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Loans (Tables)
 12 Months Ended
Dec. 31, 2019
Receivables [Abstract]  
Net Loans
The following table presents our recorded investment in loans, by segment, as of the dates indicated:
(In millions)
December 31, 2019
 
December 31, 2018
Domestic(1):
 
 
 
Commercial and financial:
 
 
 
Loans to investment funds
$
14,546

 
$
15,050

Senior secured bank loans
3,342

 
3,490

Loans to municipalities
848

 
902

Other
26

 
37

Commercial real estate
1,766

 
874

Total domestic
20,528

 
20,353

Foreign(1):
 
 
 
Commercial and financial:
 
 
 
Loans to investment funds
4,662

 
4,505

Senior secured bank loans
1,119

 
931

Total foreign
5,781

 
5,436

Total loans(2)
26,309

 
25,789

Allowance for loan losses
(74
)
 
(67
)
Loans, net of allowance
$
26,235

 
$
25,722


 
 

(1) Domestic and foreign categorization is based on the borrower’s country of domicile.
(2) Includes $3,256 million and $5,444 million of overdrafts as of December 31, 2019 and December 31, 2018, respectively.
Recorded Investment in Each Class of Total Loans and Leases by Credit Quality Indicator
The following tables present our recorded investment in each class of loans by credit quality indicator as of the dates indicated:
December 31, 2019
Commercial and Financial
 
Commercial Real Estate
 
Total Loans 
(In millions)
Investment grade(1)
$
19,501

 
$
1,766

 
$
21,267

Speculative(2)
5,008

 
—

 
5,008

Special mention(3)
25

 
—

 
25

Substandard(4)
9

 
—

 
9

Total
$
24,543

 
$
1,766

 
$
26,309

December 31, 2018
Commercial and Financial

Commercial Real Estate

Total Loans 
(In millions)
Investment grade(1)
$
19,599

 
$
874

 
$
20,473

Speculative(2)
5,308

 
—

 
5,308

Substandard(4)
8

 
—

 
8

Total
$
24,915

 
$
874

 
$
25,789

 
 
(1) Investment grade loans consist of counterparties with strong credit quality and low expected credit risk and probability of default. Ratings apply to counterparties with a strong capacity to support the timely repayment of any financial commitment.
(2) Speculative loans consist of counterparties that face ongoing uncertainties or exposure to business, financial, or economic downturns. However, these counterparties may have financial flexibility or access to financial alternatives, which allow for financial commitments to be met.
(3) Special mention loans consist of counterparties with potential weaknesses that, if uncorrected, may result in deterioration of repayment prospects.
(4) Substandard loans consist of counterparties with well-defined weaknesses that jeopardize repayment with the possibility we will sustain some loss.
Schedule Of Loans And Leases Receivable By Impairment Methodology
The following table presents our recorded investment in loans, disaggregated based on our impairment methodology, as of the dates indicated:
December 31, 2019
Commercial and Financial

Commercial Real Estate

Total Loans 
(In millions)
Loans:





Individually evaluated for impairment(1)
$
25

 
$
—

 
$
25

Collectively evaluated for impairment
24,518

 
1,766

 
26,284

Total
$
24,543

 
$
1,766

 
$
26,309

 
 
 
 
 
 
December 31, 2018
Commercial and Financial
 
Commercial Real Estate
 
Total Loans 
(In millions)
Loans:
 
 
 
 
 
Individually evaluated for impairment(1)
$
8

 
$
—

 
$
8

Collectively evaluated for impairment
24,907

 
874

 
25,781

Total
$
24,915

 
$
874

 
$
25,789

 
 
(1) As of December 31, 2019, we had one loan for $25 million in the commercial and financial segment that was individually evaluated for impairment and deemed to be impaired. We recorded a specific reserve of $1 million on that loan. As of December 31, 2018, we had one loan for $8 million in the commercial and financial segment that was individually evaluated for impairment and deemed to be impaired. We did not record any reserve on this loan, which was subsequently paid in full in January 2019.
Schedule of Activity in the Allowance for Loan Losses
The following table presents activity in the allowance for loan losses for the periods indicated:
 
Years Ended December 31,
(In millions)
2019
 
2018
 
2017
Allowance for loan losses:
Beginning balance
$
67

 
$
54

 
$
53

Provision for loan losses(1)
10

 
15

 
2

Charge-offs(1)
(3
)
 
(2
)
 
(1
)
Ending balance
$
74


$
67


$
54

 
 
(1) The provisions and charge-offs for loans were primarily attributable to exposure to senior secured loans to non-investment grade borrowers, purchased in connection with our loans.