Document
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2016
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 814-00646
APOLLO INVESTMENT CORPORATION
(Exact name of Registrant as specified in its charter)
Maryland
52-2439556
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
9 West 57th Street
37th Floor
New York, New York
10019
(Address of principal executive offices)
(Zip Code)
(212) 515-3450
(Registrant’s telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x  No ¨
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes ¨  No ¨
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
Accelerated filer
¨
Non-accelerated filer
¨
Smaller reporting company
¨
(Do not check if a smaller reporting company)
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ¨  No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class of Common Stock
 
Outstanding at February 3, 2017
$0.001 par value
 
219,694,654
 



APOLLO INVESTMENT CORPORATION
Table of Contents
 
 
Page
 
PART I. FINANCIAL INFORMATION
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
 
PART II. OTHER INFORMATION
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
Item 5.
 
 
 
Item 6.
 
 
 
 



Table of Contents

PART I. FINANCIAL INFORMATION
In this report, the terms the “Company,” “Apollo Investment,” “AIC,” “we,” “us,” and “our” refer to Apollo Investment Corporation unless the context specifically states otherwise.
Item 1. Financial Statements
APOLLO INVESTMENT CORPORATION
STATEMENTS OF ASSETS AND LIABILITIES
(In thousands, except share and per share data)


December 31, 2016
 
March 31, 2016

(Unaudited)
 

Assets

 

Investments at fair value:


 


Non-controlled/non-affiliated investments (cost — $1,622,942 and $2,052,896, respectively)
$
1,450,491

 
$
1,790,294

Non-controlled/affiliated investments (cost — $506,324 and $216,202, respectively)
330,153

 
272,558

Controlled investments (cost — $747,753 and $829,029, respectively)
745,689

 
853,977

Total investments at fair value (cost — $2,877,019 and $3,098,127, respectively)
2,526,333

 
2,916,829

Derivative assets (cost — $4,395 and $0, respectively)
1,910

 

Cash
50,307

 
16,521

Foreign currencies (cost — $1,568 and $2,354, respectively)
1,534

 
2,384

Restricted cash
7,080

 

Receivable for investments sold
1,023

 
79,625

Interest receivable
23,840

 
29,749

Dividends receivable
4,261

 
9,509

Deferred financing costs
18,679

 
14,497

Prepaid expenses and other assets
502

 
9,523

Total Assets
$
2,635,469

 
$
3,078,637



 

Liabilities

 

Debt
$
1,033,958

 
$
1,312,960

Derivative liabilities (proceeds — $3,555 and $0, respectively)
5,117

 

Payable for investments purchased
16,858

 
25,091

Distributions payable
32,954

 
45,231

Management and performance-based incentive fees payable
20,896

 
31,124

Interest payable
10,870

 
7,444

Accrued administrative services expense
1,136

 
2,015

Other liabilities and accrued expenses
6,981

 
9,191

Total Liabilities
$
1,128,770

 
$
1,433,056

Commitments and contingencies (Note 10)


 


Net Assets
$
1,506,699

 
$
1,645,581



 

Net Assets

 

Common stock, $0.001 par value (400,000,000 shares authorized; 219,694,654 and 226,156,496 shares issued and outstanding, respectively)
$
220

 
$
226

Paid-in capital in excess of par
2,989,011

 
3,026,922

Accumulated underdistributed net investment income
71,901

 
71,231

Accumulated net realized loss
(1,243,448
)
 
(1,288,141
)
Net unrealized loss
(310,985
)
 
(164,657
)
Net Assets
$
1,506,699

 
$
1,645,581




 


Net Asset Value Per Share
$
6.86

 
$
7.28


See notes to financial statements.
1

Table of Contents

APOLLO INVESTMENT CORPORATION
STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)

Three Months Ended December 31,
 
Nine Months Ended December 31,

2016
 
2015
 
2016
 
2015
Investment Income

 

 

 

Non-controlled/non-affiliated investments:

 

 

 

Interest income
$
36,671

 
$
61,756

 
$
127,420

 
$
205,585

Dividend income
358

 
1,037

 
2,531

 
2,824

Other income
936

 
677

 
2,984

 
6,822

Non-controlled/affiliated investments:

 

 

 

Interest income
384

 
182

 
1,014

 
633

Dividend income
4,609

 
9,594

 
12,312

 
28,263

Other income

 
70

 
70

 
297

Controlled investments:

 

 

 

Interest income
18,713

 
13,388

 
53,385

 
34,571

Dividend income
6,400

 
7,621

 
13,850

 
15,352

Other income

 

 

 
63

Total Investment Income
$
68,071

 
$
94,325

 
$
213,566

 
$
294,410

Expenses
 
 
 
 
 
 
 
Management fees
$
12,978

 
$
16,478

 
$
40,679

 
$
50,557

Performance-based incentive fees
5,670

 
11,142

 
16,063

 
33,783

Interest and other debt expenses
14,473

 
19,335

 
45,704

 
63,535

Administrative services expense
1,599

 
1,531

 
5,767

 
4,614

Other general and administrative expenses
2,329

 
2,806

 
9,917

 
7,695

Total expenses
37,049

 
51,292

 
118,130

 
160,184

Management and performance-based incentive fees waived
(5,246
)
 
(4,999
)
 
(16,264
)
 
(14,237
)
Expense reimbursements
(84
)
 
(59
)
 
