriting were liberal repayment terms, repayment dependent on refinancing or recapitalisation, and non-existent or weak loan covenants.”