Apollo purchases SMBC's $1.5 billion Individual Guarantee (IG) loan portfolio
Sumitomo Mitsui Banking Corporation (SMBC) has taken a significant step forward in its private credit strategy, announcing a joint venture with Monroe Capital and MA Asset Management. This partnership, worth $1.7 billion, aims to provide senior secured loans to U.S. middle market borrowers, backed by top-tier private equity owners [1][4].
The move is part of SMBC's ambition to expand its presence in the private credit space. The bank sees potential in this growing asset class and is committed to capital deployment towards private credit opportunities. According to Glenn Autorino, a managing director at SMBC Americas, this partnership represents an "important strategic milestone" in developing the bank's private credit business [1][4].
In a separate transaction, SMBC sold a $1.5 billion portfolio of Asia Pacific investment-grade loans to Apollo Global Management. This sale was primarily aimed at freeing up capital and reducing risk-weighted assets, helping the bank satisfy regulatory capital requirements and cut down on assets that were deemed less cost-effective relative to the returns generated [1].
It's worth noting that banks, like SMBC, are required to maintain a sufficient capital buffer to mitigate risks and satisfy regulatory requirements. Risk-weighted assets, which include loans or bonds given a weighting according to their inherent risk, play a crucial role in this context [2].
The joint venture is not related to the sale of SMBC's $1.5bn portfolio, nor does it seem to be connected to the launch of SMBC's €450m European middle market credit fund, as mentioned in a separate report [3].
In summary, SMBC's strategic decisions, including the sale of its Asia Pacific portfolio and the new joint venture, underscore a commitment to growing its private credit footprint. By leveraging partnerships, the bank is positioning itself to tap into the expanding private credit market [1][4].
Sources: [1] Sumitomo Mitsui Banking Corporation Press Release, May 2025 [2] Bank of England, 'Understanding Risk-Weighted Assets', 2020 [3] Financial Times, 'SMBC Launches €450m European Middle Market Credit Fund', June 2025 [4] Monroe Capital Press Release, May 2025
The joint venture is a part of SMBC's strategy to grow its private credit business, focusing on the U.S. middle market borrowers. This venture, worth $1.7 billion, aims to deploy capital towards private credit opportunities in the growing asset class. Meanwhile, the sale of SMBC's $1.5 billion Asia Pacific investment-grade loans to Apollo Global Management was intended to free up capital and reduce risk-weighted assets, aligning with the bank's regulatory requirements.
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