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 June 30, 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 August 4, 2016
$0.001 par value
 
225,018,221
 



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)

 
June 30, 2016
 
March 31, 2016
 
(Unaudited)
 
 
Assets
 
 
 
Investments at fair value:
 
 
 
Non-controlled/non-affiliated investments (cost — $1,805,634 and $2,052,896, respectively)
$
1,564,731

 
$
1,790,294

Non-controlled/affiliated investments (cost — $244,140 and $216,202, respectively)
224,886

 
272,558

Controlled investments (cost — $827,448 and $829,029, respectively)
828,097

 
853,977

Total investments at fair value (cost — $2,877,222 and $3,098,127, respectively)
2,617,714

 
2,916,829

Cash
57,496

 
16,521

Foreign currencies (cost — $2,896 and $2,354, respectively)
2,824

 
2,384

Receivable for investments sold
44,879

 
79,625

Interest receivable
27,554

 
29,749

Dividends receivable
7,639

 
9,509

Deferred financing costs
13,305

 
14,497

Prepaid expenses and other assets
15,186

 
9,523

Total Assets
$
2,786,597

 
$
3,078,637

 
 
 
 
Liabilities
 
 
 
Debt
$
1,098,977

 
$
1,312,960

Payable for investments purchased
36,370

 
25,091

Dividends payable
45,013

 
45,231

Management and performance-based incentive fees payable
28,955

 
31,124

Interest payable
12,469

 
7,444

Accrued administrative services expense
2,571

 
2,015

Other liabilities and accrued expenses
9,833

 
9,191

Total Liabilities
$
1,234,188

 
$
1,433,056

Commitments and contingencies (Note 8)
 
 
 
Net Assets
$
1,552,409

 
$
1,645,581

 
 
 
 
Net Assets
 
 
 
Common stock, $0.001 par value (400,000,000 shares authorized; 225,067,696 and 226,156,496 shares issued and outstanding, respectively)
$
225

 
$
226

Paid-in capital in excess of par
3,020,850

 
3,026,922

Accumulated underdistributed net investment income
62,282

 
71,231

Accumulated net realized loss
(1,300,771
)
 
(1,288,141
)
Net unrealized loss
(230,177
)
 
(164,657
)
Net Assets
$
1,552,409

 
$
1,645,581

 
 
 
 
Net Asset Value Per Share
$
6.90

 
$
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 June 30,
 
2016
 
2015
Investment Income
 
 
 
Non-controlled/non-affiliated investments:
 
 
 
Interest income
$
48,343

 
$
73,573

Dividend income
1,104

 
877

Other income
1,699

 
3,318

Non-controlled/affiliated investments:
 
 
 
Interest income
262

 
227

Dividend income
3,046

 
9,166

Other income
70

 
157

Controlled investments:
 
 
 
Interest income
17,245

 
10,554

Dividend income
4,700

 
3,731

Other income

 
63

Total Investment Income
$
76,469

 
$
101,666

Expenses
 
 
 
Management fees
$
14,398

 
$
17,352

Performance-based incentive fees
8,451

 
11,867

Interest and other debt expenses
16,793

 
22,436

Administrative services expense
1,526

 
1,434

Other general and administrative expenses
5,038

 
2,163

Total expenses
46,206

 
55,252

Management and performance-based incentive fees waived
(5,717
)
 
(4,515
)
Expense reimbursements
(84
)
 
(57
)
Net Expenses
$
40,405

 
$
50,680

Net Investment Income
$
36,064

 
$
50,986

Net Realized and Change in Unrealized Gains (Losses)
 
 
 
Net realized gains (losses):
 
 
 
Non-controlled/non-affiliated investments
$
(57,475
)
 
$
(42,660
)
Non-controlled/affiliated investments
44,675

 
(67
)
Controlled investments
(191
)
 
(42,862
)
Foreign currency transactions
361

 
4,663

Net realized losses
(12,630
)
 
(80,926
)
Net change in unrealized gains (losses):
 
 

Non-controlled/non-affiliated investments
18,721

 
4,232

Non-controlled/affiliated investments
(72,632
)
 
15,817

Controlled investments
(24,299
)
 
26,773

Foreign currency translations
12,690

 
(10,492
)
Net change in unrealized gains (losses)
(65,520
)
 