(253
)
 
(176
)
Net Expenses
$
31,719

 
$
46,234

 
$
101,613

 
$
145,771

Net Investment Income
$
36,352

 
$
48,091

 
$
111,953

 
$
148,639

Net Realized and Change in Unrealized Gains (Losses)

 

 

 

Net realized gains (losses):

 

 

 

Non-controlled/non-affiliated investments
$
3,932

 
$
(6,112
)
 
$
(36,195
)
 
$
(82,896
)
Non-controlled/affiliated investments
36,473

 
(1,575
)
 
81,047

 
(1,642
)
Controlled investments
(1,982
)
 

 
(2,173
)
 
(39,714
)
Foreign currency transactions
749

 
(1,599
)
 
2,014

 
3,883

Net realized gains (losses)
39,172

 
(9,286
)
 
44,693

 
(120,369
)
Net change in unrealized losses:

 

 

 

Non-controlled/non-affiliated investments
5,292

 
(73,088
)
 
70,318

 
(116,950
)
Non-controlled/affiliated investments
(53,882
)
 
2,879

 
(183,676
)
 
31,612

Controlled investments
(21,447
)
 
(2,173
)
 
(56,030
)
 
32,579

Derivatives
(4,046
)
 

 
(4,046
)
 

Foreign currency translations
9,849

 
7,805

 
27,106

 
3,360

Net change in unrealized losses
(64,234
)
 
(64,577
)
 
(146,328
)
 
(49,399
)
Net Realized and Change in Unrealized Losses
$
(25,062
)
 
$
(73,863
)
 
$
(101,635
)
 
$
(169,768
)
Net Increase (Decrease) in Net Assets Resulting from Operations
$
11,290

 
$
(25,772
)
 
$
10,318

 
$
(21,129
)
Earnings (Loss) Per Share — Basic
$
0.05

 
$
(0.11
)
 
$
0.05

 
$
(0.09
)
Earnings (Loss) Per Share — Diluted
N/A

 
$
(0.11
)
 
N/A

 
$
(0.09
)

See notes to financial statements.
2

Table of Contents

APOLLO INVESTMENT CORPORATION
STATEMENTS OF CHANGES IN NET ASSETS
(In thousands, except share data)

 
Nine Months Ended 
 December 31, 2016
 
Year Ended 
 March 31, 2016
 
(Unaudited)
 
 
Operations
 
 
 
Net investment income
$
111,953

 
$
193,257

Net realized gains (losses)
44,693

 
(195,364
)
Net change in unrealized losses
(146,328
)
 
(42,419
)
Net Increase (Decrease) in Net Assets Resulting from Operations
$
10,318

 
$
(44,526
)
 
 
 
 
Distributions to Shareholders
 
 
 
Distribution of net investment income
$
(111,283
)
 
$
(111,853
)
Distribution of return of capital

 
(73,211
)
Net Decrease in Net Assets Resulting from Distributions to Shareholders
$
(111,283
)
 
$
(185,064
)
 
 
 
 
Capital Share Transactions
 
 
 
Repurchase of common stock
$
(37,917
)
 
$
(62,437
)
Net Decrease in Net Assets Resulting from Capital Share Transactions
$
(37,917
)
 
$
(62,437
)
 
 
 
 
Net Assets
 
 
 
Net decrease in net assets during the period
$
(138,882
)
 
$
(292,027
)
Net assets at beginning of period
1,645,581

 
1,937,608

Net Assets at End of Period
$
1,506,699

 
$
1,645,581

 
 
 
 
Capital Share Activity
 
 
 
Shares repurchased during the period
(6,461,842
)
 
(10,584,855
)
Shares issued and outstanding at beginning of period
226,156,496

 
236,741,351

Shares Issued and Outstanding at End of Period
219,694,654

 
226,156,496


See notes to financial statements.
3

Table of Contents

APOLLO INVESTMENT CORPORATION
STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)

 
Nine Months Ended December 31,
 
2016
 
2015
Operating Activities
 
 
 
Net increase (decrease) in net assets resulting from operations
$
10,318

 
$
(21,129
)
Net realized (gains) losses
(44,693
)
 
120,369

Net change in unrealized losses
146,328

 
49,399

Net amortization of premiums and accretion of discounts on investments
(3,769
)
 
(5,039
)
Accretion of discount on notes
447

 
447

Amortization of deferred financing costs
4,366

 
5,278

Increase from foreign currency transactions
2,014

 
4,477

Changes in operating assets and liabilities:
 
 
 
Payment-in-kind interest and dividends capitalized
(22,787
)
 
(34,090
)
Purchases of investments
(476,520
)
 
(923,719
)
Purchases of derivatives
(4,395
)
 

Proceeds from derivatives
3,555

 

Proceeds from sales and repayments of investments
837,232

 
1,113,077

Decrease in interest receivable
6,010

 
10,709

Decrease (increase) in dividends receivable
5,248

 
(3,449
)
Decrease in prepaid expenses and other assets
9,021

 
6,121

Decrease in management and performance-based incentive fees payable
(10,228
)
 
(7,275
)
Increase in interest payable
3,426

 
1,441

Decrease in accrued administrative services expense
(879
)
 
(192
)
Decrease in other liabilities and accrued expenses
(2,210
)
 
(964
)
Net Cash Provided by Operating Activities
$
462,484

 
$
315,461

Financing Activities
 
 
 
