More than five months ago, the Federal Reserve and Office of the Comptroller of the Currency (OCC) told some of the biggest banks to improve underwriting standards for non-investment-grade loans. The market is showing few signs of tightening as lenders chase lucrative fees.

Banks are arranging junk-rated deals that leave companies with debt levels exceeding guidelines set by regulators. Among them: the $1.7 billion of loans led by UBS AG and Deutsche Bank AG last month to finance KKR & Co.’s purchase of a majority stake in Sedgwick Claims Management Services Inc., and the $700 million loan Credit Suisse Group AG arranged in January for Applied Systems Inc., a maker of software for insurance companies.

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