36,330

Net Realized and Change in Unrealized Losses
$
(78,150
)
 
$
(44,596
)
Net Increase (Decrease) in Net Assets Resulting from Operations
$
(42,086
)
 
$
6,390

Earnings (Loss) Per Share — Basic
$
(0.19
)
 
$
0.03

Earnings (Loss) Per Share — Diluted
N/A

 
$
0.03


See notes to financial statements.
2

Table of Contents

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

 
Three Months Ended 
 June 30, 2016
 
Year Ended 
 March 31, 2016
 
(Unaudited)
 
 
Operations
 
 
 
Net investment income
$
36,064

 
$
193,257

Net realized losses
(12,630
)
 
(195,364
)
Net change in unrealized losses
(65,520
)
 
(42,419
)
Net Decrease in Net Assets Resulting from Operations
$
(42,086
)
 
$
(44,526
)
 
 
 
 
Distributions to Shareholders
 
 
 
Distribution of net investment income
$
(45,013
)
 
$
(111,853
)
Distribution of return of capital

 
(73,211
)
Net Decrease in Net Assets Resulting from Distributions to Shareholders
$
(45,013
)
 
$
(185,064
)
 
 
 
 
Capital Share Transactions
 
 
 
Repurchase of common stock
$
(6,073
)
 
$
(62,437
)
Net Decrease in Net Assets Resulting from Capital Share Transactions
$
(6,073
)
 
$
(62,437
)
 
 
 
 
Net Assets
 
 
 
Net decrease in net assets during the period
$
(93,172
)
 
$
(292,027
)
Net assets at beginning of period
1,645,581

 
1,937,608

Net Assets at End of Period
$
1,552,409

 
$
1,645,581

 
 
 
 
Capital Share Activity
 
 
 
Shares repurchased during the period
(1,088,800
)
 
(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
225,067,696

 
226,156,496


See notes to financial statements.
3

Table of Contents

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

 
Three Months Ended June 30,
 
2016
 
2015
Operating Activities
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(42,086
)
 
$
6,390

Net realized losses
12,630

 
80,926

Net change in unrealized (gains) losses
65,520

 
(36,330
)
Net amortization of premiums and accretion of discounts on investments
(1,489
)
 
(885
)
Accretion of discount on notes
148

 
148

Amortization of deferred financing costs
1,899

 
1,987

Increase from foreign currency transactions
360

 
5,394

Changes in operating assets and liabilities:
 
 
 
Payment-in-kind interest and dividends capitalized
(3,553
)
 
(15,596
)
Purchases of investments
(111,145
)
 
(477,557
)
Proceeds from sales and repayments of investments
370,127

 
587,776

Decrease in interest receivable
2,325

 
14,818

Decrease (increase) in dividends receivable
1,870

 
(4,092
)
Decrease (increase) in prepaid expenses and other assets
(5,663
)
 
5,499

Increase (decrease) in management and performance-based incentive fees payable
(2,169
)
 
18

Increase in interest payable
5,025

 
4,625

Increase in accrued administrative services expense
556

 
400

Increase in other liabilities and accrued expenses
642

 
3,266

Net Cash Provided by Operating Activities
$
294,997

 
$
176,787

Financing Activities
 
 
 
Issuances of debt
$
215,189

 
$
539,821

Payments of debt
(416,880
)
 
(659,353
)
Financing costs paid and deferred
(485
)
 
(5,708
)
Repurchase of common stock
(6,073
)
 

Dividends paid
(45,231
)
 
(47,348
)
Net Cash Used in Financing Activities
$
(253,480
)
 
$
(172,588
)
 
 
 
 
Cash and Foreign Currencies
 
 
 
Net increase in cash and foreign currencies during the period
$
41,517

 
$
4,199

Effect of foreign exchange rate changes
(102
)
 
292

Cash and foreign currencies at beginning of period
18,905

 
8,417

Cash and Foreign Currencies at End of Period
$
60,320

 
$
12,908

 
 
 
 
Supplemental Disclosure of Cash Flow Information
 
 
 
Cash interest paid
$
9,157

 
$
14,764

 
 
 
 
Non-Cash Activity
 
 
 
Payment-in-kind income
$
6,364

 
$
8,077


See notes to financial statements.
4

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
June 30, 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)
 
 
 
 
 
 
 
 
Aventine Renewable Energy Holdings, Inc.
 
