The debt battle on Jamie Dimon’s doorstep

One scoop to start: US energy investment group Kimmeridge has submitted a $6bn offer to buy Ascent Resources, the gas driller at the centre of a legal dispute in which a Middle Eastern sovereign wealth fund accused a US private equity group of self-dealing.

And another thing: Billionaire Steve Cohen has won approval to build a casino in New York, with the city soon set to have three fully fledged gambling facilities for the first time.

In today’s newsletter:

• How JPMorgan angered the private credit barons

• Apollo gets squeamish on software loans

• The bankers behind Hollywood’s megadeal

JPMorgan takes fire in Patrick Drahi’s war

In the distressed debt wars, big banks typically like to play Switzerland.

Money centre financial institutions are busy trading with, lending to and advising big private equity firms and hedge funds, with the total annual fees they earn from this work reaching into the hundreds of millions of dollars.

With so much business on the line, they’re too occupied to go belligerent.

But in serious scrapes, is it even possible to avoid being drawn on to the battlefield? DD’s Eric Platt and Sujeet Indap on Friday told the story of JPMorgan Chase, the biggest bank in the US, taking heat for getting in the middle of the blood sport at Patrick Drahi’s telecoms group Altice USA.

The House of Dimon recently lent $2bn to Altice, which is struggling under the weight of $26bn of debt. But in the course of that messy transaction, collateral that other creditors — Apollo, Ares, Oaktree, BlackRock and hundreds of others — had depended on was moved outside their reach. The JPMorgan financing also torpedoed the covenants creditors had previously secured.

Those creditors are now furious with JPMorgan for enabling what they see as so-called creditor-on-creditor violence, when lenders go at each other as a way of improving their own returns.

The JPMorgan loan isn’t an unusual tactic. But the key difference is that it’s typically executed by a private capital firm such as Angelo Gordon or Centerbridge; not a regal white-shoe bank that claims the ethos of doing “first-class business in a first-class way”.

Of course, we wonder if hard-edged private capital firms should be the judges of decorum. Adding to the hostilities, Kirkland & Ellis is taking fire for its role in the wheeling, dealing and suing going around at Altice.

Expect the parties to be consulting their office copies of The Art of War looking for advice on what to do next.

Apollo grows bearish on private credit’s hottest trade

During the 2010s boom in private equity and private credit, one type of deal carried the way, turning relatively unknown firms into industry giants.

For years loans to software companies had been virtually non-existent on Wall Street because banks were unwilling to lend against companies without tangible assets or profits under standard accounting principles.

Then, in the wake of the 2008 crisis, software was the epicentre of growth for private credit firms as they took a growing share of lending from regulated banks. Many of the largest private credit funds now hold a quarter to a third of their overall assets in software companies.

But one of the world’s largest private capital groups is growing bearish on the sector.

Apollo is rapidly cutting its exposure to software makers and has shorted software loans, warning of the threat that artificial intelligence poses to software companies, the FT scooped this weekend.

Apollo, with more than $900bn in assets, made bets against the loans of companies, including Internet Brands, SonicWall and Perforce, which are owned by large private investment groups KKR, Francisco Partners and Clearlake, respectively, according to sources briefed on the matter.

Apollo’s short bets in the software sector, which lasted through a large part of 2025, have been closed, said a source briefed on the matter.

The investment group entered 2025 with many of its private credit funds holding roughly 20 per cent exposure to software groups, but it has spent the year cutting its exposure. While Apollo executives believe AI may benefit some companies, they think such directional tech bets are growing in risk.

“Technology change is going to cause massive dislocation in the credit market,” said CEO Marc Rowan at a recent conference. “I don’t know whether that’s going to be enterprise software, which could […] benefit or be destroyed by this. As a lender, I’m not sure I want to be there to find out.”

DD readers may want to watch this one closely. Private markets have been rocked by technological changes before. Few PE-owned companies survived the death of malls or the yellow pages.

The rainmakers poised for a Warner Bros windfall

In a year of megadeals and blockbuster fees, the frenzied takeover battle for Warner Bros Discovery is the dream series finale for any investment banker.

The sale, set to be the biggest deal announced this year, involves some of Wall Street’s leading rainmakers: Centerview’s Blair Effron, Evercore co-founder Roger Altman and Moelis’s newly-installed chief executive Navid Mahmoodzadegan.

But the cliffhanger to the drama — Paramount last week submitting a $108bn hostile bid for the whole company in an attempt to gatecrash Netflix’s nearly $83bn deal for the studio and streaming assets — means that not everyone will get their fill.

Netflix took pole position over a frenzied Thanksgiving weekend of dealmaking. Now, bankers face having their Christmas holidays claimed as well, as a December 22 deadline for WBD to opine on Paramount’s hostile offer looms.

“When the NBA players play on Christmas Day, nobody says our holidays are ruined. They say isn’t it great you’re in the NBA,” said an adviser involved in the deal. “This is as good as it gets for investment bankers.”

The best-placed banks are those selling WBD — Allen & Co, Evercore and JPMorgan. They have steered WBD from a share price that had sunk below $8 a year ago to a deal valuing the media group at $30 a share and that may yet rise. Centerview and RedBird Advisors are advising Paramount’s rival bid.

For Moelis, the boutique’s role as Netflix’s main adviser marks a major coup for Mahmoodzadegan, who recently took over from the firm’s eponymous founder Ken Moelis.

The deal also is the capstone of a strong year for Well Fargo, the US consumer bank often thought of as an also-ran in investment banking. It is leading a $59bn bridge loan to fund the lion’s share of the cash portion of Netflix’s deal.

This year Wells also nabbed an advisory role on Union Pacific’s $85bn takeover of railroad company Norfolk Southern.

Job moves

• Simpson Thacher has named 59 new partners from offices including New York, Washington DC and London. The group includes 17 attorneys in the private funds practice and 10 attorneys in the capital markets practice.

• JPMorgan’s global chair of investment banking Jamie Grant is retiring next year, Bloomberg reports.

• Building products group QXO’s chair and CEO Brad Jacobs is stepping down from his role as chair at XPO and GXO Logistics.

• BlackRock has named Rob Jasminski to run a new wealth management partnership with Citigroup. He was previously head of Citi’s investment management unit and brings some of the team with him to BlackRock. Kerry White will succeed him at Citi. She was previously a managing director in the unit.

• Investindustrial has named Alberto Bettoli co-head of operational improvement. He joins from McKinsey & Company where he was a senior partner.

Smart reads

Private jurisdiction Bitcoin investor Olivier Janssens is dreaming up a libertarian community on the Caribbean island of Nevis, the FT reports. Complete with terraces, pools and its own court system.

Hyped up How did the Trump family earn likely more than $350mn on their eponymous digital currencies? Bloomberg’s Businessweek found the memecoin fixers helping the Trumps and others turn water into wine.

Not legal advice As short seller Andrew Left prepares to stand trial on market manipulation charges, he’s turned to an AI chatbot with legal questions, Business Insider reports.

News round-up

AA and RAC private capital owners set to exit roadside recovery businesses (FT)

Digital bank N26 appoints UBS executive as new chief after fresh sanctions (FT)

BlackRock loses second Dutch pension mandate over sustainable investing concerns (FT)

Hikma chief steps down after profit forecast cuts and factory delays (FT)

EY investigated by UK watchdog over Shell audit (FT)

PayPal applies for US banking licence (FT)