Apollo, KKR See Record-Wide Gap on Valuing Stressed Private Loan

An Apollo Global Management Inc. private credit fund deemed a loan to Medallia Inc. worth 77 cents on the dollar, a level typically considered distressed. A rival fund co-managed by Future Standard and KKR & Co. offered a very different assessment: 91 cents.

It’s the largest gap yet in valuations of the software company’s direct loan, according to regulatory filings reviewed by Bloomberg. And, for private credit skeptics, it’s another example of how lenders may have too much discretion in determining the value of their investments.

Large differences in loan valuations are still rare in private credit, but have become ...