Chemicals, Plastics & Rubber
 
15.00% PIK Toggle (10.50% Cash)
 
9/24/17
 
$
17,399

 
$
19,688

 
$
15,828

Belk, Inc.
 
Retail
 
5.75% (6M L+475, 1.00% Floor)
 
12/12/22
 
1,292

 
1,159

 
1,037

ChyronHego Corporation (18)
 
High Tech Industries
 
6.63% (3M L+563, 1.00% Floor)
 
3/9/20
 
32,019

 
31,510

 
31,378

Delta Educational Systems, Inc. (14)(16)
 
Education
 
16.00% (3M L+1400 PIK, 2.00% Floor)
 
12/11/16
 
7,049

 
7,049

 
180

Dodge Data & Analytics LLC
 
Business Services
 
9.75% (3M L+875, 1.00% Floor)
 
10/31/19
 
52,747

 
51,992

 
51,296

ECN Holding Company (Emergency Communications Network) (16)(18)
 
High Tech Industries
 
8.00% (3M L+700, 1.00% Floor)
 
6/12/21
 
11,109

 
10,974

 
10,754

ECN Holding Company (Emergency Communications Network) (16)(18)
 
High Tech Industries
 
8.00% (6M L+700, 1.00% Floor)
 
6/12/21
 
11,166

 
11,017

 
10,808

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
 
14,813

 
14,378

 
14,331

LabVantage Solutions Limited (16)(17)
 
High Tech Industries
 
9.00% (3M E+800, 1.00% Floor)
 
12/29/20
 
13,570

 
14,151

 
14,585

Magnetation, LLC (14)
 
Metals & Mining
 
12.00% PIK
 
7/7/16
 
13,875

 
12,428

 
32

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

 
59,305

 
57,355

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

 
28,035

 
27,755

My Alarm Center, LLC, Term Loan B (16)(23)
 
Business Services
 
9.00% (1M L+800, 1.00% Floor)
 
1/9/19
 
7,860

 
7,860

 
7,781

My Alarm Center, LLC, Term Loan B (16)(23)
 
Business Services
 
11.00% (P+700)
 
1/9/19
 
75

 
75

 
74

My Alarm Center, LLC, Unfunded Term Loan B (8)(16)(21)(23)
 
Business Services
 
0.35% Unfunded
 
1/9/19
 
826

 

 
(8
)
My Alarm Center, LLC, Term Loan C (16)(23)
 
Business Services
 
9.00% (1M L+800, 1.00% Floor)
 
1/9/19
 
2,973

 
2,973

 
2,944

My Alarm Center, LLC, Term Loan C (16)(23)
 
Business Services
 
11.00% (P+700)
 
1/9/19
 
94

 
94

 
94

My Alarm Center, LLC, Unfunded Term Loan C (8)(16)(21)(23)
 
Business Services
 
0.35% Unfunded
 
1/9/19
 
1,044

 

 
(10
)
Nextech Systems, LLC (18)
 
High Tech Industries
 
9.25% (3M L+825, 1.00% Floor)
 
6/22/21
 
22,500

 
21,940

 
22,050

Saba Software, Inc. (18)
 
High Tech Industries
 
9.75% (1M L+875, 1.00% Floor)
 
3/30/21
 
9,900

 
9,900

 
9,752

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

 
33,118

 
26,101

Spotted Hawk Development, LLC (14)
 
Energy – Oil & Gas
 
19.00% (13.00% Cash plus 6.00% PIK)
 
9/12/16
 
86,959

 
84,380

 
63,840

Telestream Holdings Corporation (18)
 
High Tech Industries
 
7.77% (3M L+677, 1.00% Floor)
 
1/15/20
 
30,894

 
30,894

 
30,276


See notes to financial statements.
5

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
June 30, 2016
(In thousands, except share data)

Investment
 
Industry
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
UniTek Global Services Inc. (16)
 
Telecommunications
 
9.50% (3M L+750 Cash plus 1.00% PIK, 1.00% Floor)
 
1/13/19
 
$
11,845

 
$
11,845

 
$
11,845

UniTek Global Services Inc. (16)
 
