Highly Leveraged Transaction Law and Legal Definition
According to 12 CFR 325.2 [Title 12 -- Banks and Banking; Chapter III -- Federal Deposit Insurance Corporation; Subchapter B -- Regulations and Statements of General Policy; Part 325 -- Capital Maintenance; Subpart A -- Minimum Capital Requirements], highly leveraged transaction means “an extension of credit to or investment in a business by an insured depository institution where the financing transaction involves a buyout, acquisition, or recapitalization of an existing business and one of the following criteria is met:
(i) The transaction results in a liabilities-to-assets leverage ratio higher than 75 percent; or
(ii) The transaction at least doubles the subject company's liabilities and results in a liabilities-to-assets leverage ratio higher than 50 percent; or
(iii) The transaction is designated an HLT by a syndication agent or a federal bank regulator.
Legal Definition list
- Highly Erodible Land
- Highly Enriched Uranium
- Highly Confidential Business Information
- Highly Competent Early Childhood Educator
- Highly Compensated Employee [Internal Revenue]
- Highly Leveraged Transaction
- Highly Migratory Fish Stocks
- Highly Qualified Paraprofessional [Education]
- Highly Qualified Teacher
- Highly Restricted Personal Information
- Highly Toxic
Related Legal Terms
- ABC Transaction [Oil & Gas]
- Agency Transaction (Securities)
- Alternative Mortgage Transaction [Banks & Banking]
- Arms Length Transaction
- Asset Exchange or Conversion Transaction
- Automated Transaction
- Basket Transactions
- Bona Fide Hedging Transactions and Positions
- Colorable Transaction
- Commodity Option Transaction
