Apollo Global Management Flags 12% Yield Pushback on $1.15B Shutterfly Notes
APO•Apollo Global Management-backed Shutterfly raised $1.15 billion of 5NC2 senior secured notes with strengthened creditor protections after investors balked at a 12% yield, signaling heightened risk aversion. Meanwhile, Co-President Scott Kleinman warned that prolonged hold periods are compressing IRRs, implying upcoming valuation adjustments across the firm’s private equity portfolio.
1. Shutterfly Debt Refinancing Details
Shutterfly, backed by Apollo Global Management, launched a $1.15 billion 5NC2 senior secured note offering with tighter creditor protections after investors resisted a 12% yield. The deal was oversubscribed and included a $500 million term loan at margins of +650 basis points and a $225 million second-lien facility, reflecting cautious lender sentiment.
2. Apollo Private Equity Valuation Outlook
Apollo Co-President Scott Kleinman warned at a major industry conference that extended hold periods have eroded internal rates of return for private equity funds. He stated that fund managers will likely need to accept lower valuations and pricing to restore targeted IRRs in the current market.
