Life insurance, reinsurance and annuity executives who have spent the past year battling headlines and anxiety around private credit redemptions may have a new risk to worry about.
Private credit investments that are running out of runway, no longer able to restructure or extend their maturities, will force insurance investors to take markdowns, or, in the worst cases, realized losses, on the private credit they have accumulated over the past several years.
"In the history of amend-and-pretend, rates have bailed borrowers out," said Mike Paniwozik, partner and Global Head of Structured Credit Investing at Apollo to a room full of insurance executives last week. "I don't think, in this instance, rates will bail borrowers out."
