Close

Form 8-K APOLLO INVESTMENT CORP For: Feb 04

FREE Breaking News Alerts from StreetInsider.com!

E-mail Address

StreetInsider.com Top Tickers, 4/19/2024

1. NFLX
2. TSM
3. ISRG
4. INFY
5. SNV
6. TSLA
7. SPY
8. SMCI
9. AAPL
10. NVDA


February 4, 2021 4:16 PM EST

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 4, 2021 (February 4, 2021)
 
 
Apollo Investment Corporation
(Exact Name of Registrant as Specified in Charter)
 
 
 
Maryland 814-00646 52-2439556
(State or Other
Jurisdiction
of Incorporation)		 (Commission File Number) (I.R.S. Employer
Identification No.)
9 West 57th Street,
New York, NY 10019
(Address of Principal Executive Offices) (Zip Code)
(212) 515-3450
(Registrant’s telephone number, including area code)
None
(Former Name or Former Address, if Changed Since Last Report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 


¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
 
Emerging growth company [ ]
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Item 2.02Results of Operations and Financial Condition
    On February 4, 2021, Apollo Investment Corporation (the “Registrant”) issued a press release announcing its financial results for the quarter ended December 31, 2020. The text of the press release is included as Exhibit 99.1 to this Form 8-K.

    The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.
Item 9.01Financial Statements and Exhibits
(d) Exhibits

Exhibit
Number

Exhibit
Press Release, dated February 4, 2021.










SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
APOLLO INVESTMENT CORP.
By: /s/ Joseph D. Glatt
 Name: Joseph D. Glatt
 Title:   Chief Legal Officer and Secretary
Date: February 4, 2021


apolloicverticala031.jpg

Apollo Investment Corporation
Reports Financial Results for the Quarter Ended December 31, 2020


Fiscal Third Quarter and Other Recent Highlights:
•Net investment income per share for the quarter was $0.43 compared to $0.43 for the quarter ended September 30, 2020

•Net asset value per share as of the end of the quarter was $15.59 compared to $15.44 as of September 30, 2020, an increase of 1.0% driven primarily by a net gain on the corporate lending portfolio(1) and a realized gain on a non-core renewable investment
•New investment commitments made during the quarter totaled $108 million(2)
•Gross fundings during the quarter totaled $157 million primarily consisting of $97 million of term loans and $52 million of revolvers
•Gross exits during the quarter totaled $287 million primarily consisting of $3 million of term loan sales, $184 million of term loan repayments, and $85 million of gross revolver paydowns
•Net paydowns during the quarter totaled $130 million primarily consisting of $90 million of net term loan paydowns and $33 million of net revolver paydowns
•Net leverage(3) as of the end of the quarter was 1.43x, down from 1.56x as of September 30, 2020
•Declared a distribution of $0.31 per share and a supplemental distribution of $0.05 per share for the quarter ending December 31, 2020
•Amended and extended the Company’s Senior Secured Facility (the “Facility”) in December; Final maturity extended to 2025; Pricing and advance rates were unchanged on the Facility(4)
•$330 million of immediately available liquidity and $313 million of additional capacity under the Facility as of December 31, 2020(5)

New York, NY — February 4, 2021 — Apollo Investment Corporation (NASDAQ: AINV) or the “Company,” or “Apollo Investment,” today announced financial results for its third fiscal quarter ended December 31, 2020. The Company’s net investment income was $0.43 per share for the quarter ended December 31, 2020, compared to $0.43 per share for the quarter ended September 30, 2020. The Company’s net asset value (“NAV”) was $15.59 per share as of December 31, 2020, compared to $15.44 as of September 30, 2020.
On February 4, 2021, the Board of Directors declared a distribution of $0.31 per share payable on April 5, 2021 to shareholders of record as of March 19, 2021. On February 4, 2021, the Company’s Board also declared a supplemental distribution of $0.05 per share payable on April 5, 2021 to shareholders of record as of March 19, 2021.

