Travelport used that urgency, a unique capital structure and some wriggle room in its borrowing agreement to persuade enough senior secured lenders of $1.68 billion to agree to a restructuring. The big winners are the private equity sponsors, the holders of payment-in-kind notes due next March that might have triggered default and secured bondholders who have seen their positions erode.

"The sponsor community will definitely look at this deal, which is very aggressive, and at their portfolios and find a way to replicate it," says a professional familiar with the restructuring.

Blackstone, along with affiliates of Technology Crossover Ventures, bought the Atlanta-based company for $4.3 billion in 2006. One Equity Partners, the private equity arm of J.P. Morgan Chase & Co., acquired an economic interest in December 2006. In spring 2007, the private equity backers recouped nearly all of their $800 million equity investment financed by $1.1 billion in PIK notes.

The remaining $715 million of PIKs are at the holding company level, Travelport Holdings Ltd. Under an agreement devised by Credit Suisse Group, PIK holders will get most of its debt restructured at the operating company level, with extended maturities, cash and equity. PIK holders will receive some 40% of Travelport in equity, still a little dicey given the level of debt.

The PIK holders "are coming out as good as they ever hoped to be," says CreditSights analyst Roger King.

As of March 31, Blackstone owned 70.32%, while Technology Crossover and One Equity each held 11.34%, according to filings.

Despite its weak position and uncertainty over the need for more restructuring, Travelport took advantage of the fact that traditional loan investors such as collateralized loan obligation and mutual funds have been more risk averse when it comes to negotiating restructurings. As of June 30, there was still $3.24 billion in debt at the operating company on Travelport's books, mostly from the 2006 buyout. This includes Travelport's $1.05 billion of senior bonds now marginalized by the deal.

Legal counsel for a bondholder group sent a letter Sept. 22 opposing its plan, arguing it was a fraudulent cramdown. Travelport disputed that but lacked the full lenders' support needed to proceed.

The next day, the team from Credit Suisse created a "prisoner's dilemma" within the bank group, say sources familiar with the deal. Originally, Travelport was offering a 4% fee to any lender that agreed to the restructuring, but then revised it to a total of 4% on the full amount of the institutional secured loans in the capital structure spread among those in favor, which could amount to nearly 8% if only 51% approved. "They knew they had one more arrow in the quiver, and they shot it," says the professional.

On Sept. 23, what appears to be more than 90% of lenders -- it was a widely distributed syndicated bank debt -- consented, sources say. The bondholders have yet to take further action.

The calculus for new corporate loans, especially those backing buyouts, changed for investors after the Federal Reserve announced it would keep interest rates low for the next two years: $6.2 billion flowed out of loan funds over the past eight weeks, which triggered a price drop in the secondary market; leveraged loans fell 1.16% through Sept. 26, according to Standard & Poor's Leveraged Commentary & Data. And just as the market has been working through new issues at higher prices, restructuring efforts will cost more.

"Any sort of debt restructuring now is going to be far more expensive than it was a few months ago," says New York University professor Edward Altman, a pioneer in credit analysis. Yet credit quality overall will remain more favorable to 2008: The year-to-date leveraged loan default rate is running at a microscopic 0.09%, according to LCD's quarterly poll of managers, and is predicted to rise to only 1.87% in 2012 and 3% in 2013. "It's going to put pressure on companies, and the default rate will rise as a result, but it won't rise significantly," Altman says.