Apollo Management, Blackstone Group and TPG reportedly have agreed to buy $12.5 billion of leveraged loans from Citi, at just below last month’s trading average of 87.36 cents on the dollar. It’s unclear exactly which loans are included, but is assumed that some of them will be for Apollo, Blackstone and TPG portfolio companies.
The deal is important because private equity firms are suddenly becoming the white knights of Wall Street, almost as if they were jealous of all that attention lavished on Ben Bernanke.
Not only could this deal loosen the liquidity tap for other buyout transactions (such as the $19-billion-plus deal for Clear Channel Communications), but also might be a watershed of its own.
PE Week has learned that other buyout firms have begun capital calls for new leveraged loan portfolio buys, which hasn’t really happened since all of that hung bridge debt got bought up last fall. Plus, certain firms also are considering acquisitions of their own portfolio company debt. It’s not private equity in any traditional sense, but this isn’t any traditional market. —Dan Primack