First Brands Loan Slumps After Report on Apollo Short Position

A roughly $2 billion leveraged loan for First Brands Group tumbled after a news report about Apollo Global Management taking on a credit default swap position that will pay off if the auto parts and equipment manufacturer fails to pay its debt.

The loan in question, which closed in March of 2021 and matures in 2027, pays 5 percentage points over the benchmark rate plus a credit spread adjustment. It was trading near 95 cents on the dollar earlier this week, and is now quoted in the mid-80 cents on the dollar, people familiar with the loans people said. ...