Private markets firm Apollo is considering a move into Credit Suisse's revamped investment bank. It would be the New York-based firm's second act with Credit Suisse.

Apollo Global Management is in talks to back the leveraged finance business of spinoff investment bank CS First Boston with $750 million, according to a «Bloomberg» (behind paywall) story Thursday citing people familiar.

By entering the lending business with already heavily indebted companies, the New York-based alternative asset manager would complement the Swiss bank as a provider of capital to the newly formed investment bank.

Saudi Crown Prince's Interest

Such an investment would be a further commitment by Apollo to Credit Suisse. The US private markets behemoth also wants to take over the Swiss bank's securitized products unit and is also interested in its sector financial subsidiary.

According to earlier media reports, Saudi Crown Prince Mohammed bin Salman and New York-based Atlas Merchant Capital have also expressed interest in investing in CS First Boston.

Lavish Seed Capital

A joint financial contribution from Apollo and Credit Suisse would provide CS First Boston with about $1.5 billion of capital, according to the «Bloomberg» story, providing a capital base with the capacity to lend about $7.5 billion to B-rated borrowers.

Apollo's discussions would run in parallel and separate from discussions on a possible co-ownership of CS First Boston. No agreement has yet been reached for either transaction, it said. As long as the terms are not fixed, a failure of the negotiations cannot be ruled out.

Exit via IPO

Credit Suisse's new strategy is to spin off businesses such as capital markets, advisory, and leveraged finance into a «super boutique» with CS First Boston. It is seeking a long-term partnership with the revamped investment bank, while at the same time holding out the prospect of a possible CS First Boston IPO at the end of 2024 at the earliest.

The spinoff will be led by Michael Klein who recently told employees that they will become shareholders in the New York-based company.

SPG in New Hands

Previously, Apollo appeared as a buyer of a significant portion of Credit Suisse's Securitized Products Group (SPG). The two companies had announced earlier this month they reached a «substantial first close» on the transaction. According to the statement, the company will be Atlas SP Partners, to be led by CEO Jay Kim.

The sale of SPG, along with the spin-off of CS First Boston, forms a key part of the plan announced by CEO Ulrich Koerner to transform the investment bank. Depending on the size of the assets ultimately transferred, the completion of the SPG transaction may result in a release of risk-weighted assets on the Credit Suisse balance sheet of up to $10 billion.