Company: WFC-PC
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000072971-25-000129
Chunk: 53

Company: WELLS FARGO & COMPANY/MN
Filing Date: 2025-04-29
Form: 10-Q
Item: Item 1
Chunk 53
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 millions)Protection soldProtection sold – non-investment gradeMarch 31, 2025Credit default swaps$14,138 1,270 Risk participation swaps5,765 3,655 Total credit derivatives$19,903 4,925 December 31, 2024 Credit default swaps$10,516 684 Risk participation swaps6,007 3,779 Total credit derivatives$16,523 4,463 Protection sold represents the estimated maximum exposure to loss that would be incurred if, upon an event of default, the value of our interests and any associated collateral declined to zero, and does not take into consideration any recovery value from the referenced obligation or offset from collateral held or any economic hedges.The amounts under non-investment grade represent the notional amounts of those credit derivatives on which we have a higher risk of being required to perform under the terms of the credit derivative and are a function of the underlying assets.We consider the credit risk to be low if the underlying assets under the credit derivative have an external rating that is investment grade. If an external rating is not available, we classify the credit derivative as non-investment grade.Our maximum exposure to sold credit derivatives is managed through posted collateral, which may include cash and non-cash collateral, and purchased credit derivatives with identical or similar reference positions in order to achieve our desired credit risk profile. Our credit risk management approach is designed to provide the ability to recover amounts that would be paid under sold credit derivatives.Credit-Risk Contingent FeaturesCertain of our derivative contracts contain provisions whereby if the credit rating of our debt were to be downgraded by certain major credit rating agencies, the counterparty could demand additional collateral or require termination or replacement of derivative instruments in a net liability position. Table 11.10 illustrates our exposure to OTC bilateral derivative contracts with credit-risk contingent features, collateral we have posted, and the additional collateral we would be required to post if the credit rating of our debt was downgraded below investment grade.Table 11.10:  Credit-Risk Contingent Features(in billions)Mar 31,2025Dec 31,2024Net derivative liabilities with credit-risk contingent features$24.3 23.8 Collateral posted21.6 19.8 Additional collateral to be posted upon a below investment grade credit rating (1)2.7 4.1 (1)Any credit rating below investment grade requires us to post the maximum amount of collateral.

Wells Fargo & Company95

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