Finance
Private credit’s hidden leverage reaches HSBC
HSBC disclosed a $400mn fraud-related charge tied to the collapse of UK mortgage provider Market Financial Solutions, even though the bank did not lend directly to MFS. The FT’s useful angle is the path of exposure: back-leverage connected to Atlas SP, Apollo’s securitised-products unit. That makes the story less a single credit accident than a stress test for private credit’s claim to keep bank risk at arm’s length. Bank debt is still a central engine of the boom, and this loss shows how concentrated risk can travel through structures that look cleaner from a distance.
Source: FT