(Bloomberg) -- Apollo Global Management Inc.’s Brightspeed reached a deal with a group of lenders to slash US$1.1 billion of the telecom company’s debt and receive $3.7 billion of new capital.
Brightspeed is getting the new capital from all of its secured lenders and Apollo, according to a statement. Amendments to the fiber firm’s existing loan and credit facilities eliminated the debt.
Bloomberg reported in July that Apollo and Brightspeed lenders including Bank of America Corp. and Barclays Plc. were holding restructuring talks for a slug of Brightspeed debt. The deal under discussion called for the banks to take haircut on the value of their existing loans.
Brightspeed accounts for one of the last remaining tranches of so-called hung debt that banks were not able to sell to investors after the Federal Reserve started raising interest rates in 2022.
Other deals that were stuck on bank balance sheets but have since been addressed include debt tied to Apollo’s purchase of autoparts company Tenneco and the buyout of the parent company of Citrix Systems Inc. by Vista Equity Partners and Elliott Investment Management.
Roughly $5 billion of debt for Apollo’s purchase of Brightspeed has lingered on lenders’ balance sheets since the private equity firm agreed to buy the company in 2021. Still left to be sold is roughly $12.5 billion of debt that funded Elon Musk’s purchase of Twitter Inc., now known as X.
The $3.7 billion in new capital will help fund Brightspeed’s build-out of its fiber network, according to the statement. The company can now pursue an additional $4.7 billion in borrowing capacity via a government broadband access program, it said.
Charlotte-based Brightspeed employs 4,000 people and is planning to build an ultra-fast internet network across 17 states. Its current telecom and broadband platform is capable of serving 6.5 million homes and businesses, according to the statement.
--With assistance from Jeannine Amodeo.
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