Apollo to Repackage $9 Billion Oneok Stake Into Debt Deal
Apollo Global Management Inc. is repackaging its $9 billion stake in energy company Oneok Inc. into an investment-grade debt deal, allowing the borrower to raise capital without adding conventional debt or affecting credit ratings. The structure treats Apollo's equity as permanent subordinated capital and slices it into seniority levels that can be rated investment grade. This approach is part of a broader strategy used by Apollo across multiple deals involving companies like Intel Corp., Anheuser-Busch InBev, and BP Plc. The Oneok deal will support the company's $4.4 billion acquisition of Brazos Midstream Holdings' natural gas operations in West Texas and help repay existing debt. The investment is structured through a new holding company that sits subordinate to ONEOK’s senior BBB-rated debt. Apollo expects returns capped at 7% for nine years, increasing gradually over time. The deal underscores how Apollo has become a key financier for large corporations by offering capital solutions that avoid leverage risks and credit rating downgrades.
Topics: Apollo Global Capital raising Investment-grade debt Oneok Inc.