Companies backed by Apollo Global Management are paying significantly higher borrowing costs in the corporate loan market compared to their private equity peers, according to new research by two U.S. academics. The study, authored by Vince Buccola of the University of Chicago and Greg Nini of Drexel University, finds that loans associated with Apollo-led deals carry roughly a one percentage point premium over those linked to other sponsors.
The paper, titled *The Sponsor Premium*, attributes this cost differential to Apollo’s reputation for aggressive creditor negotiations and tough stances in restructuring processes. Over a sample of nearly 2,000 leveraged loans issued between 2016 and 2025, the typical loan yielded just over 7 percent, making Apollo’s additional premium a sizeable expense for borrowers.
Buccola and Nini’s econometric analysis shows that borrower traits like leverage and credit rating explain about 79 percent of loan yield variation. However, when factoring in sponsor reputation, the explanatory power rises to 84 percent. Apollo, headquartered in New York, is described in market lore as the sponsor most closely linked with rigorous treatment of lenders.
The firm’s contentious involvement in high-profile cases such as the 2015 bankruptcy of Caesars Entertainment, owner of Caesars Palace in Las Vegas, has contributed to its tough image. The restructuring triggered disputes with major creditors like Appaloosa Management, Oaktree Capital, and Elliott Management. Ultimately, Apollo paid billions to settle lawsuits alleging fraudulent transfers and breaches of fiduciary duty related to casino assets.
Following the Caesars dispute, Apollo engaged in efforts to improve relations with asset managers by holding individual meetings to address creditor concerns. The company has consistently asserted that its approach reflects exercising contractual rights designed to protect investors’ interests, rather than unfair treatment.
The study also references a 2016 case involving Core Entertainment Group, former producer of *American Idol*, where creditors accused Apollo of “asset stripping” during bankruptcy proceedings. It notes that other firms have similarly acquired reputations for aggressively contesting creditors in distressed situations.
Responding to the findings, Apollo emphasized that relying on a single transaction from over a decade ago may distort the analysis and downplay broader facts. The firm pointed out that its portfolio companies secure competitive borrowing rates and maintain strong support within the lending community.
Apollo ranks among the world’s largest corporate buyout investors, managing approximately $200 billion in private equity assets and another $80 billion in credit investments, which it views as a key growth area. Its multifaceted operations sometimes place it in the position of a major lender to businesses undergoing complex debt restructurings.
This year, Apollo-led bondholders voiced criticism in an ongoing legal dispute with Optivum Communications, controlled by French billionaire Patrick Drahi, condemning what they described as “opportunistic maneuvers” that favor particular creditors and the damaging brinkmanship often seen in restructuring battles.