Apollo unit Atlas faces $1.1 billion loss on MFS collapse

Financing vehicles backed by Atlas SP Partners, the structured credit arm of Apollo Global Management, face potential losses of up to 860 million pounds ($1.1 billion) following the collapse of UK property lender Market Financial Solutions earlier this year. Court-appointed administrators from insolvency firm AlixPartners disclosed the figures in filings submitted to Companies House.

Two London-based entities under MFS, Amber Bridging and Zircon Bridging, owe Atlas a combined total of around 970 million pounds. According to the administrators' latest estimates, Atlas may recover between 107 million and 200 million pounds. While provisional, these numbers mark an early effort to quantify creditor losses tied to MFS, which collapsed in February after borrowing more than 2 billion pounds across multiple lenders to fund short-term property loans.

Atlas's exposure to MFS previously prompted HSBC Holdings to record a $400 million writedown, which the bank described as a fraud-related secondary securitisation exposure with a UK financial sponsor. Following the insolvency filing, creditors supported a worldwide freeze on the assets of CEO Paresh Raja and alleged widespread fraud at MFS.

Other lenders also face total losses from the collapse. Avenue Capital Group lent nearly 100 million pounds to Amber Bridging, while TPG provided 44 million pounds to Zircon Bridging. Administrators do not expect either firm to recover any money from those loans. A spokesperson for Atlas did not immediately comment.