Issa Brothers Drops Loan for Payment-in-Kind Private Credit (1)

Brothers Mohsin and Zuber Issa are raising a type of debt for EG Group Ltdthat will allow the firm to avoid cash interest payments as it attempts to manage its debt load.

The global network of gas stations and snack shops will raise $500 million of debt from two investors, ditching a previous plan to have banks tap the leveraged loan market, according to people familiar with the matter who aren’t authorized to speak publicly. The private loan has a 50% payment-in-kind component that will let the company pay interest with more debt, the people added.

PIK debt has ...