1

Mr. Howard Widra, Apollo Investment’s Chief Executive Officer commented, “During the quarter, we continued to reduce the Fund’s net leverage ratio with net repayments of $130 million which reduced AINV’s net leverage to 1.43x at the end of December, near the low end of our target range of 1.40x to 1.60x. Notably, repayments included non-core assets and second lien positions, assets we continue to seek to monetize. Our net leverage ratio also benefited from net appreciation on the portfolio as well as retained earnings. Our corporate lending portfolio continued to recover some of the unrealized losses incurred during the March 2020 quarter. Given our reduced leverage, we have begun to shift our focus to making new investments.” Mr. Howard Widra continued, “During the quarter we were pleased to extend our revolving credit facility by nearly two years until 2025 which greatly enhances our liquidity position as we continue to navigate the current environment.”
___________________
(1)Corporate lending portfolio includes leveraged lending, life sciences, asset based and lender finance. Excludes Merx Aviation Finance, LLC ("Merx") and non-core and legacy assets.
(2)For corporate lending portfolio.
(3)The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.
(4)The Company extended the final maturity of Facility by approximately two years from November 19, 2023 to December 22, 2025. Total commitments to the Facility will remain $1.81 billion until November 19, 2022 and will decrease to $1.705 billion thereafter.
(5)As of December 31, 2020, aggregate lender commitments under the Senior Secured Facility (the “Facility”) totaled $1.81 billion and there were $1.17 billion of outstanding borrowings under the Facility and $0.2 million of letters of credit issued under the Facility. Accordingly, there was $643 million of unused capacity under the Facility as of December 31, 2020, which is subject to compliance with a borrowing base that applies different advance rates to different types of assets in the Company’s portfolio. As of December 31, 2020, the Company had immediate access to $330 million under the Facility based on the Company’s borrowing base and $313 million of additional capacity.







2

FINANCIAL HIGHLIGHTS
($ in billions, except per share data)December 31,
2020		September 30,
2020		June 30,
2020		March 31,
2020		December 31,
2019
Total assets$2.58 $2.65 $2.81 $2.87 $3.06 
Investment portfolio (fair value)$2.48 $2.59 $2.67 $2.79 $2.97 
Debt outstanding$1.51 $1.60 $1.76 $1.79 $1.79 
Net assets$1.02 $1.01 $1.00 $1.02 $1.22 
Net asset value per share$15.59 $15.44 $15.29 $15.70 $18.27 
Debt-to-equity ratio 1.49  x1.59  x1.76 x1.75 x1.47 x
Net leverage ratio (1)1.43  x1.56  x1.66 x1.71 x1.43 x
___________________
(1)The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.

PORTFOLIO AND INVESTMENT ACTIVITY
Three Months Ended December 31,Nine Months Ended December 31,
(in millions)*2020201920202019
Investments made in portfolio companies$157.2 $530.0 $400.9 $1,442.0 
Investments sold(17.8)(14.9)(101.1)(44.5)
Net activity before repaid investments139.4 515.1 299.9 1,397.5 
Investments repaid(269.5)(344.2)(628.0)(804.6)
Net investment activity$(130.1)$170.9 $(328.2)$593.0 
Portfolio companies at beginning of period147 139 152 113 
Number of new portfolio companies7 16 10 51 
Number of exited portfolio companies(11)(4)(19)(13)
Portfolio companies at end of period143 151 143 151 
Number of investments made in existing portfolio companies35 42 62 59 

____________________
* Totals may not foot due to rounding.
3

OPERATING RESULTS
Three Months Ended December 31,Nine Months Ended December 31,
(in millions)*2020201920202019
Net investment income$28.2 $36.2 $84.4 $106.5 
Net realized and change in unrealized gains (losses)4.9 (35.9)(14.9)(75.3)
Net increase in net assets resulting from operations$33.2 $0.3 $69.5 $31.2 
(per share)* (1)
Net investment income on per average share basis$0.43 $0.54 $1.29 $1.58 
Net realized and change in unrealized gain (loss) per share0.08 (0.54)(0.23)(1.12)
Earnings per share — basic$0.51 $0.00 $1.06 $0.46 
____________________
* Totals may not foot due to rounding.
(1) Based on the weighted average number of shares outstanding for the period presented.    



4

SHARE REPURCHASE PROGRAM *
During the three months ended December 31, 2020, the Company did not repurchase any shares.

Since the inception of the share repurchase program and through February 3, 2021, the Company repurchased 13,654,578 shares at a weighted average price per share of $16.34, inclusive of commissions, for a total cost of $223.1 million, leaving a maximum of $26.9 million available for future purchases under the current Board authorization of $250 million.

* Share figures have been adjusted for the 1-for-3 reverse stock split which was completed after market close on November 30, 2018.

LIQUIDITY

As of December 31, 2020, the Company’s outstanding debt obligations, excluding deferred financing cost and debt discount of $4.1 million, totaled $1.516 billion which was comprised of $350 million of Senior Unsecured Notes (the “2025 Notes”) which will mature on March 3, 2025 and $1.166 billion outstanding under the Facility. As of December 31, 2020, $0.2 million in standby letters of credit were issued through the Facility. The available remaining capacity under the Facility was $643 million as of December 31, 2020, which is subject to compliance with a borrowing base that applies different advance rates to different types of assets in the Company’s portfolio.



