Apollo to Lend $4 Billion to SoftBank in Private Credit Deal
$Apollo Global Management (APO.US)$ $SoftBank Group (ADR) (SFTBY.US)$
Apollo Global Management Inc. is planning to lend about $4 billion to SoftBank Group Corp., marking the biggest ever loan of its kind in the private credit market, according to people with knowledge of the matter.
Apollo Global Management Inc. is planning to lend about $4 billion to SoftBank Group Corp., marking the biggest ever loan of its kind in the private credit market, according to people with knowledge of the matter.
The financing will be backed by holdings of SoftBank Vision Fund 2, which has made a range of equity investments in technology startups, the people added, asking not to be named discussing a private transaction. Terms are not yet final, but the $4 billion in borrowings would compare to the fund’s holdings of about $40 billion, one of the people said.
The interest rate on the loan is expected to be in the mid-single-digit percent range, the people added. Apollo, along with its insurance affiliate Athene Holding Ltd., are leading the deal, and a group of additional investors including mutual funds, endowments and financial institutions will also be part of the transaction, they said.
The loan comes during a period of relative turmoil at Masayoshi Son’s investment powerhouse, which is grappling with a spate of high-profile departures as well as a cratering of value in holdings from A $Alibaba (BABA.US)$ to $DiDi Global (Delisted) (DIDI.US)$. Global macroeconomic uncertainty and China’s crackdown on its biggest internet firms spurred a record loss at its Vision Fund unit during the September quarter. Its sale of Arm Ltd. to $NVIDIA (NVDA.US)$ is also in jeopardy, threatening a potential windfall of roughly $74 billion.
Still, the Japanese giant continues to sustain a rapid pace of deal-making. This month alone, SoftBank invested in Cerebral Inc., logistics startup Nowports and Latin America’s Addi, among others. Portfolio companies including India’s Snapdeal and Cohesity filed for initial public offerings or are in discussions for one. And SoftBank unveiled a 1 trillion yen ($9 billion) share buyback program just last month.
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