Issuances of debt
$
741,747

 
$
1,624,754

Payments of debt
(994,804
)
 
(1,736,668
)
Financing costs paid and deferred
(7,871
)
 
(5,646
)
Repurchase of common stock
(37,917
)
 
(52,437
)
Distributions paid
(123,559
)
 
(141,547
)
Net Cash Used in Financing Activities
$
(422,404
)
 
$
(311,544
)
 
 
 
 
Cash, Foreign Currencies and Restricted Cash
 
 
 
Net increase in cash, restricted cash and foreign currencies during the period
$
40,080

 
$
3,917

Effect of foreign exchange rate changes
(64
)
 
193

Cash, restricted cash and foreign currencies at beginning of period
18,905

 
8,417

Cash, Foreign Currencies and Restricted Cash at the End of Period
$
58,921

 
$
12,527

 
 
 
 
Supplemental Disclosure of Cash Flow Information
 
 
 
Cash interest paid
$
37,487

 
$
46,962

 
 
 
 
Non-Cash Activity
 
 
 
Payment-in-kind income
$
22,047

 
$
31,607


See notes to financial statements.
4

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2016
(In thousands, except share data)

Investment
 
Industry
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Non-Controlled/Non-Affiliated Investments
 
 
 
 
 
 
 
 
 
 
Corporate Debt
 
 
 
 
 
 
 
 
 
 
Secured Debt
 
 
 
 
 
 
 
 
 
 
First Lien Secured Debt
 
 
 
 
 
 
 
 
 
 
First Lien Secured Debt (excluding Revolvers and Letters of Credit)
 
 
 
 
 
 
 
 
American Media, Inc. (16)
 
Advertising, Printing & Publishing
 
8.50% (1M L+750, 1.00% Floor)
 
8/24/20
 
$
10,400

 
$
10,115

 
$
10,088

Aptevo Therapeutics Inc. (9)(16)(23)
 
Healthcare & Pharmaceuticals
 
8.13% (3M L+760)
 
2/1/21
 
8,571

 
8,576

 
8,483

Aptevo Therapeutics Inc., Unfunded Delayed Draw (8)(9)(16)(21)(23)
 
Healthcare & Pharmaceuticals
 
0.00% Unfunded
 
2/1/21
 
6,429

 
(29
)
 
(66
)
ChyronHego Corporation (18)
 
High Tech Industries
 
7.43% (3M L+643, 1.00% Floor)
 
3/9/20
 
36,553

 
36,000

 
35,822

Dodge Data & Analytics LLC
 
Business Services
 
9.75% (3M L+875, 1.00% Floor)
 
10/31/19
 
51,990

 
51,344

 
50,561

ECN Holding Company (Emergency Communications Network) (16)(18)
 
High Tech Industries
 
9.50% (3M L+850, 1.00% Floor)
 
6/12/21
 
11,109

 
10,980

 
10,940

ECN Holding Company (Emergency Communications Network) (16)(18)
 
High Tech Industries
 
9.50% (6M L+850, 1.00% Floor)
 
6/12/21
 
11,109

 
10,980

 
10,940

Garden Fresh Restaurant Corp. (16)
 
Hotel, Gaming, Leisure, Restaurants
 
10.50% (1M L+900, 1.50% Floor)
 
7/3/18
 
2,500

 
2,500

 
2,500

LabVantage Solutions Inc.
 
High Tech Industries
 
9.00% (3M L+800, 1.00% Floor)
 
12/29/20
 
14,625

 
14,244

 
14,333

LabVantage Solutions Limited (16)(17)
 
High Tech Industries
 
9.00% (3M E+800, 1.00% Floor)
 
12/29/20
 
13,398

 
14,012

 
13,849

Magnetation, LLC (14)(26)
 
Metals & Mining
 
12.00% PIK
 
N/A
 
14,296

 
12,427

 

Maxus Capital Carbon SPE I, LLC
 
Chemicals, Plastics & Rubber
 
13.00%
 
12/31/18
 
59,305

 
59,305

 
51,391

My Alarm Center, LLC, Term Loan A (16)
 
Business Services
 
9.00% (1M L+800, 1.00% Floor)
 
1/9/19
 
28,035

 
28,036

 
28,035

My Alarm Center, LLC, Term Loan B (16)(23)
 
Business Services
 
9.00% (1M L+800, 1.00% Floor)
 
1/9/19
 
7,972

 
7,972

 
7,972

My Alarm Center, LLC, Term Loan B(16)(23)
 
Business Services
 
11.00% (P+700)
 
1/9/19
 
348

 
348

 
348

My Alarm Center, LLC, Unfunded Term Loan B (16)(21)(23)
 
Business Services
 
0.35% Unfunded
 
1/9/19
 
441

 

 

My Alarm Center, LLC, Term Loan C (16)(23)
 
Business Services
 
9.00% (1M L+800, 1.00% Floor)
 
1/9/19
 
3,115

 
3,115

 
3,115

My Alarm Center, LLC, Term Loan C (16)(23)
 
Business Services
 
11.00% (P+700)
 
1/9/19
 
439

 
439

 
439

My Alarm Center, LLC, Unfunded Term Loan C (16)(21)(23)
 
Business Services
 
0.35% Unfunded
 
1/9/19
 
558

 

 

Nextech Systems, LLC (18)
 
