Apollo Global Management Inc. has bought a chunk of a loan arranged by a group of banks that will help United Airlines Holdings Inc. boost liquidity as the fast-spreading coronavirus wreaks havoc across the travel industry, according to people familiar with the matter.
The $2 billion one-year loan, which closed last week, is among those that banks have been asked to arrange to help companies in industries from cruise lines to casinos cope with travel and business disruptions that could last for months as a result of the Covid-19 outbreak. American Airlines Group Inc., JetBlue Airways Corp. and SouthWest Airlines Co. recently entered into similar facilities.
United’s loan was arranged by JPMorgan Chase & Co., Barclays Plc, Citigroup Inc. and Morgan Stanley and is secured by aircraft and other collateral, according to a filing. This gives the banks, and therefore Apollo, a direct claim on the assets.
Representatives for Apollo, JPMorgan, Barclays, Citigroup and Morgan Stanley declined to comment, while a representative for United didn’t immediately respond to a request for comment.
Major carriers including Delta Air Lines Inc., American Airlines and United have halted nearly all of their international operations as the virus’s spread spurred governments to restrict travel. Carriers now are making deeper cuts in domestic operations, parking planes and offering unpaid leave to workers.
Congress is considering $58 billion in loans and other financial help for the industry.
Apollo, whose credit investing arm is now almost three times as large as its private equity business, has been aggressively expanding in direct lending including aircraft finance.