Barclays (BCS) (BCLYF), Banco Santander (SAN) (BCDRF), and Wells Fargo (WFC) are said to be among the Wall Street lenders exposed to the failed UK mortgage finance firm, Market Financial Solutions.
Apollo Global Management (APO) unit Atlas SP Partners; Jefferies Financial Group (JEF); and Castlelake LP, majority owned by Brookfield (BN), are also exposed to MFS, Bloomberg News reported, citing people familiar with the matter.
This month, the UK-based specialist property finance solutions provider MFS entered into administration.
Barclays and Atlas had helped arrange over £2B of loans to the firm, lending hundreds of millions of dollars, the Thursday, February 26 report noted.
Barclays had about £600M tied up in the matter, a judge overseeing the MFS insolvency case reportedly said at the hearing.
Meanwhile, Atlas was involved as a senior creditor and is pursuing all legal avenues to maximize recoveries on £400M of exposure, a spokesperson told Bloomberg.
Furthermore, Jefferies had an exposure of ~£100M to MFS, according to a person familiar with the matter.
And, Castlelake had arranged a lending facility, which has around £400M outstanding, one of the people reportedly said. However, a Castlelake spokesperson told Bloomberg in an emailed statement that they do not have direct unsecured exposure to MFS.
The MFS issue could increase concerns relating to loose underwriting in credit markets, Bloomberg noted.