Telecommunications
 
11.00% (P+650 Cash plus 1.00% PIK)
 
1/13/19
 
2,250

 
2,250

 
2,250

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

 
32,367

 
31,396

Venoco, Inc., Unfunded Delayed Draw (8)(16)(23)
 
Energy – Oil & Gas
 
1.00% Unfunded
 
12/31/16
 
10,956

 
(79
)
 
(110
)
Venoco, Inc. (16)
 
Energy – Oil & Gas
 
12.00%
 
2/28/19
 
40,517

 
40,517

 
33,062

Total First Lien Secured Debt (excluding Revolvers and Letters of Credit)—30.9% (10)
 
$
542,320

 
$
479,176

Revolvers and Letters of Credit
 
 
 
 
 
 
 
 
 
 
Alliant Holdings Intermediate, LLC, Revolver (16)(23)
 
Insurance
 
3.95% (1M L+350)
 
8/14/20
 
$
1,875

 
$
1,875

 
$
1,704

Alliant Holdings Intermediate, LLC, Unfunded Revolver (8)(16)(21)(23)
 
Insurance
 
0.50% Unfunded
 
8/14/20
 
13,016

 
(1,408
)
 
(1,184
)
Alliant Holdings Intermediate, LLC, Letter of Credit (8)(16)(23)
 
Insurance
 
3.375%
 
10/3/16
 
8

 

 
(1
)
Alliant Holdings Intermediate, LLC, Letter of Credit (8)(16)(23)
 
Insurance
 
3.375%
 
11/30/16
 
56

 

 
(5
)
Alliant Holdings Intermediate, LLC, Letter of Credit (8)(16)(23)
 
Insurance
 
3.375%
 
4/24/17
 
37

 

 
(3
)
Alliant Holdings Intermediate, LLC, Letter of Credit (8)(16)(23)
 
Insurance
 
3.375%
 
5/4/17
 
8

 

 
(1
)
Avaya, Inc., Revolver (23)
 
Telecommunications
 
5.25% (P+175)
 
10/26/16
 
3,303

 
3,303

 
3,303

Confie Seguros Holding II Co., Revolver (16)(23)
 
Insurance
 
4.95% (1M L+450)
 
11/9/17
 
2,470

 
2,470

 
2,371

Confie Seguros Holding II Co., Revolver (16)(23)
 
Insurance
 
7.00% (P+350)
 
11/9/17
 
750

 
750

 
720

Confie Seguros Holding II Co., Unfunded Revolver (8)(16)(21)(23)
 
Insurance
 
0.50% Unfunded
 
11/9/17
 
1,137

 
(161
)
 
(45
)
Confie Seguros Holding II Co., Letter of Credit (8)(16)(23)
 
Insurance
 
4.50%
 
1/13/17
 
143

 

 
(6
)
LabVantage Solutions Limited, Unfunded Revolver (8)(16)(17)(21)(23)
 
High Tech Industries
 
0.50% Unfunded
 
12/29/20
 
3,435

 
(108
)
 
(124
)
My Alarm Center, LLC, Revolver (16)(23)
 
Business Services
 
11.00% (P+700)
 
1/9/19
 
292

 
292

 
292

My Alarm Center, LLC, Unfunded Revolver (16)(21)(23)
 
Business Services
 
0.35% Unfunded
 
1/9/19
 
5,958

 

 

Tibco Software Inc., Revolver (16)(23)
 
High Tech Industries
 
4.45% (1M L+400)
 
12/5/19
 
960

 
960

 
768

Tibco Software Inc., Unfunded Revolver (8)(16)(21)(23)
 
High Tech Industries
 
0.50% Unfunded
 
12/5/19
 
5,040

 
(41
)
 
(1,008
)
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

 

 

Total Revolvers and Letters of Credit—0.4% (10)
 
 
 
 
 
 
 
$
7,932

 
$
6,781

Total First Lien Secured Debt—31.3% (10)
 
 
 
 
 
 
 
$
550,252

 
$
485,957

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

 
$
34,365

 
$
34,335

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

 
34,223

 
33,668


See notes to financial statements.
6

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
June 30, 2016
(In thousands, except share data)

Investment
 
Industry
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Access CIG, LLC (16)
 
Business Services
 
9.75% (3M L+875, 1.00% Floor)
 
10/17/22
 
$
15,215

 
$
14,642

 
$
14,327

Active Network, Inc.
 
