What constitutes an HLT loan has often caused dispute. In October 1989, however, the three U.S. federal bank regulators adopted a definition of an HLT as a loan that (1) involves a buyout, acquisition, or recapitalization and (2) either doubles the company’s liabilities and results in a leverage ratio higher than 50 percent, results in a leverage ratio higher than 75 percent, or is designated as an HLT by a syndication agent.

 LO.1