Apollo Cleared to Lend $700 Million to SAS in ‘Unusual’ Deal

US Bankruptcy Judge Michael Wiles on Friday approved a $700 million financing package for SAS AB from Apollo Global Management, though he said features of the deal concern him.

The financing, divided into two $350 million draws, will allow Apollo to convert the debt into stock in the bankrupt airline or participate in an equity raise tied to SAS’s eventual exit from Chapter 11 protection under certain circumstances. Wiles called the financing “unusual” and questioned whether it was legally viable.

“I will approve the arrangement, although not without some significant reservations,” Wiles said in a hearing held by telephone ...