Private equity firm Apollo Global Management has purchased roughly half of a $1 billion bridge facility underwritten by a syndicate of Wall Street’s largest banks to partly finance the firm’s 2022 buyout of auto parts supplier Tenneco, according to sources.
Apollo bought $532 million of the $1 billion unsecured bridge facility, according to sources. Banks involved in Tenneco’s financing include Citi and Bank of America.
Tenneco’s $1 billion bridge facility is one of the last tranches of debt financing for Apollo’s deal that underwriters were still waiting to bring to the broadly syndicated market.
Banks underwriting Tenneco’s deal sold down $700 million of the term loan A in the low 80s,
Reorg reported in December 2023, just two months after they sold down
$150 million of the loan at 83.5. After the December sell-down, underwriters have about $450 million remaining on the books for the term loan A.
In August 2023,
Reorg reported that a $1 billion unsecured note expected to take out Tenneco’s $1 billion bridge was being whispered in the mid-70s with a coupon in the 11% area.
Tenneco previously priced a $1.9 billion senior secured note for the buyout in August 2023 at 85 to yield 11.933%, which received
lukewarm responses in primary and secondary markets. The 2028 notes were last trading in the secondary market today at 91.63 to yield 10.337%, according to MarketAxess.
Along with the $1.9 billion bond, a $1.243 billion senior secured term loan B was issued for Apollo’s purchase of Tenneco, with final pricing set at SOFR+500 bps. The loans were last quoted at 94.55/95.20 today, Monday, April 15, according to Solve Advisors.
Apollo completed its $7.1 billion purchase of Tenneco in November 2022.
Bank of America and Citi declined to comment. Apollo did not respond when reached for comment.