HSBC halts high-risk private credit financing

RegulationCorporate Action
โดย Private Banker International·Read original
Summary · why it matters

HSBC has suspended high-risk private credit financing following major corporate insolvencies that exposed weak industry underwriting, the Financial Times reported citing sources. The UK-headquartered banking giant recently informed clients it will not renew facilities for private credit funds that fail to deliver sufficient returns to justify the risk, shifting its focus to more stable funds. An insider said HSBC is adjusting its risk tolerance by cutting back leverage for certain clients while maintaining other services. This pullback mirrors moves by Barclays, whose chief executive noted in April the bank was constraining lending to certain structured finance counterparties. Both British banks re-evaluated their positions after the £2 billion collapse of bridging lender Market Financial Solutions amid fraud allegations, with Barclays provisioning £228 million for related losses and HSBC taking a $400 million charge due to its exposure via Apollo's Atlas SP unit.

Impact on stocks 3

Financials▼ · 2 stocks
HSBC Holdings PLC
HSBA
▼ NegativeCapitalrelevance

HSBC suspended high-risk private credit financing and took a $400 million charge due to exposure via Apollo's Atlas SP unit.

Barclays PLC
BARC
▼ NegativeCapitalrelevance

Barclays is also pulling back from private credit lending and took a £228 million provision for losses related to Market Financial Solutions collapse.

Aging Population▼ · 1 stocks
Apollo Global Management LLC Class A
APO
▼ NegativeCapitalrelevance

HSBC's pullback from private credit financing, including exposure via Apollo's Atlas SP unit, led to a $400 million charge for HSBC, indicating potential negative impact on Apollo's business.

Off-coverage companies 1

Market Financial Solutions LtdPrivate▼ Negative
Capitalrelevance

Market Financial Solutions collapsed with £2 billion in losses amid fraud allegations, triggering provisions for Barclays and HSBC.

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