The past week has brought two notable research pieces on the state of credit. First, last Friday, saw the release of the Shared National Credit (SNC) Review, which discusses risks in the syndicated loan market. Second, this week, Covenant Review compared the credit stats of the largest LBOs of 2007, 2017 and 2018. We dissect both reports below.
Last Wednesday, the Shared National Credit (“SNC”) Review, which assesses credit risk trends in the syndicated loan market, was released. The headline was that riskiness has declined somewhat in the $4.3 trillion portfolio of loan and loan commitments. While that’s fine news, more interesting fare emerged from a deeper dive. To wit, the near-doubling of the leveraged loan portfolio and a warning about how post-close usage of incremental facilities could trigger non-pass originations.
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