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Atlas SP Partners, the structured credit division of Apollo Global Management Inc., has launched a subsidiary to facilitate borrowing, with three top bond rating agencies awarding it high-grade credit ratings.

The subsidiary, named Atlas Warehouse Lending Company, is designed to provide short-term funding for loans destined for securitization into bonds.

Moody's Ratings, one of the three agencies that granted it an investment-grade rating, reports that Atlas SP anticipates the unit’s loan portfolio to expand from $6 billion to $30 billion within two years.

Apollo acquired Atlas SP from Credit Suisse Group AG last year. Bloomberg reported in August that Jay Kim, who had been overseeing the business since 2016, was stepping down.

Recently, Atlas SP has been raising capital and expanding operations, securing $5 billion in financing from BNP Paribas, with the potential for growth, and $5 billion in equity from institutional investors such as Massachusetts Mutual Life Insurance Co. and the Abu Dhabi Investment Authority.

Additionally, Atlas obtained a broker-dealer license, enabling it to start trading securities.

Moody’s, S&P Global Ratings, and Fitch Ratings each awarded Atlas Warehouse Lending Company the lowest tier of investment-grade ratings.

According to Moody’s, the unit is working to secure a $1 billion revolving line of credit, with the possibility of extending it to $1.5 billion by the year’s end. It already has a $1 billion subscription credit facility set to expire in 2026.

An Atlas SP spokesperson noted, “This milestone further validates our business model and enhances our financial flexibility to better serve our clients.”

Fitch analysts highlighted that AWLC is likely to become the primary funding source for Atlas’s assets.

Historically, Credit Suisse’s securitized products division dates back to the 1980s and was known as one of the bank’s riskiest yet most profitable divisions. Atlas SP is key to Apollo CEO Marc Rowan's goal of building a credit business that can compete with major Wall Street firms.

In recent weeks, Atlas SP has been involved in selling asset-backed bonds tied to Pagaya Technologies Ltd.’s consumer loans and Octane Lending’s financing for powersports equipment, according to Bloomberg News data.

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