A handful of lenders are sitting out KKR’s proposed acquisition of Michael Dell’s landscape company, ValleyCrest, amid concerns that the deal would violate recent regulations designed to reduce risky loans. The deal, announced last week, is being financed with $825 million in debt.

While big banks often sit out smaller deals, the absence of any traditional lenders on the ValleyCrest buyout is noteworthy, because five regulated banks last year funded KKR’s $1.6 billion purchase of Brickman.

Banks generally welcome repeat business from established clients, but Credit Suisse Group, Goldman Sachs, Morgan Stanley, RBC Capital Markets and UBS sat out the ValleyCrest financing after the Brickman deal was criticized by regulators for the amount of debt it put on the company's balance sheet.

Bankers involved say new regulatory scrutiny kept those same lenders off the ValleyCrest deal, which is valued at about $1 billion including debt. The transaction is expected to be financed by lenders not subject to the guidelines.