High Tech Industries
 
8.25% (3M L+725, 1.00% Floor)
 
6/22/21
 
21,857

 
21,367

 
21,419

Oxford Immunotec, Inc. (9)(16)(17)
 
Healthcare & Pharmaceuticals
 
8.22% (1M L+760)
 
10/1/21
 
9,750

 
9,726

 
9,724

Saba Software, Inc. (18)
 
High Tech Industries
 
9.75% (1M L+875, 1.00% Floor)
 
3/30/21
 
9,850

 
9,850

 
9,702

SCM Insurance Services, Inc. (17)
 
Business Services
 
9.25%
 
8/22/19
 
C$
39,480

 
33,293

 
24,559

Telestream Holdings Corporation (18)
 
High Tech Industries
 
7.77% (3M L+677, 1.00% Floor)
 
1/15/20
 
30,503

 
30,503

 
29,893

UniTek Global Services Inc. (16)
 
Telecommunications
 
8.50% (3M L+750, 1.00% Floor)
 
1/13/19
 
32,367

 
32,367

 
32,367

UniTek Global Services Inc. (16)
 
Telecommunications
 
9.50% (3M L+750 Cash plus 1.00% PIK, 1.00% Floor)
 
1/13/19
 
11,680

 
11,680

 
11,680

Total First Lien Secured Debt (excluding Revolvers and Letters of Credit)—25.8% (10)
 
$
419,150

 
$
388,094


See notes to financial statements.
5

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2016
(In thousands, except share data)

Investment
 
Industry
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Revolvers and Letters of Credit
 
 
 
 
 
 
 
 
 
 
Alliant Holdings Intermediate, LLC, Unfunded Revolver (8)(16)(21)(23)
 
Insurance
 
0.50% Unfunded
 
8/14/20
 
$
14,813

 
$
(1,236
)
 
$
(971
)
Alliant Holdings Intermediate, LLC, Letter of Credit (8)(16)(23)
 
Insurance
 
3.375%
 
4/24/17
 
37

 

 
(2
)
Alliant Holdings Intermediate, LLC, Letter of Credit (8)(16)(23)
 
Insurance
 
3.375%
 
5/4/17
 
8

 

 
(1
)
Alliant Holdings Intermediate, LLC, Letter of Credit (8)(16)(23)
 
Insurance
 
3.375%
 
6/30/17
 
17

 

 
(1
)
Alliant Holdings Intermediate, LLC, Letter of Credit (8)(16)(23)
 
Insurance
 
3.375%
 
7/29/17
 
80

 

 
(5
)
Alliant Holdings Intermediate, LLC, Letter of Credit (8)(16)(23)
 
Insurance
 
3.375%
 
10/3/17
 
8

 

 
(1
)
Alliant Holdings Intermediate, LLC, Letter of Credit (8)(16)(23)
 
Insurance
 
3.375%
 
11/30/17
 
37

 

 
(2
)
American Media, Inc., Revolver (16)(23)
 
Advertising, Printing & Publishing
 
8.50% (1M L+750, 1.00% Floor)
 
8/24/20
 
1,067

 
1,067

 
1,035

American Media, Inc., Unfunded Revolver (8)(16)(21)(23)
 
Advertising, Printing & Publishing
 
0.50% Unfunded
 
8/24/20
 
505

 
(49
)
 
(15
)
American Media, Inc., Letter of Credit (8)(16)(23)
 
Advertising, Printing & Publishing
 
7.50%
 
8/24/20
 
206

 

 
(6
)
Endologix, Inc., Unfunded Revolver (8)(9)(17)(21)(23)
 
Healthcare & Pharmaceuticals
 
0.50% Unfunded
 
7/29/20
 
5,000

 
(22
)
 
(25
)
LabVantage Solutions Limited, Unfunded Revolver (8)(16)(17)(21)(23)
 
High Tech Industries
 
0.50% Unfunded
 
12/29/20
 
3,435

 
(96
)
 
(72
)
My Alarm Center, LLC, Revolver (16)(23)
 
Business Services
 
11.00% (P+700)
 
1/9/19
 
2,708

 
2,708

 
2,708

My Alarm Center, LLC, Unfunded Revolver (16)(21)(23)
 
Business Services
 
0.35% Unfunded
 
1/9/19
 
3,542

 

 

Oxford Immunotec, Inc., Unfunded Revolver (8)(9)(16)(17)(21)(23)
 
Healthcare & Pharmaceuticals
 
0.50% Unfunded
 
10/1/21
 
1,000

 
(5
)
 
(5
)
Tibco Software Inc., Unfunded Revolver (8)(21)(23)
 
High Tech Industries
 
0.50% Unfunded
 
12/5/19
 
6,000

 
(35
)
 
(840
)
TricorBraun Holdings, Inc., Revolver (9)(16)(23)
 
Containers, Packaging & Glass
 
5.75% (P+225)
 
11/30/21
 
998

 
998

 
993

TricorBraun Holdings, Inc., Unfunded Revolver (8)(9)(16)(21)(23)
 
Containers, Packaging & Glass
 
0.50% Unfunded
 
11/30/21
 
4,627

 
(497
)
 
(20
)
UniTek Global Services Inc., Unfunded Revolver (16)(21)(23)
 
Telecommunications
 
0.50% Unfunded
 
1/13/19
 
5,000

 

 

UniTek Global Services Inc., Letter of Credit (16)(23)
 
