Apollo Turns $9 Billion ONEOK Stake Into Debt-Like Security, Also Bankrolls Yankees for $2.6 Billion

ONEOK Inc., the Tulsa-based pipeline operator, announced on Aug. 30 that it has a definitive agreement to buy Brazos Midstream's Permian Midland Basin natural gas gathering and processing assets for $4.425 billion in cash, according to a company statement distributed via PR Newswire.

The money is coming from Apollo Global Management, which is putting in a $9 billion nonvoting minority equity investment. Apollo is slicing its stake into tranches of varying seniority and pushing to get some of them rated investment-grade. According to Bloomberg, reported by Crypto Briefing and BigGo Finance, the goal is to sell those tranches to insurers and institutional investors as if they were bonds, even though the underlying capital is structurally equity.

The investment sits in a new holding company, ONEOK Holdings, and is deliberately subordinate to ONEOK's existing senior debt, which carries a BBB rating from the major agencies. That subordination allows ONEOK to raise $9 billion without technically adding conventional debt to its balance sheet or threatening that BBB rating, Bloomberg reported.

ONEOK plans to use $5 billion of the proceeds to retire existing debt, per the company's own statement, targeting a leverage ratio of about 3.25 times debt-to-EBITDA. BigGo Finance reported the debt paydown includes a $2 billion cash tender offer. The remainder funds the Brazos purchase outright.

Brazos brings roughly 600,000 dedicated acres and 700 miles of gathering pipelines in the Permian Midland Basin, according to KuCoin's reporting. Combined with ONEOK's existing footprint, the company's processing capacity in the region is expected to nearly double, from about 1.2 billion cubic feet per day to roughly 2.3 billion.

Apollo's return is capped. The firm's internal rate of return sits at 7% for the first nine years of the investment, rising to 7.85% by year 15, according to Crypto Briefing. Any distributions above that cap go toward amortizing Apollo's capital balance, which increases the value flowing back to ONEOK's own shareholders over time, per ONEOK's statement.

"This transaction demonstrates ONEOK's strategy of intentionally expanding and extending our integrated energy infrastructure," ONEOK president and CEO Pierce H. Norton II said in the company's announcement. Apollo Partner Jamshid Ehsani said the deal "reflects Apollo's ability to deliver flexible, high-grade capital solutions at scale."

ONEOK's board approved the transaction unanimously. The Apollo investment is expected to close in September 2026, with the Brazos acquisition following in the fourth quarter, according to KuCoin.

Apollo has completed more than $100 billion of similar hybrid equity-to-debt transactions and has a pipeline exceeding another $100 billion, according to the firm. The company oversees more than $1 trillion in assets, much of it tied to its insurance subsidiary Athene, which needs a steady supply of investment-grade paper to match its long-dated liabilities.

Apollo CEO Marc Rowan has said the firm sees a large market in structuring capital that traditional banks and public markets can't easily package, according to KuCoin's reporting.

The same appetite for unconventional deals surfaced elsewhere this week. Fox News reported that Apollo Sports Capital agreed to inject $2.6 billion into the New York Yankees, with the Steinbrenner family retaining control. MLB rules cap any single private equity firm at a 15% ownership stake in a team, and Forbes had pegged the Yankees' valuation at roughly $8.5 billion earlier in 2026, a figure Fox News suggested may understate the franchise's real worth given the size of Apollo's check.

BigGo Finance's analysis noted that execution risk in the ONEOK deal is tied to integration and refinancing complexity, given the transaction involves merger steps and changes to the entities that issue ONEOK's debt. Slicing a $9 billion equity stake into tranches and getting agencies to bless some of them as investment-grade is a bet that rating agencies and insurance regulators will treat the structure as genuinely lower-risk than a straight equity position.

Whether those investment-grade ratings materialize as Apollo intends, and whether Athene and third-party insurers end up holding paper that performs the way it's modeled, won't be clear until the deal closes in September and the tranches actually go to market.