CEIS’ Leveraged Loan Reviews cover the adequacy of the Bank’s analytical coverage of the 10 leveraged loan performance indicators that are in accordance with Interagency Guidance on Leveraged Lending issued March 22, 2013. As part of CEIS’ review of this loan segment, certain leveraged loan performance indicators are examined by CEIS at initial underwriting, at the most recent Bank quarterly review, and at the annual review. These performance indicators are regarded as important analytical considerations in forming both an initial opinion of credit risk as well as maintaining a current assessment of transaction progress, and the assigned grade.
The 10 leveraged loan performance indicators are: 1) transaction structure; 2) repayment capacity – primary; 3) repayment capacity – secondary; 4) performance to plan; 5) sensitivity analysis; 6) enterprise value analysis; 7) capacity to de-lever analysis; 8) borrower leverage; 9) borrower liquidity; and 10) refinance risk. These 10 performance indicators are deemed required analytical considerations by the banking regulators.
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The subsequently leveraged loan review report will detail the findings of the review, including a summary of observations and recommendations as well as conclusions supported by a written report on each loan reviewed.
CEIS’ Specialty Finance Reviews address middle market non-investment grade leveraged finance, traditional and non-traditional commercial real estate finance, asset-based lending, and cash-flow enterprise value lending. Asset classes include both senior and subordinated debt across broad industry categories.
These programs are implemented by experienced bankers who have senior or executive level management experience along with specialty expertise. As with all CEIS Loan Review Programs, the review will assess the sufficiency and reliability of the credit and investment risk rating system, underwriting, loan approval and monitoring, the effectiveness of credit and loan administration, legal documentation, and adequacy of asset valuations and specific loan loss reserves.
CEIS Leveraged Loan & Specialized Finance Review programs are customized to the client’s needs and each assignment is prioritized for a quick turnaround. Our loan review consultants work closely with the client up-front to establish the scope of the review, which is then structured so that a written report is delivered shortly after completing the on-site assessment. The subsequently leveraged loan/specialty finance review report will detail the findings of the review, including a summary of observations and conclusions supported by a written report on each loan and investment reviewed.