5

CONFERENCE CALL / WEBCAST AT 5:00 PM EST ON FEBRUARY 4, 2021
The Company will host a conference call on Thursday, February 4, 2021 at 5:00 p.m. Eastern Time. All interested parties are welcome to participate in the conference call by dialing (888) 802-8579 approximately 5-10 minutes prior to the call; international callers should dial (973) 633-6740. Participants should reference Apollo Investment Corporation or Conference ID #6155998 when prompted. A simultaneous webcast of the conference call will be available to the public on a listen-only basis and can be accessed through the Events Calendar in the Shareholder section of our website at www.apolloic.com. Following the call, you may access a replay of the event either telephonically or via audio webcast. The telephonic replay will be available approximately two hours after the live call and through February 26, 2021 by dialing (800) 585-8367; international callers please dial (404) 537-3406, reference Conference ID #6155998. A replay of the audio webcast will also be available later that same day. To access the audio webcast please visit the Events Calendar in the Shareholder section of the Company’s website at www.apolloic.com.

SUPPLEMENTAL INFORMATION
The Company provides a supplemental information package to offer more transparency into its financial results and make its reporting more informative and easier to follow. The supplemental package is available in the Shareholders section of the Company’s website under Presentations at www.apolloic.com.
6

Our portfolio composition and weighted average yields as of December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019 were as follows:

December 31,
2020		September 30,
2020		June 30,
2020		March 31,
2020		December 31,
2019
Portfolio composition, at fair value:
First lien secured debt78%77%78%81%78%
Second lien secured debt10%11%12%13%14%
Total secured debt88%89%90%94%92%
Unsecured debt1%1%—%—%—%
Structured products and other0%0%0%0%0%
Preferred equity1%0%0%0%1%
Common equity/interests and warrants10%10%10%6%7%
Weighted average yields, at amortized cost (1):
First lien secured debt (2)7.8%7.9%7.9%8.5%8.7%
Second lien secured debt (2)9.8%9.8%9.8%10.2%10.7%
Total secured debt (2)8.0%8.1%8.1%8.7%9.1%
Unsecured debt portfolio (2)5.3%5.3%—%—%—%
Total debt portfolio (2)8.0%8.1%8.1%8.7%9.1%
Total portfolio (3)6.5%6.7%6.8%8.0%8.6%
Interest rate type, at fair value (4):
Fixed rate amount — ————
Floating rate amount$1.9  billion$2.0 billion$2.1 billion$2.2 billion$2.2 billion
Fixed rate, as percentage of total— ————
Floating rate, as percentage of total 100 %100%100%100%100%
Interest rate type, at amortized cost (4):
Fixed rate amount— ————
Floating rate amount$2.0  billion$2.1 billion$2.2 billion$2.3 billion$2.3 billion
Fixed rate, as percentage of total—%—%—%—%—%
Floating rate, as percentage of total100 %100%100%100%100%



(1)An investor’s yield may be lower than the portfolio yield due to sales loads and other expenses.
(2)Exclusive of investments on non-accrual status.
(3)Inclusive of all income generating investments, non-income generating investments and investments on non-accrual status.
(4)The interest rate type information is calculated using the Company’s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status.













7

APOLLO INVESTMENT CORPORATION
STATEMENTS OF ASSETS AND LIABILITIES
(In thousands, except share and per share data)
December 31, 2020March 31, 2020
(Unaudited)
Assets
Investments at fair value:
Non-controlled/non-affiliated investments (cost — $1,906,817 and $2,298,548, respectively)
$1,868,904 $2,191,327 
Non-controlled/affiliated investments (cost — $133,542 and $135,346, respectively)
49,280 60,241 
Controlled investments (cost — $720,002 and $655,719, respectively)
558,683 533,865 
Cash and cash equivalents32,854 37,301 
Foreign currencies (cost — $20,535 and $6,369, respectively)
21,320 6,375 
Receivable for investments sold5,613 978 
Interest receivable14,665 19,151 
Dividends receivable3,484 5,034 
Deferred financing costs22,710 16,054 
Prepaid expenses and other assets1,266 732 
Total Assets$2,578,779 $2,871,058 
Liabilities
Debt$1,512,313 $1,794,617 
Payable for investments purchased108 — 
Distributions payable23,493 29,367 
Management and performance-based incentive fees payable8,957 10,289 
Interest payable6,369 2,887 
Accrued administrative services expense2,503 2,796 
Other liabilities and accrued expenses7,625 6,787 
Total Liabilities$1,561,368 $1,846,743 
Net Assets$1,017,411 $1,024,315 
Net Assets
Common stock, $0.001 par value (130,000,000 shares authorized; 65,259,176 and 65,259,176 shares issued and outstanding, respectively)$65 $65 
Capital in excess of par value2,099,876 2,099,876 
Accumulated under-distributed (over-distributed) earnings(1,082,530)(1,075,626)
Net Assets$1,017,411 $1,024,315 
Net Asset Value Per Share$15.59 $15.70 






