PNC discloses $7bn exposure to private credit firms

PNC Financial Services has revealed that it has approximately $7bn in exposure to private credit managers, as banks provide greater transparency around their links to the fast-growing asset class, according to a report by Bloomberg.

The report cites the bank’s latest investor materials as showing that disclosure forms part of a broader $33bn portfolio of lending to business credit intermediaries. This segment sits within a wider $73bn allocation to non-depository financial institutions.

A significant portion of that overall exposure – around $26bn – relates to securitised lending backed by assets such as receivables and leases.

PNC indicated that the majority of its financing to private credit funds is structured through securitised vehicles, primarily collateralised loan obligations. These facilities are typically investment-grade and supported by diversified pools of senior secured leveraged loans.

Banks’ connections to non-bank financial institutions have come under closer scrutiny in recent months, as investors assess whether stress in private credit markets could spill over into the traditional banking system. Concerns have centred in part on underlying loan quality and exposure to sectors facing disruption from artificial intelligence, including software.

PNC has previously disclosed that its exposure to the software sector exceeds $5bn.