Banks: OCC guidance forced downgrade of healthy energy loans

Loans with low loss given defaults now considered impaired, lenders complain

Oil and commodities

US prudential regulators may have pushed banks to reclassify scores of healthy loans to energy companies as being at risk of default – forcing lenders to take outsize reserves against loans they view as sound.

Guidance issued by the US Office of the Comptroller of the Currency in March 2016 calls on lenders to take a holistic view of the financial condition of E&P (exploration and production) companies in the energy sector when determining the regulatory classification of their syndicated senior

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