Tuesday, 21 February 2017
Last updated 3 days ago
Mar 3 2014 | 11:59am ET
Apollo Global Management founder Leon Black doesn’t want the government telling him how much he can borrow to buy a company.
Black said he opposed a proposal by the Federal Reserve and Office of the Comptroller of the Currency that would keep banks from issuing senior debt in leveraged buyouts worth more than six times a company's cash flow.
"To have a blanket number like that is micromanaging too much from a regulatory point of view," Black told a private equity conference at Columbia Business School last week. "Different industries have different rates of growth."
The Fed and OCC in September began to warn banks that high-risk loan performance would play a big role in the "stress tests" that determine whether a bank has a sufficient capital ratio. The regulators said that their annual review of leveraged loans found 42% had a deficiency that could lead to a loss.