Telecommunications
 
7.50%
 
1/13/19
 
8,812

 

 

UniTek Global Services Inc., Letter of Credit (16)(23)
 
Telecommunications
 
7.50%
 
1/13/19
 
1,850

 

 

Wright Medical Group, Inc., Revolver (9)(16)(17)(23)
 
Healthcare & Pharmaceuticals
 
5.00% (1M L+425, 0.75% Floor)
 
12/23/21
 
10,000

 
10,000

 
9,900

Wright Medical Group, Inc., Unfunded Revolver (8)(9)(16)(17)(21)(23)
 
Healthcare & Pharmaceuticals
 
0.50% Unfunded
 
12/23/21
 
40,000

 
(478
)
 
(400
)
Total Revolvers and Letters of Credit—0.8% (10)
 
 
 
 
 
 
 
$
12,355

 
$
12,270

Total First Lien Secured Debt—26.6% (10)
 
 
 
 
 
 
 
$
431,505

 
$
400,364

Second Lien Secured Debt
 
 
 
 
 
 
 
 
 
 
1A Smart Start LLC
 
Consumer Services
 
9.50% (3M L+850, 1.00% Floor)
 
8/22/22
 
$
35,000

 
$
34,405

 
$
34,422

Access CIG, LLC (16)
 
Business Services
 
9.75% (3M L+875, 1.00% Floor)
 
10/17/22
 
35,755

 
34,314

 
35,599

Access CIG, LLC (16)
 
Business Services
 
9.75% (3M L+875, 1.00% Floor)
 
10/17/22
 
15,215

 
14,676

 
15,148


See notes to financial statements.
6

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2016
(In thousands, except share data)

Investment
 
Industry
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Active Network, LLC
 
Business Services
 
10.50% (3M L+950, 1.00% Floor)
 
11/15/21
 
$
16,225

 
$
16,074

 
$
16,022

A-L Parent LLC
 
Advertising, Printing & Publishing
 
8.25% (3M L+725, 1.00% Floor)
 
12/2/24
 
10,048

 
9,948

 
10,123

Appriss Holdings, Inc.
 
Business Services
 
10.25% (3M L+925, 1.00% Floor)
 
5/21/21
 
23,309

 
23,044

 
23,309

Aptean, Inc.
 
Business Services
 
10.50% (3M L+950, 1.00% Floor)
 
12/20/23
 
9,548

 
9,404

 
9,530

Armor Holding II LLC
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
10.25% (3M L+900, 1.25% Floor)
 
12/26/20
 
8,000

 
7,900

 
8,030

Asurion Corporation
 
Insurance
 
8.50% (3M L+750, 1.00% Floor)
 
3/3/21
 
39,590

 
39,394

 
40,357

BioClinica Holding I, LP
 
Healthcare & Pharmaceuticals
 
9.25% (3M L+825, 1.00% Floor)
 
10/21/24
 
24,612

 
24,128

 
24,504

Confie Seguros Holding II Co.
 
Insurance
 
10.25% (1M L+900, 1.25% Floor)
 
5/8/19
 
22,344

 
22,269

 
22,232

Elements Behavioral Health, Inc.
 
Healthcare & Pharmaceuticals
 
13.00% (3M L+1200 PIK, 1.00% Floor)
 
2/11/20
 
10,832

 
10,777

 
8,666

Garden Fresh Restaurant Corp. (14)(16)
 
Hotel, Gaming, Leisure, Restaurants
 
7.75% (3M L+625 PIK, 1.50% Floor)
 
1/1/19
 
9,466

 
7,746

 

Garden Fresh Restaurant Corp. (14)(16)
 
Hotel, Gaming, Leisure, Restaurants
 
15.00% (3M L+1350 PIK, 1.50% Floor)
 
1/1/19
 
51,902

 
45,904

 

GCA Services Group, Inc.
 
Business Services
 
10.00% (3M L+900, 1.00% Floor)
 
3/1/24
 
10,000

 
9,767

 
9,950

Grocery Outlet, Inc.
 
Food & Grocery
 
9.25% (3M L+825, 1.00% Floor)
 
10/21/22
 
25,000

 
24,703

 
25,063

Infiltrator Systems Integrated, LLC
 
Manufacturing, Capital Equipment
 
9.75% (3M L+875, 1.00% Floor)
 
5/26/23
 
13,889

 
13,651

 
13,958

Institutional Shareholder Services, Inc.
 
Business Services
 
9.50% (3M L+850, 1.00% Floor)
 
4/30/22
 
8,232

 
8,159

 
8,149

K&N Parent, Inc.
 
Automotive
 
9.75% (3M L+875, 1.00% Floor)
 
10/21/24
 
30,000

 
29,407

 
29,775

Lanai Holdings III, Inc.
 
Healthcare & Pharmaceuticals
 
9.50% (3M L+850, 1.00% Floor)
 
8/28/23
 
17,391

 
16,892

 
16,870

Landslide Holdings, Inc.
 
Business Services
 
9.50% (3M L+850, 1.00% Floor)
 
9/21/23
 
18,510

 
18,152

 
18,880

Ministry Brands, LLC (16)(23)
 
Business Services
 
10.25% (3M L+925, 1.00% Floor)
 
6/2/23
 
7,840

 
7,724

 
7,720

Ministry Brands, LLC, Unfunded Delayed Draw (8)(16)(21)(23)
 
Business Services
 
5.63% Unfunded (3ML+463, 1.00% Floor)
 
6/2/23
 
2,160

 
(32
)
 
(33
)
MSC Software Corp. (17)
 
High Tech Industries
 
8.50% (3M L+750, 1.00% Floor)
 
5/31/21
 
13,448

 
13,355

 
13,465

MW Industries, Inc.
 