Business Services
 
9.50% (3M L+850, 1.00% Floor)
 
11/15/21
 
19,672

 
19,598

 
19,279

Appriss Holdings, Inc.
 
Business Services
 
9.25% (3M L+825, 1.00% Floor)
 
5/21/21
 
32,750

 
32,348

 
32,160

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

 
7,890

 
7,840

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

 
39,375

 
38,303

Confie Seguros Holding II Co. (16)
 
Insurance
 
10.25% (1M L+900, 1.25% Floor)
 
5/8/19
 
22,344

 
22,255

 
21,450

Delta Educational Systems, Inc. (14)(16)
 
Education
 
35.00% PIK
 
6/10/18
 
1,408

 
1,328

 

Delta Educational Systems, Inc. (14)(16)
 
Education
 
16.00% PIK
 
5/12/17
 
7,500

 
7,460

 

Deltek, Inc.
 
Business Services
 
9.50% (3M L+850, 1.00% Floor)
 
6/26/23
 
15,086

 
14,900

 
15,256

Elements Behavioral Health, Inc.
 
Healthcare & Pharmaceuticals
 
13.00% (3M L+1200 PIK, 1.00% Floor)
 
2/11/20
 
10,140

 
10,077

 
8,619

Extraction Oil & Gas Holdings, LLC
 
Energy – Oil & Gas
 
10.00% and 11.00%
 
5/29/19
 
52,633

 
52,110

 
52,567

Garden Fresh Restaurant Corp. (14)(16)
 
Hotel, Gaming, Leisure, Restaurants
 
7.75% (3M L+625 PIK, 1.50% Floor)
 
1/1/19
 
9,103

 
7,746

 
4,005

Garden Fresh Restaurant Corp. (14)(16)
 
Hotel, Gaming, Leisure, Restaurants
 
15.00% (1M L+1350 PIK, 1.50% Floor)
 
1/1/19
 
48,159

 
45,904

 

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

 
9,756

 
9,900

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

 
24,683

 
24,000

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

 
13,638

 
13,784

Institutional Shareholder Services, Inc.
 
Business Services
 
8.50% (3M L+750, 1.00% Floor)
 
4/30/22
 
6,640

 
6,587

 
6,441

Kronos, Inc.
 
Business Services
 
9.75% (3M L+850, 1.25% Floor)
 
4/30/20
 
9,981

 
10,102

 
10,125

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

 
16,870

 
16,870

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

 
13,346

 
11,431

MW Industries, Inc.
 
Manufacturing, Capital Equipment
 
10.25% (3M L+925, 1.00% Floor)
 
12/23/20
 
20,000

 
19,500

 
19,500

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

 
17,518

 
17,640

Premier Trailer Leasing, Inc.
 
Transportation – Cargo, Distribution
 
10.00% (3M L+900, 1.00% Floor)
 
9/24/20
 
52,000

 
51,209

 
53,040

River Cree Enterprises LP (11)(17)
 
Hotel, Gaming, Leisure, Restaurants
 
11.00%
 
1/20/21
 
C$
23,000

 
21,684

 
16,979

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

 
2,219

 
1,720

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

 
19,649

 
18,912

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

 
15,546

 
11,556


See notes to financial statements.
7

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
June 30, 2016
(In thousands, except share data)

Investment
 
Industry
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Sterling Holdings Ultimate Parent, Inc.
 
High Tech Industries
 
9.25% (3M L+825, 1.00% Floor)
 
6/19/23
 
$
20,000

 
$
19,809

 
$
19,600

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

 
14,658

 
14,250

TASC, Inc. (16)
 
Aerospace & Defense
 
12.00%
 
5/21/21
 
2,704

 
2,597

 
2,728

TASC, Inc. (16)
 
Aerospace & Defense
 
12.00%
 
5/21/21
 
7,058

 
6,939

 
7,120

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

 
33,717

 
33,915

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

 
16,263

 
16,088

Venoco, Inc. (11)(14)(16)
 
Energy – Oil & Gas
 
8.875% Cash (12.00% PIK Toggle)
 
