Life Insurers Now Dominate Private Credit, as Mark Walter Scrutiny Grows

Editor’s Note: The Americas Special Sits and Distressed Weekly will not be published on Friday, Sept 4. It will resume on Friday, Sept 11.

This week as market participants continued to digest the news around Mark Walter and two of the life insurance companies under his control, Octus’ Jared Muroff took a look at some of the reasons life insurers have become some of the largest players in private credit.

A growing share of the money backing private credit is coming not from banks and CLOs, but from life insurer balance sheets, funded by retail annuity buyers and governed by capital rules, which treat this leverage more favorably than the alternatives. Private equity-owned insurers are driving the growth in life insurer allocations to private credit, doubling the sector’s exposure over the past decade to $849 billion from $386 billion. A June 2025 paper from the Chicago Federal Reserve notes that 61% of this growth stems from the private equity-owned insurers’ market share of annuities and their greater access to private credit investments through affiliated issuers.

Multiyear guaranteed annuities, or MYGAs, have become a key funding tool in this strategy, letting insurers lock up retail capital for terms of three to 10 years at costs that can rival or beat institutional leverage routes such as back leverage or CLOs. Fixed-rate annuity sales nearly tripled over the past five years to almost $161 billion in 2025 from about $55 billion in 2020, per the Life Insurance Marketing and Research Association.

The dynamic is reinforced by regulatory capital treatment under NAIC risk-based capital standards, which require only a single rating to set a loan’s capital charge, a threshold that has drawn scrutiny toward raters such as Egan-Jones and toward related-party investment practices at insurers including those controlled by TWG Global.

The use of insurance company balance sheets to make related-party investments, and how those are ultimately disclosed, underlies the recent investigations into Mark Walter and his TWG Global-controlled entities, including Guggenheim Investments. This week, Octus published a deep dive into the situation, including an in-depth analysis of Guggenheim’s asset management business and a detailed overview of TWG’s portfolio. Among other things, this analysis found that Walter-controlled insurers account for just 1% of Guggenheim’s assets under management. Octus’ ongoing coverage of Guggenheim is available HERE.
 

Americas Court Opinion Review

In the latest installment of the Court Opinion Review, we discuss EchoStar’s DISH DBS/DISH Wireless and Hughes Satellite mess, the Trinseo/CastleKnight trial and another chapter 15 frontier in Grupo Antolin, and First Brands gets sent to chapter 7. Read the Court Opinion Review HERE.
 

Gogo

The in-flight internet provider is in confidential talks with lenders over a potential amend-and-extend transaction ahead of 2028 maturities as SpaceX’s Starlink erodes its market share. Gogo cut its 2026 adjusted EBITDA guidance to a range of $175 million to $185 million from a range of $198 million to $218 million earlier this month after reporting that second-quarter adjusted EBITDA fell 13% year over year to $53.7 million. An ad hoc lender group is working with Gibson Dunn while Gogo is advised by GLC Advisors. Octus’ coverage of Gogo is HERE.

Brightspeed

Brightspeed’s second-out term lenders are discussing a cooperation agreement as the Apollo Global Management-backed telecom is expected to raise capital through a potential securitization to bridge toward a sale to a strategic buyer. The co-op is expected to be circulated and signed in the coming weeks and would be open to all to join on a pro-rata basis. Second-out creditors are represented by Davis Polk while Centerview Partners is the group’s investment banker. Octus’ coverage of Brightspeed is HERE.

FXI Holdings

The foam-products maker’s second-quarter adjusted EBITDA rose 36% year over year to $49 million as revenue climbed 11% to $319 million. Second-quarter earnings came in much better than they did in the first quarter, with the growth pushing net leverage down to 9.3x from 9.9x. Investors are watching whether FXI can sustain the improvement and make good on a requirement to raise $140 million of junior capital by November 2027 that will be used to pay down debt. Octus’ coverage of FXI Holdings is HERE.
 

Cable One

Holders of Cable One’s 1.125% unsecured notes due 2028 are working with Akin Gump as legal advisor while holders of its 4% unsecured notes due 2030 are represented by Davis Polk. Creditors are bracing for a potential liability management exercise as the company faces a put obligation tied to Mega Broadband and debt maturities in its own capital structure as well as in Mega Broadband, of which it currently owns 45%.

Bankers at JPMorgan have reached out to prospective lenders to gauge interest in providing a new first-out loan to facilitate an amend-and-extend of Cable One’s first lien debt, although prospective investors want a coupon well above the 12% the company has in mind. Octus’ coverage of Cable One is HERE.

