Circular
Shared National Credit Results Reflect Large Increase in Credit Commitment Volume and Satisfactory Credit Quality
September 26, 2007
Circular No. 11900

The volume of Shared National Credits (SNC) rose by 21% in 2006, the fastest pace since 1998, reflecting, in part, significant merger and acquisition lending, according to the SNC review results released today by federal bank and thrift regulators.

The 2007 review noted an increase in the volume of criticized credits. However, the volume of criticized credits as a share of total SNC commitments remains low by historical comparison and is indicative of satisfactory credit quality. The review also included an assessment of underwriting standards and practices. Examiners found weakened underwriting standards in the syndicated lending market, particularly in non-investment grade or leveraged credit facilities.

The results of the review—reported by the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision—are based on analyses prepared in the second quarter of 2007.

See the press release for full details.

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