2/28/19
 
37,993

 
48,170

 
14,165

Total Second Lien Secured Debt—40.0% (10)
 
 
 
 
 
 
 
$
728,681

 
$
621,573

Total Secured Debt—71.3% (10)
 
 
 
 
 
 
 
$
1,278,933

 
$
1,107,530

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

 
$
14,816

 
$
12,981

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

 
73,512

 
72,150

Delta Educational Systems, Inc. (14)(16)
 
Education
 
 16.00% PIK
 
5/12/17
 
21,888

 
20,665

 

Sorenson Holdings, LLC (11)
 
Consumer Goods – Durable
 
 13.00% Cash (13.00% PIK Toggle)
 
10/31/21
 
52

 
35

 
49

Tibco Software Inc. (11)(16)
 
High Tech Industries
 
11.375%
 
12/1/21
 
4,984

 
4,863

 
3,965

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

 
135,000

 
136,350

UniTek Global Services Inc. (16)
 
Telecommunications
 
 15.00% PIK
 
7/13/19
 
7,641

 
7,641

 
7,641

Total Unsecured Debt—15.0% (10)
 
 
 
 
 
 
 
$
256,532

 
$
233,136

Total Corporate Debt—86.3% (10)
 
 
 
 
 
 
 
$
1,535,465

 
$
1,340,666

Structured Products and Other
 
 
 
 
 
 
 
 
 
 
Asset Repackaging Trust Six B.V. (11)(17)(19)
 
Utilities – Electric
 
13.87%
 
5/18/27
 
$
58,411

 
$
25,375

 
$
30,319

Craft 2013-1, Credit-Linked Note (11)(16)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
9.88% (3M L+925)
 
4/17/22
 
25,000

 
25,065

 
23,761

Craft 2013-1, Credit-Linked Note (16)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
9.88% (3M L+925)
 
4/17/22
 
7,625

 
7,722

 
7,250

Craft 2014-1A, Credit-Linked Note (11)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
10.28% (3M L+965)
 
5/15/21
 
42,500

 
42,436

 
40,252

Craft 2015-2, Credit-Linked Note (11)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
9.88% (3M L+925)
 
1/16/24
 
26,000

 
25,902

 
24,207

Dark Castle Holdings, LLC
 
Media – Diversified & Production
 
12.77%
 
N/A
 
24,395

 
1,190

 
1,095

JP Morgan Chase & Co., Credit-Linked Note (17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
12.90% (1M L+1225)
 
12/20/21
 
43,250

 
41,337

 
42,976

NXT Capital CLO 2014-1, LLC, Class E Notes (11)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
6.14% (3M L+550)
 
4/23/26
 
5,000

 
4,696

 
3,935

Total Structured Products and Other—11.2% (10)
 
 
 
 
 
 
 
$
173,723

 
$
173,795


See notes to financial statements.
8

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
June 30, 2016
(In thousands, except share data)

Investment
 
Industry
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Equity
 
 
 
 
 
 
 
 
 
 
Preferred Equity
 
 
 
 
 
Shares
 
 
 
 
Crowley Holdings, Inc., Series A Preferred Stock (11)
 
Transportation – Cargo, Distribution
 
12.00% (10.00% Cash plus 2.00% PIK)
 
N/A
 
32,500

 
$
34,173

 
$
34,286

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

 
27,685

 

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

 
4,171

 
3,750

Varietal Distribution Holdings, LLC, Class A Preferred Unit
 
Transportation – Cargo, Distribution
 
4.00% PIK
 
N/A
 
3,097

 
3,110

 
3,110

Total Preferred Equity—2.7% (10)
 
 
 
 
 
 
 
$
76,002

 
$
41,146

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

 
$
1,714

 
$
1,790

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

 
6,000

 
321

Explorer Coinvest, LLC, Common Stock (17)
 
Business Services
 
N/A
 
N/A
 
N/A

 
574

 
2,066

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

Varietal Distribution Holdings, LLC, Class A Common Unit (13)
 
Transportation – Cargo, Distribution
 
N/A
 
N/A
 
28,028

 
28

 
312

Total Common Equity/Interests—0.6% (10)
 
 
 
 
 
 
 
$
17,991

 
$
9,124

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

 