Merlin Entertainments Group

Merlin Entertainments has retained PJT Partners as a financial advisor as it looks to address its nearly $4 billion debt, with upcoming maturities in 2027. The company, backed by Blackstone, Kirkbi and CPP Investments, is exploring various refinancing options including a deal-away, and has received multiple funding proposals from both existing and prospective creditors.

One iteration of a term sheet from existing creditors featured a pari-plus style transaction. So far, Blackstone has not engaged with Gibson Dunn, which is working with a group of bondholders representing about 60% of the company’s senior secured debt.. Octus’ coverage of Merlin Entertainments Group is HERE.

Springs Window Fashions

The Clearlake Capital-backed window and drapery maker is working with Simpson Thacher as legal advisor and Alvarez & Marsal as financial advisor. Persistent subdued construction and remodeling activity has led to revenue and EBITDA declines as well as liquidity pressures. Its earnings continued to slide during the second quarter, with adjusted EBITDA down 25% year over year and liquidity down to $217 million. Its $1.5 billion term loan due 2028 was last indicated at 48.5, down from 54 three months earlier. Octus’ coverage of Springs Window Fashions is HERE.
 

First Brands Group

Judge Christopher Lopez denied confirmation of the First Brands Group debtors’ joint liquidating plan at a hearing on Aug. 24 and directed conversion of the chapter 11 cases to chapter 7 liquidation. Judge Lopez found that the plan does not offer a feasible path to pay administrative and priority claims and lacks impaired consenting classes at First Brands Group Holdings and Viceroy Private Capital, sustaining objections from special purpose vehicle lenders, factoring parties, the U.S. Trustee and the chapter 7 trustee for the converted SPV debtors,

The judge also found that the DIP lenders’ credit bid for estate claims included assets outside the scope of their DIP collateral and was not market-tested in a process that gave potential third-party bidders due process. The judge noted that the debtors have run out of DIP funding and lack litigation funding and that “the current plan can’t be tweaked to provide a viable path.” We provided live updates from the bench ruling. Octus’ First Brands coverage is HERE.

DISH DBS and DISH Wireless

On Aug. 27, the DISH DBS/DISH Wireless debtors announced that they intend to bifurcate their joint prepackaged plan into separate plans for DISH DBS’ consensual restructuring and DISH Wireless’ contested liquidation. The DISH DBS debtors will seek confirmation of their plan prior to an Oct. 28 deadline in the restructuring support agreement, while the DISH Wireless debtors will focus on merits objections to more than $8 billion in tower lessor claims, with confirmation in early December.

DISH DBS, which is EchoStar’s pay-TV business, and an ad hoc noteholder group executed the RSA in March, but DISH Wireless, which is EchoStar’s mobile business, joined the pact a few days before the two silos filed together and proposed a joint plan and confirmation schedule. The RSA allows the debtors to bifurcate the plan into separate plans for DISH DBS and DISH Wireless. Creditor resistance to the DISH Wireless plan and proposed asset sale to EchoStar appears to have forced the debtors to make that election. Octus’ EchoStar coverage is HERE.
 

Meta Settlement With States

Meta and a coalition of states reached a settlement resolving the states’ claims that the social media giant misled the public regarding Instagram’s and Facebook’s addiction risks for children and teens. Meta agreed to implement age assurance measures and time management tools and to pay the settling states up to $17 billion, although many of the provisions are contingent on similar commitments from competitors such as TikTok and YouTube. Octus’ coverage of Meta is HERE.

US-Canada Trade War

Following a last-minute breakdown in trade negotiations, the United States imposed 50% section 338 tariffs on about $20 billion of Canadian products. Canada responded with plans of “dollar-for-dollar” retaliatory tariffs effective Sept. 8. President Donald Trump also threatened to double section 232 tariffs on Canadian automobiles, trucks and parts to 50% effective Jan. 1, 2027. Octus’ coverage of Tariff Policy & Impact is HERE.

FTC Settlement With Zillow, Redfin

The Federal Trade Commission and five states settled their suit challenging Zillow and Redfin’s rental listing partnership shortly before a federal antitrust trial was scheduled to begin. The settlement requires Redfin to reenter the market internet listing services after Zillow paid $100 million for Redfin to shut those offerings in a 2025 syndication agreement. Octus’ coverage of Zillow is HERE.