The Federal Deposit Insurance Corporation, Federal Reserve Board, and Office of the Comptroller of the Currency published the 2024 Shared National Credit (SNC) Program Report, concluding that credit risk in large, syndicated bank loans remains moderate, while noting continued weakening in credit quality trends as higher interest rates pressure leveraged borrowers and compress operating margins in some sectors. The review covered SNC loans originated on or before June 30, 2024 and examined shared loan commitments of USD 100 million or more held by multiple regulated financial institutions, with a focus on leveraged loans and stressed borrowers across industries. The portfolio comprised 6,699 borrowers and USD 6.5 trillion in commitments, up 1.8% year on year. “Non-pass” commitments rated “special mention” or “classified” increased to 9.1% of total commitments from 8.9% a year earlier; while U.S. banks hold 45% of total SNC commitments, they hold 23% of non-pass loans. Nearly half of SNC commitments are leveraged, and leveraged loans account for 79% of non-pass commitments. The agencies added that the magnitude and direction of risk in 2025 is likely to be affected by borrowers’ ability to manage interest expenses, real estate conditions, and other macroeconomic factors.
Office of the Comptroller of the Currency 2025-03-10
Federal Deposit Insurance Corporation, Federal Reserve Board and Office of the Comptroller of the Currency publish 2024 Shared National Credit report finding moderate risk and non-pass commitments rising to 9.1 percent
The Federal Deposit Insurance Corporation, Federal Reserve Board, and Office of the Comptroller of the Currency released the 2024 Shared National Credit Program Report, indicating moderate credit risk in large syndicated bank loans but noting weakening credit quality trends due to higher interest rates. The report reviewed USD 6.5 trillion in commitments, with "non-pass" commitments rising to 9.1% and leveraged loans comprising 79%. The agencies highlighted that 2025 risk levels will depend on borrowers' management of interest expenses and macroeconomic conditions.