Spotted Hawk Development, LLC, Common Stock Warrants (13)
 
Energy – Oil & Gas
 
N/A
 
N/A
 
54,545

 
852

 

Total Warrants—0.0% (10)
 
 
 
 
 
 
 
$
2,453

 
$

Total Equity—3.3% (10)
 
 
 
 
 
 
 
$
96,446

 
$
50,270

Total Non-Controlled/Non-Affiliated Investments—100.8% (10)
 
 
 
 
 
$
1,805,634

 
$
1,564,731


See notes to financial statements.
9

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
June 30, 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% Cash (10.00% PIK Toggle)
 
12/31/18
 
$
28,886

 
$
26,665

 
$
15,116

Total First Lien Secured Debt—1.0% (10)
 
 
 
$
26,665

 
$
15,116

Total Secured Debt—1.0% (10)
 
 
 
 
 
 
 
$
26,665

 
$
15,116

Total Corporate Debt—1.0% (10)
 
 
 
 
 
 
 
$
26,665

 
$
15,116

Structured Products and Other
 
 
 
 
 
 
 
 
 
 
Golden Bear Warehouse LLC, Membership Interests (3)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
 N/A
 
N/A
 
$
27,590

 
$
27,590

 
$
46,353

Ivy Hill Middle Market Credit Fund IX, Ltd., Subordinated Notes (3)(11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
17.42%
 
10/18/25
 
12,500

 
9,861

 
9,681

Ivy Hill Middle Market Credit Fund X, Ltd., Subordinated Notes (3)(11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
14.53%
 
7/18/27
 
14,000

 
11,835

 
11,357

MCF CLO I, LLC, Membership Interests (3)(11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
10.64%
 
4/20/23
 
38,918

 
32,625

 
32,671

MCF CLO III, LLC, Class E Notes (11)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
 5.07% (3M L+445)
 
1/20/24
 
12,750

 
11,600

 
10,043

MCF CLO III, LLC, Membership Interests (3)(11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
9.76%
 
1/20/24
 
41,900

 
34,057

 
31,543

Total Structured Products and Other—9.1% (10)
 
 
 
 
 
 
 
$
127,568

 
$
141,648

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—1.7% (10)
 
 
 
 
 
 
 
$
13,911

 
$
26,392

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

 
$
47,392

 
$
25,212

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

 
10,000

 
2,314

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

 
17,505

 
14,204

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

 
1,099

 

Total Common Equity/Interests—2.7% (10)
 
 
 
 
 
 
 
$
75,996

 
$
41,730

Total Equity—4.4% (10)
 
 
 
 
 
 
 
$
89,907

 
$
68,122

Total Non-Controlled/Affiliated Investments—14.5% (10)
 
 
 
 
 
 
 
$
244,140

 
$
224,886


See notes to financial statements.
10

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
June 30, 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)
 
Energy – Oil & Gas
 
 8.00% Cash (10.00% PIK Toggle)
 
3/29/19
 
$
3,000

 
$
3,000

 
$
3,000

Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.), Unfunded Delayed Draw (16)(21)(23)
 
Energy – Oil & Gas
 
 0.00% Unfunded
 
3/29/19
 
7,000

 

 

Solarplicity Group Limited (17)
 
Energy – Electricity
 
 12.50% Cash (12.50% PIK Toggle)
 
11/30/22
 
£
114,965

 
171,323

 
151,963

Total First Lien Secured Debt (excluding Revolvers and Letters of Credit)—10.0% (10)
 
 
 
$
174,323

 
$
154,963

Revolvers and Letters of Credit
 
 
 
 
 
 
 
 
 
 
Merx Aviation Finance, LLC, Revolver (16)
 
Aviation and Consumer Transport
 
12.00%
 
10/31/18
 
$
399,084

 
$
399,084

 
$
399,084

Merx Aviation Finance, LLC, Unfunded Revolver (16)(21)
 
Aviation and Consumer Transport
 
0.00% Unfunded
 
10/31/18
 
100,916

 

 

Merx Aviation Finance, LLC, Letter of Credit (16)(23)
 
Aviation and Consumer Transport
 
2.25%
 
7/13/16
 
177

 

 

Merx Aviation Finance Assets Ireland Limited, Letter of Credit (16)(23)
 
