(Bloomberg) -- Banks are readying a roughly $5.5 billion debt sale to support Apollo Global Management Inc.’s acquisition of Univar Solutions Inc., the latest test of investor appetite for risky loans and bonds that back buyouts. 

JPMorgan Chase & Co. is leading the loan and bond financing and plans to launch the offering to investors in early to mid June, according to people familiar with the matter, who asked not be identified because the talks are private. Some of the debt may be offered in euros, the people added. 

A group of banks led by JPMorgan underwrote a debt package comprised of a $2.1 billion term loan, a $2 billion senior secured bridge loan and a $1.4 billion asset-based revolving credit facility earlier this year. Bridge loans are typically replaced by permanent financing such as bonds.

A representative for JPMorgan declined to comment. Apollo and Univar didn’t immediately respond to requests for comment.

The leveraged finance markets in both the US and Europe have seen relatively low issuance of loans and junk bonds to fund buyouts this year. That’s partly because deal activity has slowed, and also due to banks losing out on some financings to private credit firms.  

Read more: KKR Expects Big Private Credit Deals to Keep Coming Forward

Univar is one of the larger financings to be underwritten by banks after Russia’s invasion of Ukraine and a global market selloff left some lenders stuck with debt that couldn’t offload, or forced them to sell at rock-bottom prices. 

Since then, banks have tended to underwrite new deals with more pricing protections and lower leverage to take account of a lower risk environment.

Banks were recently let off the hook for an $8.2 billion package of debt they had originally promised Tegna Inc. in early 2022, after the proposed buyout by hedge fund Standard General LP was terminated due to delayed regulatory approval. 

Apollo agreed to buy Univar, a distributor of chemical products, in March for $8.1 billion. 

--With assistance from Allan Lopez.

(Updates to add links to related stories.)

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