Fed’s Loan Scrutiny Leaves Banks Passing on Buyout Deals

Heightened U.S. regulatory scrutiny of leveraged lending is leading the biggest banks to back away from funding some takeovers financed by debt, creating an opportunity for smaller competitors to step in.

JPMorgan Chase & Co., Bank of America Corp., Credit Suisse Group AG, Deutsche Bank AG, Barclays Plc and Morgan Stanley are among banks that have passed on the chance to fund deals the past few months, according to people with knowledge of the matter who asked not to be identified because they weren’t authorized to speak publicly.