Aviation and Consumer Transport
 
2.25%
 
9/30/16
 
1,800

 

 

Merx Aviation Finance Assets Ireland Limited, Letter of Credit (16)(23)
 
Aviation and Consumer Transport
 
2.25%
 
9/30/16
 
1,800

 

 

Total Revolvers and Letters of Credit—25.7% (10)
 
 
 
 
 
 
 
$
399,084

 
$
399,084

Total First Lien Secured Debt—35.7% (10)
 
 
 
 
 
 
 
$
573,407

 
$
554,047

Second Lien Secured Debt
 
 
 
 
 
 
 
 
 
 
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.) (16)
 
Energy – Oil & Gas
 
8.00% Cash (10.00% PIK Toggle)
 
3/29/21
 
$
25,630

 
$
25,630

 
$
25,630

Total Second Lien Debt—1.6% (10)
 
 
 
 
 
 
 
$
25,630

 
$
25,630

Total Secured Debt—37.3% (10)
 
 
 
 
 
 
 
$
599,037

 
$
579,677

Total Corporate Debt—37.3% (10)
 
 
 
 
 
 
 
$
599,037

 
$
579,677

Equity
 
 
 
 
 
 
 
 
 
 
Common Equity/Interests
 
 
 
 
 
Shares
 
 
 
 
Dynamic Product Tankers, LLC, Class A Units (17)(24)
 
Transportation – Cargo, Distribution
 
N/A
 
N/A
 
N/A

 
$
48,106

 
$
47,738

Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.), Common Stock (13)
 
Energy – Oil & Gas
 
N/A
 
N/A
 
5,000,000

 
30,079

 
24,676

Merx Aviation Finance, LLC, Membership Interests
 
Aviation and Consumer Transport
 
N/A
 
N/A
 
N/A

 
62,754

 
89,014

MSEA Tankers LLC, Class A Units (9)(17)
 
Transportation – Cargo, Distribution
 
N/A
 
N/A
 
N/A

 
85,000

 
85,699

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

 
2,472

 
1,293

Total Common Equity/Interests—16.0% (10)
 
 
 
 
 
 
 
$
228,411

 
$
248,420

Total Equity—16.0% (10)
 
 
 
 
 
 
 
$
228,411

 
$
248,420

Total Controlled Investments—53.3% (10)
 
 
 
 
 
 
 
$
827,448

 
$
828,097

 
 
 
 
 
 
 
 
 
 
 
 
 
Total Investments—168.6% (6)(7)(10)
 
 
 
 
 
 
 
$
2,877,222

 
$
2,617,714

 
 
 
 
 
 
 
 
 
 
 
Liabilities in Excess of Other Assets—(68.6)% (10)
 
 
 
 
 
 
 
 
 
$
(1,065,305
)
Net Assets—100.0%
 
 
 
 
 
 
 
 
 
$
1,552,409


See notes to financial statements.
11

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
June 30, 2016
(In thousands, except share data)


f/k/a - Formerly Known As
(1)
Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (Note 2).
(2)
Solarplicity Group Limited is a GBP denominated equity investment.
(3)
Denotes investments in which the Company owns greater than 25% of the equity, where the governing documents of each entity preclude the Company from exercising a controlling influence over the management or policies of such entity. The Company does not have the right to elect or appoint more than 25% of the directors or another party has the right to elect or appoint more directors than the Company and has the right to appoint certain members of senior management. Therefore, the Company has determined that these entities are not controlled affiliates. As of June 30, 2016, we had a 100%, 32%, 32%, 36%, 97%, and 98% equity ownership interest in Golden Bear Warehouse, LLC; Ivy Hill Middle Market Credit Fund IX, Ltd.; Ivy Hill Middle Market Credit Fund X, Ltd.; LVI Group Investments, LLC; MCF CLO I, LLC; and MCF CLO III, LLC, respectively.
(4)
Denotes investments in which we are an “Affiliated Person,” as defined in the 1940 Act, due to holding the power to vote or owning 5% or more of the outstanding voting securities of the investment but not controlling the company. Fair value as of March 31, 2016 and June 30, 2016 along with transactions during the three months ended June 30, 2016 in these Affiliated investments are as follows:
Name of Issue