Manufacturing, Capital Equipment
 
10.25% (3M L+925, 1.00% Floor)
 
12/28/20
 
20,000

 
19,546

 
19,900

PAE Holding Corporation
 
Aerospace & Defense
 
10.50% (3M L+950, 1.00% Floor)
 
10/20/23
 
22,026

 
21,269

 
22,411

PetVet Care Centers, LLC
 
Healthcare & Pharmaceuticals
 
9.50% (3M L+850, 1.00% Floor)
 
6/17/21
 
13,500

 
13,098

 
13,297

Poseidon Merger Sub, Inc.
 
Business Services
 
9.50% (3M L+850, 1.00% Floor)
 
8/15/23
 
18,000

 
17,551

 
17,820

Power Products, LLC (9)
 
Manufacturing, Capital Equipment
 
10.00% (3M L+900, 1.00% Floor)
 
12/20/23
 
37,500

 
36,194

 
36,844

River Cree Enterprises LP (11)(17)
 
Hotel, Gaming, Leisure, Restaurants
 
11.00%
 
1/20/21
 
C$
19,000

 
17,913

 
14,133


See notes to financial statements.
7

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2016
(In thousands, except share data)

Investment
 
Industry
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Sequential Brands Group, Inc. (17)
 
Consumer Goods – Durable
 
9.63% (1M L+900)
 
7/1/22
 
$
17,600

 
$
17,397

 
$
17,330

SiTV, Inc. (11)
 
Broadcasting & Subscription
 
10.375%
 
7/1/19
 
2,219

 
2,219

 
1,354

SMG
 
Hotel, Gaming, Leisure, Restaurants
 
9.25% (3M L+825, 1.00% Floor)
 
2/27/21
 
19,649

 
19,649

 
19,600

Sprint Industrial Holdings, LLC
 
Containers, Packaging & Glass
 
11.25% (3M L+1000, 1.25% Floor)
 
11/14/19
 
16,163

 
15,627

 
8,647

Sterling Holdings Ultimate Parent, Inc.
 
Business Services
 
9.25% (3M L+825, 1.00% Floor)
 
6/19/23
 
20,000

 
19,819

 
20,000

STG-Fairway Acquisitions, Inc.
 
Business Services
 
10.25% (3M L+925, 1.00% Floor)
 
6/30/23
 
15,000

 
14,675

 
14,100

TMK Hawk Parent, Corp.
 
Transportation – Cargo, Distribution
 
8.50% (3M L+750, 1.00% Floor)
 
10/1/22
 
34,000

 
33,735

 
33,830

Velocity Technology Solutions, Inc.
 
Business Services
 
9.50% (3M L+825, 1.25% Floor)
 
9/28/20
 
16,500

 
16,286

 
16,088

Wave Holdco Merger Sub, Inc.
 
Telecommunications
 
10.25% (3M L+925, 1.00% Floor)
 
5/27/23
 
10,000

 
9,761

 
9,826

Total Second Lien Secured Debt—43.6% (10)
 
 
 
 
 
 
 
$
716,500

 
$
656,919

Total Secured Debt—70.2% (10)
 
 
 
 
 
 
 
$
1,148,005

 
$
1,057,283

Unsecured Debt
 
 
 
 
 
 
 
 
 
 
American Tire Distributors, Inc. (11)
 
Transportation – Cargo, Distribution
 
10.25%
 
3/1/22
 
$
14,741

 
$
14,811

 
$
14,133

Canacol Energy Ltd. (17)
 
Energy – Oil & Gas
 
9.50% (3M L+850, 1.00% Floor)
 
12/31/19
 
75,000

 
73,694

 
73,500

Flex Acquisition Company, Inc.
 
Containers, Packaging & Glass
 
8.00% (3M L+700, 1.00% Floor)
 
12/29/17
 
12,777

 
12,714

 
12,713

Lonestar Intermediate Super Holdings, LLC
 
Insurance
 
10.00% (1M L+900 Cash (1M L+975 PIK Toggle), 1.00% Floor)
 
8/31/21
 
4,865

 
4,819

 
5,034

Sorenson Holdings, LLC (11)
 
Consumer Goods – Durable
 
13.85% Cash (13.85% PIK Toggle)
 
10/31/21
 
52

 
35

 
48

U.S. Security Associates Holdings, Inc.
 