8


APOLLO INVESTMENT CORPORATION
STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
Three Months Ended December 31,Nine Months Ended December 31,
2020201920202019
Investment Income
Non-controlled/non-affiliated investments:
Interest income (excluding Payment-in-kind (“PIK”) interest income)$44,097 $49,809 $137,273 $148,303 
Dividend income753 264 753 331 
PIK interest income1,627 1,224 4,025 6,662 
Other income1,246 1,193 1,792 4,315 
Non-controlled/affiliated investments:
Interest income (excluding PIK interest income)61 161 73 161 
Dividend income323 322 1,000 954 
PIK interest income— 515 — 515 
Other income— — — — 
Controlled investments:
Interest income (excluding PIK interest income)6,257 11,449 18,589 36,358 
Dividend income— 2,651 1,691 5,102 
PIK interest income— 894 728 2,615 
Other income— — — — 
Total Investment Income$54,364 $68,482 $165,924 $205,316 
Expenses
Management fees$8,957 $10,342 $27,743 $30,071 
Performance-based incentive fees— 71 — 1,983 
Interest and other debt expenses13,213 18,200 42,450 54,445 
Administrative services expense1,201 1,542 3,590 4,810 
Other general and administrative expenses2,813 2,205 8,036 7,814 
Total expenses26,184 32,360 81,819 99,123 
Management and performance-based incentive fees waived— — — — 
Expense reimbursements(77)(98)(286)(295)
Net Expenses$26,107 $32,262 $81,533 $98,828 
Net Investment Income$28,257 $36,220 $84,391 $106,488 
Net Realized and Change in Unrealized Gains (Losses)
Net realized gains (losses):
Non-controlled/non-affiliated investments$(6,196)$(537)$(14,235)$(6,245)
Non-controlled/affiliated investments(632)(1,820)(4,285)(731)
Controlled investments— — — — 
Foreign currency transactions117 6,200 393 5,014 
Extinguishment of debt— — — (4,375)
Net realized gains (losses)(6,711)3,843 (18,127)(6,337)
Net change in unrealized gains (losses):
Non-controlled/non-affiliated investments25,716 8,972 57,965 (2,534)
Non-controlled/affiliated investments5,193 (21,371)2,187 (22,123)
Controlled investments(10,447)(10,858)(39,465)(33,623)
Foreign currency translations(8,842)(16,520)(17,502)(10,688)
Net change in unrealized gains (losses)11,620 (39,777)3,185 (68,968)
Net Realized and Change in Unrealized Gains (Losses)$4,909 $(35,934)$(14,942)$(75,305)
Net Increase (Decrease) in Net Assets Resulting from Operations$33,166 $286 $69,449 $31,183 
Earnings (Loss) Per Share — Basic$0.51 $0.00 $1.06 $0.46 


9


About Apollo Investment Corporation
Apollo Investment Corporation (NASDAQ: AINV) is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. The Company invests primarily in various forms of debt investments, including secured and unsecured debt, loan investments, and/or equity in private middle-market companies. The Company may also invest in the securities of public companies and structured products and other investments such as collateralized loan obligations and credit-linked notes. The Company seeks to provide private financing solutions for private companies that do not have access to the more traditional providers of credit. Apollo Investment Corporation is managed by Apollo Investment Management, L.P., an affiliate of Apollo Global Management, Inc., a leading global alternative investment manager. For more information, please visit www.apolloic.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, including, but not limited to, statements as to our future operating results; our business prospects and the prospects of our portfolio companies; the impact of investments that we expect to make; our contractual arrangements and relationships with third parties; the dependence of our future success on the general economy and its impact on the industries in which we invest; the ability of our portfolio companies to achieve their objectives; our expected financings and investments; the adequacy of our cash resources and working capital; and the timing of cash flows, if any, from the operations of our portfolio companies.
We may use words such as “anticipates,” “believes,” “expects,” “intends,” “will,” “should,” “may” and similar expressions to identify forward-looking statements. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations. Statements regarding the following subjects, among others, may be forward-looking: macro- and micro-economic impact of the COVID-19 pandemic; the severity and duration of the COVID-19 pandemic; actions taken by governmental authorities to contain the COVID-19 pandemic or treat its impact; the impact of the COVID-19 pandemic on our financial condition, results of operations, liquidity and capital resources; the return on equity; the yield on investments; the ability to borrow to finance assets; new strategic initiatives; the ability to reposition the investment portfolio; the market outlook; future investment activity; and risks associated with changes in business conditions and the general economy. Undue reliance should not be placed on such forward-looking statements as such statements speak only as of the date on which they are made. We do not undertake to update our forward-looking statements unless required by law.

For additional information about the COVID-19 pandemic and its potential impact on the Company’s results of operations and financial condition, please refer to the COVID-19 Developments section and additional disclosure in our Form 10-Q for the period ended December 31, 2020.

Contact
Elizabeth Besen
Investor Relations Manager
Apollo Investment Corporation
212.822.0625
ebesen@apollo.com
10

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings