Apollo Plans First European CLO, Travelport Seeks Debt Exchange

Leon Black’s Apollo Global Management LLC is planning its first collateralized loan obligation in Europe, while Blackstone Group LP’s Travelport Ltd. agreed to a restructuring plan.

Apollo has asked Citigroup Inc. to manage the sale of the 306.5 million-euro ($400 million) deal, according to three people with knowledge of the deal, who asked not to be identified because the terms are private. It plans to include a 180 million-euro top-rated portion. Travelport reached a deal with some of its creditors that includes a bond exchange offer aimed at extending the maturity on about $745 million of debt due next year, according to a statement distributed by PR Newswire today.

Increasing leverage, decreasing pricing and looser structure is characterizing the market in the absence of meaningful mergers and acquisition activity, according to a report from Morgan Joseph TriArtisan LLC.

“Overheating of the high yield market could indeed lead to a bubble bursting,” the report said. “Not dissimilar to the 2007 loan market that eventually choked on the volume of mega-LBOs.”

Trevelport will offer holders of its 9.875 percent notes due September 2014 and two floating-rate securities in dollars and euros due at the same time a combination of cash and new dollar-denominated 13.875 percent senior notes or floating-rate debt due in 2016, according to the statement.

United Continental Holdings Inc., the world’s largest carrier, is seeking a $900 million term loan to refinance debt, according to a person with knowledge of the matter. Sram LLC, a maker of bicycle components, is seeking a $675 million term loan due in 2020 to refinance debt, according to another person with knowledge of the matter.

Doncasters’ Deal

Doncasters Group Ltd., an engineering company owned by Dubai International Capital LLC, plans to raise about $1.1 billion of loans to refinance debt, according to two people with knowledge of the matter. The company is seeking $515 million and 200 million pounds ($297 million) of seven-year first-lien loans, said the people, who asked not to be identified because the deal is private. It is also raising a $325 million second-lien loan of 7 1/2 years.

DIC completed the 700 million-pound acquisition of Burton-upon-Trent, England-based Doncasters in 2006. The company raised 881 million pounds of financing in 2007, according to data compiled by Bloomberg.

David Miller, who has been head of global leveraged-finance capital markets since 2011 at Credit Suisse Group AG, is replacing Phil DeSantis as the co-head of global credit products, according to two internal memos.

The price of leveraged loans climbed to 98.06 cents on the dollar today, according to the Standard & Poor’s/LSTA U.S. Leveraged Loan 100 Index.

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