A consortium led by HPS Investment Partners and including Apollo Global Management is close to finalising the purchase of more than $2.2bn in leveraged buyout debt that has been sitting on bank balance sheets since April’s tariff-driven market disruption, according to a report by Bloomberg.
The reports cites unnamed people familiar with the matter as revealing that the debt package was originally arranged to finance ABC Technologies Holdings’ acquisition of TI Fluid Systems, but syndication efforts stalled as investors pulled back amid concerns over US tariffs on Canadian auto parts. Banks including Citigroup and JPMorgan were forced to fund the deal themselves, leaving them with so-called “hung debt.”
Under the new agreement, HPS is providing a $1.6bn private credit loan, while the consortium – which includes Apollo, ABC’s financial sponsor – is also taking on a $675m last-out term loan. The deal is expected to close Friday, allowing the banks to offload one of the year’s most challenging debt overhangs.
The transaction follows other recent moves to clear hung debt from bank balance sheets as financing conditions improve. Last month, lenders sold $2bn of debt linked to Patient Square Capital’s acquisition of Patterson Cos, while earlier this year JPMorgan managed to offload debt tied to Flutter Entertainment’s purchase of Playtech’s Italian unit.
