Mark Walter explored Apollo loan against Lakers stake amid TWG scrutiny

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Walter explored Apollo Lakers loan

Highlights

Mark Walter held multibillion-dollar loan talks with Apollo Global Management against his Lakers stake before announcing a $12.5 billion Lakers stake sale last week.
Federal prosecutors are probing TWG over more than $20 billion in undisclosed related-party loans, prompting Delaware Life to swap $6.5 billion in affiliate assets for unrelated investments.
Guggenheim's 2031 term loan dropped to 83 cents on the dollar after a surprise second-quarter revenue decline, prompting a lender call scheduled for Wednesday.

Financing talks and asset sales

As first reported by the Financial Times, Walter holds discussions with Apollo Global Management about a multibillion-dollar loan secured against his Lakers stake while he looks for cash this year. People familiar with the matter say the talks run through the summer and continue until former Disney chief executive Bob Iger and venture capitalist Josh Kushner offer to buy Walter's holding in the NBA franchise.

The Apollo financing talks are overtaken by the deal announced last week under which the Guggenheim Partners chief executive agrees to sell his majority stake in the Lakers for $12.5 billion. Walter is also in talks to sell his stake in Chelsea Football Club, adding to signs that he is reshaping parts of a sports portfolio that also includes control of Major League Baseball's LA Dodgers.

Representatives for TWG and Walter do not respond to requests for comment. Apollo and Guggenheim decline to comment.

Regulatory pressure and market fallout

Federal prosecutors are examining whether investment practices across Walter's insurance-to-asset-management empire comply with U.S. law, placing TWG at the center of a widening Wall Street controversy. After receiving subpoenas this year from U.S. prosecutors, insurers controlled by Walter reveal they have made more than $20 billion in loans to related parties without disclosing their links to those borrowers.

According to people with knowledge of the matter, TWG is working to clean up the balance sheets of its insurance subsidiaries under a plan agreed with regulators. Delaware Life, one of the insurers Walter controls, says on Tuesday that it reaches an agreement to exchange $6.5 billion in assets tied to TWG corporate affiliates for unrelated investments, although Delaware Life and another TWG-controlled insurer still retain more than $10 billion in affiliated investments.

The scrutiny is raising broader questions about a private investment industry that increasingly uses insurance capital to fund alternative assets. A separate Guggenheim unit is set to host a call with some lenders on Wednesday after an unexpected second-quarter revenue decline from a year earlier, and its term loan due in 2031 falls to 83 cents on the dollar on Tuesday.

WT Holdings’ insurance subsidiaries recently kept their existing ratings, reflecting improving underwriting performance and stronger capital positions at key units. Our earlier article highlighted that Stillwater’s combined ratio and surplus had improved, while Evergreen showed steady profitability and a de-risking shift toward fixed income, even as both remained constrained by catastrophe exposure, concentration risks, and investment-risk sensitivities.

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