One Filing Just Changed The SpaceX IPO Forever
Dear Friend,
SpaceX filed its S-1.
June 12 is now confirmed. $75 billion. Ticker SPCX. The largest IPO in history.
You will not get shares. The 21-bank syndicate already locked them up.
But the S-1 just exposed the one company Musk cannot operate without.
It's publicly traded. It's still cheap. And in 22 days, the whole world will know its name.
Dylan Jovine is giving it away — free — before the window closes.
“The Buck Stops Here,”
Kelly Maguire
Behind the Markets
Wednesday, June 10, 2026
How Banks Lend Without Lending
Almost no loans are late, but that measures the wrong thing.
The safest loan category in American banking has a 0.15% delinquency rate. The number comes from the FDIC's 2026 Risk Review. It describes bank lending to nonbank financial firms. These are companies that make loans but are not banks. Private credit funds, mortgage lenders and finance companies.
This category grew from $56 billion in 2010 to $1.4 trillion today. A 22% annual growth rate. Triple the pace of any other loan type in the system.
The 0.15% says these loans perform well. Almost none are late. But the number only measures loans already made. Behind them sits $987 billion in credit lines waiting to be drawn.
The Big Idea
The drawn loans look safe. The undrawn credit lines behind them are a dormant claim on bank liquidity. In a downturn, nonbank firms pull those lines at the same time. That is the risk the 0.15% does not measure.
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Ten… twenty… even thirty years…
Into a single 24-hour window?
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But Elon Musk is about to make it a reality with something I'm calling…
How the Side Door Opened
In 2013, federal regulators tightened rules on leveraged lending. Banks pulled back from loans to highly indebted companies. The demand did not disappear. Nonbank firms stepped in. Private credit funds filled the gap.
Banks found another route. They stopped lending to risky borrowers directly. Instead, they lent to the nonbank firms doing that lending. Jill Cetina, a former vice president at the Federal Reserve Bank of Dallas, described the result. The 2013 guidance blocked direct lending to leveraged borrowers. But banks still funded firms that channeled money "to the same higher-risk obligors." The lending did not stop. It moved one step from bank balance sheets.
Observation: The 2013 leveraged lending guidance restricted direct bank lending to highly indebted companies.
Interpretation: Banks shifted the exposure one layer out. They lent to the nonbank firms that now originate those same loans.
Why Banks Keep Building This Position
Risk weights drive the incentive. Regulators assign a 20% risk weight to most loans to nonbank firms. That means banks hold far less capital against them. On paper, the position looks efficient.
Cetina flagged the gap. Banks label these loans low risk. But the economics, she said, may be "more akin to leveraged lending." Boards need to recognize the difference.
The position is concentrated at a handful of banks. Ten banks hold 71% of all these loans. Those with over $100 billion in assets hold 86%. Tier 1 capital is the core cushion a bank holds against losses. At those largest banks, this lending now equals 68.1% of that cushion. In 2010, it was 5.7%.
Observation: This lending rose from 5.7% to 68.1% of tier 1 capital at the largest banks since 2010.
Interpretation: A low risk weight encourages large positions. The exposure concentrates at the same institutions.
The Claim Nobody Sees
Think of an undrawn credit line as a pipe connected to a reservoir. In calm weather, the pipe sits idle. The reservoir stays full. In a storm, every pipe opens at once.
The FDIC reported $987 billion in unfunded commitments to nonbank firms. The figure is from the third quarter of 2025. That equals 42.9% of total commitments to these borrowers. These are revolving credit lines. They can be drawn at any time.
The FDIC described what happens in a downturn. Nonbank firms need cash fast. Their collateral drops in value. Lenders demand more. They sell assets. Prices drop further. Then they pull their credit lines from the same banks that extended them.
The 0.15% delinquency rate measures fair weather. It cannot measure $987 billion in credit lines drawn at once. All firms are facing the same stress. From the same small group of banks.
Observation: Unfunded commitments to nonbank firms totaled $987 billion in Q3 2025, or 42.9% of total commitments.
Interpretation: These dormant lines become immediate cash demands during stress. Standard credit metrics do not capture that risk.
Quick Hits
Bank lending to nonbank firms grew from $56 billion in 2010 to $1.4 trillion today.
The annual growth rate is 22%, triple any other loan category.
The delinquency rate on these loans is 0.15%.
Behind the funded loans sits $987 billion in undrawn credit lines.
Ten banks hold 71% of total exposure.
At the largest banks, this lending equals 68.1% of tier 1 capital and reserves. In 2010, it was 5.7%.
New federal reporting rules now require banks to break out this lending by category.
What Undrawn Commitments Mean for the Banking System
New reporting rules are the signal to watch. In 2024, regulators finalized new requirements for banks with assets above $10 billion. Quarterly filings must now break out nonbank lending into five categories. The first filings have arrived.
Before this, regulators could see the total. Now they can see the parts. The FDIC reported that 57% goes to firms that borrow in order to re-lend. Private equity fund loans make up 24%.
Watch the ten banks that hold 71% of exposure. If undrawn commitments keep growing, the dormant claim on bank liquidity gets larger each quarter. The data to track it now exists.
The Map So Far
The drawn loans read 0.15% delinquent. That measures fair weather. The $987 billion in undrawn lines measures the pipes connected to the reservoir.
Until next time,
The Navigator
