TEN - Tenneco drops amid as banks shelved both debt offerings for Brightspeed LBO (update)

Update 3:30pm : Updates to include Brightspeed confirmation, comment.

Tenneco ( NYSE: TEN ), which agreed to be sold to Apollo for $20/share in February, fell 3.7% after banks shelved a $3.9 billion debt offering Apollo Global's ( NYSE: APO ) deal to purchase Brightspeed.

Banks led by Barclays ended a $1.9 billion junk-bond sale and $2 billion leveraged loan sale on Thursday to support Apollo's purchase of telecom and broadcom assets from Lumen Technologies ( NYSE: LUMN ), which will be run under the the Brightspeed brand, according to a Bloomberg report.

Banks underwrote the debt portion of the deal and are responsible to provide the funding for the deal, which is expected to close on Monday. Lumens shares fell 5.2%.

Brightspeed confirmed in a statement that it withdrew its debt financing for the deal, though it still expects the deal to close in early October.

Tenneco slipped as investors are concerned on deals, especially financing for transactions, in light of current market volatility and the recent issues regarding the Citrix Systems sale to Elliott and Vista Equity, where banks that underwrote debt backing the deal are collectively headed for $500M in losses when the debt was auctioned off at a discount, according to media reports.

Tennecco also dipped 1% on Tuesday as some investors also cited some vague concerns about financing.

The move in the auto parts supplier comes after the shares gained 3.1% on Monday after Tenneco ( TEN ) and Apollo filed with European antitrust regulators for the deal, which many M&A investors had been waiting to happen.

Bloomberg a week ago reported that that banks are set to start a $5.4 billion debt sale in mid-Octobe r to finance the Apollo purchase of Tenneco ( TEN ).

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