AI pressure threatens loan performance
Apollo faces elevated downside risk in private credit because AI is pressuring software cash flows and could force higher-rate refinancing that leads to defaults on the firm's underlying loans.
Apollo's private credit book is concentrated in software borrowers whose cash flows face AI disruption, raising the prospect of forced high-rate refinancing and subsequent defaults. Elevated downside risk is embedded in the underlying loan portfolio.
"Investors are Waking Up to the Private Credit Crisis..."