Business Services
 
11.00%
 
7/28/18
 
135,000

 
135,000

 
135,000

UniTek Global Services Inc. (16)
 
Telecommunications
 
15.00% PIK
 
7/13/19
 
8,231

 
8,231

 
8,355

Total Unsecured Debt—16.5% (10)
 
 
 
 
 
 
 
$
249,304

 
$
248,783

Total Corporate Debt—86.7% (10)
 
 
 
 
 
 
 
$
1,397,309

 
$
1,306,066

Structured Products and Other
 
 
 
 
 
 
 
 
 
 
Asset Repackaging Trust Six B.V. (11)(17)(19)
 
Utilities – Electric
 
13.11%
 
5/18/27
 
$
58,411

 
$
25,548

 
$
30,894

Craft 2013-1, Credit-Linked Note (11)(16)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
10.13% (3M L+925)
 
4/17/22
 
25,000

 
25,020

 
24,750

Craft 2013-1, Credit-Linked Note (16)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
10.13% (3M L+925)
 
4/17/22
 
7,625

 
7,700

 
7,549

Craft 2014-1A, Credit-Linked Note (11)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
10.55% (3M L+965)
 
5/15/21
 
42,500

 
42,375

 
41,650

Craft 2015-2, Credit-Linked Note (11)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
10.13% (3M L+925)
 
1/16/24
 
26,000

 
25,833

 
24,960

NXT Capital CLO 2014-1, LLC, Class E Notes (11)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
6.38% (3M L+550)
 
4/23/26
 
5,000

 
4,708

 
4,324

Total Structured Products and Other—8.9% (10)
 
 
 
 
 
 
 
$
131,184

 
$
134,127


See notes to financial statements.
8

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2016
(In thousands, except share data)

Investment
 
Industry
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Equity
 
 
 
 
 
 
 
 
 
 
Preferred Equity
 
 
 
 
 
Shares
 
 
 
 
Delta Career Education Corporation, Super Senior Preferred Stock A (13)
 
Education
 
N/A
 
N/A
 
7,812

 
$
7,049

 
$

Delta Career Education Corporation, Super Senior Preferred Stock B (13)
 
Education
 
N/A
 
N/A
 
10,585

 
8,788

 

Delta Career Education Corporation, Super Senior Preferred Stock C (13)
 
Education
 
N/A
 
N/A
 
23,769

 
20,665

 

Gryphon Colleges Corp., Preferred Stock (13)(14)
 
Education
 
12.50% PIK
 
N/A
 
332,500

 
6,863

 

Gryphon Colleges Corp., Preferred Stock (13)(14)
 
Education
 
13.50% PIK
 
N/A
 
12,360

 
27,686

 

Sungevity Inc., Series D Preferred Stock (13)
 
Energy – Electricity
 
N/A
 
N/A
 
114,678,899

 
4,408

 
4,393

Total Preferred Equity—0.3% (10)
 
 
 
 
 
 
 
$
75,459

 
$
4,393

Common Equity/Interests
 
 
 
 
 
Shares
 
 
 
 
Accelerate Parent Corp., Common Stock (13)
 
Transportation – Cargo, Distribution
 
N/A
 
N/A
 
1,664,046

 
$
1,714

 
$
1,270

Clothesline Holdings, Inc., Common Stock (13)
 
Healthcare & Pharmaceuticals
 
N/A
 
N/A
 
6,000

 
6,000

 

Garden Fresh Restaurant Holdings, LLC, Common Stock (13)
 
Hotel, Gaming, Leisure, Restaurants
 
N/A
 
N/A
 
50,000

 
5,000

 

Gryphon Colleges Corp., Common Stock (13)
 
Education
 
N/A
 
N/A
 
17,500

 
175

 

Skyline Data, News and Analytics LLC, Class A Common Unit (13)
 
Business Services
 
N/A
 
N/A
 
4,500,000

 
4,500

 
4,500

Sorenson Holdings, LLC, Membership Interests (13)
 
Consumer Goods – Durable
 
N/A
 
N/A
 
587

 

 
135

Total Common Equity/Interests—0.4% (10)
 
 
 
 
 
 
 
$
17,389

 
$
5,905

Warrants
 
 
 
 
 
Warrants
 
 
 
 
Gryphon Colleges Corp., Class A-1 Preferred Stock Warrants (13)
 
Education
 
N/A
 
N/A
 
45,947

 
$
460

 
$

Gryphon Colleges Corp., Class B-1 Preferred Stock Warrants (13)
 
Education
 
N/A
 
N/A
 
104,314

 
1,043

 

Gryphon Colleges Corp., Common Stock Warrants (13)
 
Education
 
N/A
 
N/A
 
9,820

 
98

 

Total Warrants—0.0% (10)
 
 
 
 
 
 
 
$
1,601

 
$

Total Equity— 0.7% (10)
 
 
 
 
 
 
 
$
94,449

 
$
10,298

Total Non-Controlled/Non-Affiliated Investments—96.3% (10)
 
 
 
 
 
$
1,622,942

 
$
1,450,491


See notes to financial statements.
9

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2016
(In thousands, except share data)

Investment
 
Industry
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Non-Controlled/Affiliated Investments (4)
 
 
 
 
 
 
 
 
 
 
Corporate Debt
 
 
 
 
 
 
 
 
 
 
Secured Debt
 
 
 
 
 
 
 
 
 
 
First Lien Secured Debt
 
 
 
 
 
 
 
 
 
 
Pelican Energy, LLC (14)(17)
 
Energy – Oil & Gas
 
10.00% PIK Toggle (10.00% Cash)
 
12/31/18
 
$
30,373

 
$
26,665

 
$
15,155

Solarplicity Group Limited (3)(17)
 
Energy – Electricity
 
12.50% PIK Toggle (12.50% cash)
 
11/30/22
 
£
134,565

 
196,003

 
152,601

Total First Lien Secured Debt—11.1% (10)
 
 
 
$
222,668

 
$
167,756

Total Secured Debt—11.1% (10)
 
 
 
 
 
 
 
$
222,668

 
$
167,756

Unsecured Debt
 
 
 
 
 
 
 
 
 
 
Venoco, Inc.
 
