CCC yields are back near 15 percent. Higher for longer is being paid at the bottom of the credit stack.

What is happening at the bottom of the credit market?

Borrowing costs for the weakest credits have risen sharply while everyone else's have not. Apollo's chief economist, Torsten Slok, wrote on 25 September 2026 that CCC yields are around 15 percent, even as the broader credit market stays calm.

The chart behind the note tracks the yield to worst on Bloomberg's index of Caa-rated US high yield debt from 1999. By our reading it bottomed near 5 percent in 2021, sat around 10 percent at the start of 2026 and has climbed steadily since. On those readings the cost of CCC money has roughly tripled from the cheap-money low.

Three days earlier the same author set out the rest of the ladder. On 22 September 2026 high yield credit as a whole yielded 7.6 percent, private credit 8.3 percent and investment grade credit 5.7 percent. The bottom rung now costs roughly double the high yield average, a gap of about seven points.

Why is higher for longer landing on the weakest borrowers first?

Because they are the ones exposed to the rate. Apollo's point is that strong balance sheets locked in cheap fixed-rate debt and have barely felt the tightening, while the most leveraged borrowers feel it in full as floating-rate costs and maturities reset.

Apollo names the cohort. Every month rates stay elevated, more CCC borrowers from the 2021 and 2022 vintages reach the refinancing wall with less cash to service their debt. It puts the pain sharpest in heavily levered, private equity backed technology, healthcare and consumer discretionary companies, where floating-rate debt, thin margins and disruption risk from new technology leave little room.

The lender side of the ledger shows the same dates. Lincoln International found that 70.0 percent of the principal direct lenders foreclosed on in the first half of 2026 came from loans made in 2021 and 2022. The loans written at the lowest rates are the ones now being repriced or handed over.

Apollo's summary is that monetary policy is working with a lag and working unevenly, with the transmission running mainly through the bottom of the credit stack. For a borrower that is the practical definition of higher for longer: the average borrower is fine, and the average does not refinance your loan.

What does each rung of the credit stack cost now?

Between 3.5 and 8.3 percent on the upper rungs, and around 15 percent on the bottom one. Apollo's two September notes put money market funds at 3.5 percent, 10-year Treasuries at 5.0, investment grade at 5.7, high yield at 7.6 and private credit at 8.3.

Read the ladder as a borrower would. The step from high yield to CCC is larger than the entire distance from a money market fund to high yield. The rating is the single largest line in the price.

The private credit figure needs care. It is an asset-class average across direct lending portfolios, not a quote for a borrower whose credit profile would rate CCC. A company in that position refinancing privately should expect to pay above the average, and to be asked for more in structure: tighter covenants, amortization, or part of the interest paid in kind.

In money terms the gap is not abstract. By our arithmetic, every 10 million dollars of debt refinanced at 15 percent rather than 7.6 costs about 740,000 dollars more in interest each year, out of the same cash flow that failed to earn the better rating.

What does this mean for a company with a maturity ahead?

It means the refinancing will be priced on the rung the company occupies on the day, not the rung it occupied when the loan was written. A business that borrowed in 2021 as a comfortable single-B and has since drifted lower will refinance into the bottom rung's price.

Apollo's advice to investors is to move up in quality, toward companies with earnings that can pay higher debt-servicing costs. That is the same instruction lenders are giving themselves, and it has a direct consequence for borrowers. Capital is rotating toward the credits that can show coverage and away from the ones that cannot.

The window is set by the maturity, not by the market. A borrower with two years left can still change the credit story before it is priced. A borrower with six months left is usually negotiating over the old story with whichever lender is willing to hold it.

What should a borrower do before the maturity arrives?

Start the refinancing eighteen to twenty-four months out, and start with the credit rather than the lender. Know the interest coverage and leverage a new lender will calculate, on its definitions and not the ones in the existing agreement, before anyone else calculates them.

Then move the numbers that decide the rung. Paying down debt from free cash flow or a partial asset sale, hedging a floating rate, or bringing in junior or equity capital to reduce senior leverage each changes which part of the ladder a lender reaches for. Each takes longer than a refinancing process does.

Compare structures, not just coupons. A higher cash coupon with a clean structure can be cheaper than a lower coupon with payment in kind, springing covenants or a short runway to the next maturity. The relevant number is the total cost across the life of the new facility and the flexibility it leaves.

Finally, decide early whether a refinancing is the answer at all. For some 2021 and 2022 capital structures, a recapitalization or a sale on the owner's timetable will preserve more value than a refinancing priced at the bottom of the stack.