Top US financiers have warned of a deterioration in lending standards after the recent collapses of car parts maker First Brands Group and subprime auto lender Tricolor Holdings, as reported by the Financial Times.
The failure of the companies, both of which relied heavily on private credit, inflicted heavy losses on investors, including Blackstone and PGIM, and banks such as Jefferies. The incident has brought renewed scrutiny of opaque private debt structures and highly leveraged borrowers. At the FT Private Capital Summit in London, Marc Rowan, CEO of Apollo Global Management, said the failures reflected years of lenders chasing riskier borrowers, noting that “a desire to win in a competitive market sometimes leads to shortcuts.”
This content is available to paid Members of Starling Insights.
If you are a Member of Starling Insights, you can sign in below to access this item.
If you are not a member, please consider joining Starling Insights to support our work and get access to our entire platform. Enjoy hundreds of articles and related content from past editions of the Compendium, special video and print reports, as well as Starling's observations and comments on current issues in culture & conduct risk management.
Join The Discussion
Sign in and be the first to comment.