Energy – Oil & Gas
 
10.00% PIK
 
7/25/17
 
$
338

 
$
338

 
$
338

Total Unsecured Debt—0.0% (10)
 
 
 
$
338

 
$
338

Total Corporate Debt—11.1% (10)
 
 
 
 
 
 
 
$
223,006

 
$
168,094

Structured Products and Other
 
 
 
 
 
 
 
 
 
 
Golden Bear 2016-R, LLC, Membership Interests (3)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
N/A
 
9/20/42
 
N/A

 
$
16,352

 
$
16,352

Ivy Hill Middle Market Credit Fund IX, Ltd., Subordinated Notes (3)(11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
13.34%
 
10/18/25
 
$
12,500

 
9,377

 
9,595

Ivy Hill Middle Market Credit Fund X, Ltd., Subordinated Notes (3)(11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
11.25%
 
7/18/27
 
14,000

 
11,322

 
10,634

MCF CLO III, LLC, Class E Notes (3)(11)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
5.33% (3M L+445)
 
1/20/24
 
12,750

 
11,661

 
10,644

MCF CLO III, LLC, Membership Interests (3)(11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
20.40%
 
1/20/24
 
41,900

 
32,072

 
36,396

Total Structured Products and Other—5.6% (10)
 
 
 
 
 
 
 
$
80,784

 
$
83,621


See notes to financial statements.
10

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2016
(In thousands, except share data)

Investment
 
Industry
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Equity
 
 
 
 
 
 
 
 
 
 
Preferred Equity
 
 
 
 
 
Shares
 
 
 
 
Renew Financial LLC (f/k/a Renewable Funding, LLC), Series B Preferred Stock (13)
 
Energy – Electricity
 
 N/A
 
N/A
 
1,505,868

 
$
8,343

 
$
20,459

Renew Financial LLC (f/k/a Renewable Funding, LLC), Series D Preferred Stock (13)
 
Energy – Electricity
 
 N/A
 
N/A
 
436,689

 
5,568

 
5,933

Total Preferred Equity—1.8% (10)
 
 
 
 
 
 
 
$
13,911

 
$
26,392

Common Equity/Interests
 
 
 
 
 
Shares
 
 
 
 
AIC SPV Holdings I, LLC, Membership Interests (15)(17)(23)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
N/A
 
N/A
 
N/A

 
$
68,861

 
$
25,987

AMP Solar Group, Inc., Class A Common Unit (13)(17)
 
Energy – Electricity
 
N/A
 
N/A
 
243,646

 
10,000

 
4,690

LVI Group Investments, LLC, Common Units (3)(13)
 
Environmental Industries
 
N/A
 
N/A
 
212,460

 
17,505

 
10,257

Pelican Energy, LLC, Membership Interests (13)(17)
 
Energy – Oil & Gas
 
N/A
 
N/A
 
1,228

 
1,099

 

Solarplicity Group Limited, Common Shares (2)(3)(13)(17)(27)
 
Energy – Electricity
 
N/A
 
N/A
 
2,825

 
2,471

 

Venoco, Inc., LLC Units (13)
 
Energy – Oil & Gas
 
N/A
 
N/A
 
192,177

 
40,517

 
10,736

Total Common Equity/Interests—3.4% (10)
 
 
 
 
 
 
 
$
140,453

 
$
51,670

Warrants
 
 
 
 
 
Warrants
 
 
 
 
Venoco, Inc., Series A Warrants (13)
 
Energy – Oil & Gas
 
N/A
 
N/A
 
23,125

 
$
48,170

 
$
376

Total Warrants—0.0% (10)
 
 
 
 
 
 
 
$
48,170

 
$
376

Total Equity—5.2% (10)
 
 
 
 
 
 
 
$
202,534

 
$
78,438

Total Non-Controlled/Affiliated Investments—21.9% (10)
 
 
 
 
 
 
 
$
506,324

 
$
330,153


See notes to financial statements.
11

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2016
(In thousands, except share data)

Investment
 
Industry
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Controlled Investments (5)
 
 
 
 
 
 
 
 
 
 
Corporate Debt
 
 
 
 
 
 
 
 
 
 
Secured Debt
 
 
 
 
 
 
 
 
 
 
First Lien Secured Debt
 
 
 
 
 
 
 
 
 
 
First Lien Secured Debt (excluding Revolvers and Letters of Credit)
 
 
 
 
 
 
 
 
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.) (16)(23)
 
Energy – Oil & Gas
 
8.00% Cash (10.00% PIK Toggle)
 
3/29/19
 
$
10,000

 
$
10,000

 
$
10,000

SHD Oil & Gas, LLC, Tranche A Note (16)
 
Energy – Oil & Gas
 
14.00% (8.00% Cash plus 6.00% PIK)
 
12/31/19
 
40,000

 
40,000

 
40,000

SHD Oil & Gas, LLC, Tranche B Note (14)(16)
 
Energy – Oil & Gas
 
14.00% PIK
 
12/31/19
 
60,531

 
44,380

 
28,937

SHD Oil & Gas, LLC, Tranche C Note (16)(23)
 
Energy – Oil & Gas
 
12.00%
 
12/31/19
 
6,750

 
6,750

 
6,7