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 September 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 November 7, 2016
$0.001 par value
 
219,779,154
 



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)

 
September 30, 2016
 
March 31, 2016
 
(Unaudited)
 
 
Assets
 
 
 
Investments at fair value:
 
 
 
Non-controlled/non-affiliated investments (cost — $1,605,296 and $2,052,896, respectively)
$
1,410,698

 
$
1,790,294

Non-controlled/affiliated investments (cost — $363,985 and $216,202, respectively)
287,569

 
272,558

Controlled investments (cost — $859,936 and $829,029, respectively)
850,301

 
853,977

Total investments at fair value (cost — $2,829,217 and $3,098,127, respectively)
2,548,568

 
2,916,829

Cash
65,744

 
16,521

Foreign currencies (cost — $4,369 and $2,354, respectively)
4,368

 
2,384

Receivable for investments sold
71

 
79,625

Interest receivable
15,323

 
29,749

Dividends receivable
6,992

 
9,509

Deferred financing costs
12,447

 
14,497

Prepaid expenses and other assets
1,051

 
9,523

Total Assets
$
2,654,564

 
$
3,078,637

 
 
 
 
Liabilities
 
 
 
Debt
$
1,014,794

 
$
1,312,960

Payable for investments purchased
24,126

 
25,091

Distributions payable
33,314

 
45,231

Management and performance-based incentive fees payable
22,350

 
31,124

Interest payable
7,034

 
7,444

Accrued administrative services expense
1,412

 
2,015

Other liabilities and accrued expenses
9,596

 
9,191

Total Liabilities
$
1,112,626

 
$
1,433,056

Commitments and contingencies (Note 8)
 
 
 
Net Assets
$
1,541,938

 
$
1,645,581

 
 
 
 
Net Assets
 
 
 
Common stock, $0.001 par value (400,000,000 shares authorized; 221,994,770 and 226,156,496 shares issued and outstanding, respectively)
$
222

 
$
226

Paid-in capital in excess of par
3,002,583

 
3,026,922

Accumulated underdistributed net investment income
68,504

 
71,231

Accumulated net realized loss
(1,282,620
)
 
(1,288,141
)
Net unrealized loss
(246,751
)
 
(164,657
)
Net Assets
$
1,541,938

 
$
1,645,581

 
 
 
 
Net Asset Value Per Share
$
6.95

 
$
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 September 30,
 
Six Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Investment Income
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments:
 
 
 
 
 
 
 
Interest income
$
42,406

 
$
70,255

 
$
90,750

 
$
143,829

Dividend income
1,069

 
911

 
2,173

 
1,787

Other income
349

 
2,828

 
2,047

 
6,145

Non-controlled/affiliated investments:
 
 
 
 
 
 
 
Interest income
369

 
224

 
630

 
451

Dividend income
4,656

 
9,503

 
7,703

 
18,670

Other income

 
70

 
70

 
227

Controlled investments:
 
 
 
 
 
 
 
Interest income
17,427

 
10,629

 
34,672

 
21,183

Dividend income
2,750

 
4,000

 
7,450

 
7,731

Other income

 

 

 
63

Total Investment Income
$
69,026

 
$
98,420

 
$
145,495

 
$
200,086

Expenses
 
 
 
 
 
 
 
Management fees
$
13,302

 
$
16,727

 
$
27,700

 
$
34,079

Performance-based incentive fees
1,943

 
10,774

 
10,393

 
22,641

Interest and other debt expenses
14,438

 
21,764

 
31,231

 
44,200

Administrative services expense
2,642

 
1,650

 
4,168

 
3,083

Other general and administrative expenses
2,550

 
2,725

 
7,589

 
4,889

Total expenses
34,875

 
53,640

 
81,081

 
108,892

Management and performance-based incentive fees waived
(5,302
)
 
(4,722
)
 
(11,019
)
 
(9,237
)
Expense reimbursements
(84
)
 
(59
)
 
(168
)
 
(117
)
Net Expenses
$
29,489

 
$
48,859

 
$
69,894

 
$
99,538

Net Investment Income
$
39,537

 
$
49,561

 
$
75,601

 
$
100,548

Net Realized and Change in Unrealized Gains (Losses)
 
 
 
 
 
 
 
Net realized gains (losses):
 
 
 
 
 
 
 
Non-controlled/non-affiliated investments
$
17,348

 
$
(34,124
)
 
$
(40,127
)
 
$
(76,785
)
Non-controlled/affiliated investments
(21,257
)
 

 
44,574

 
(67
)
Controlled investments

 
3,148

 
(191
)
 
(39,714
)
Foreign currency transactions
905

 
819

 
1,265

 
5,483

Net realized gains (losses)
(3,004
)
 
(30,157
)
 
5,521

 
(111,083
)
Net change in unrealized losses:
 
 
 
 
 
 

Non-controlled/non-affiliated investments
46,305

 
(48,094
)
 
65,026

 
(43,863
)
Non-controlled/affiliated investments
(36,007
)
 
12,916

 
(129,794
)
 
28,733

Controlled investments
(10,284
)
 
7,980

 
(34,583
)
 
34,753

Foreign currency translations
4,567

 
6,047

 
17,257

 
(4,444
)
Net change in unrealized losses
4,581

 
(21,151
)
 
(82,094
)
 
15,179

Net Realized and Change in Unrealized Gains (Losses)
$
1,577

 
$
(51,308
)
 
$
(76,573
)
 
$
(95,904
)
Net Increase (Decrease) in Net Assets Resulting from Operations
$
41,114

 
$
(1,747
)
 
$
(972
)
 
$
4,644

Earnings (Loss) Per Share — Basic
$
0.18

 
$
(0.01
)
 
$
0.00

 
$
0.02

Earnings (Loss) Per Share — Diluted
N/A

 
$
(0.01
)
 
N/A

 
$
0.02


See notes to financial statements.
2

Table of Contents

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

 
Six Months Ended 
 September 30, 2016
 
Year Ended 
 March 31, 2016
 
(Unaudited)
 
 
Operations
 
 
 
Net investment income
$
75,601

 
$
193,257

Net realized gains (losses)
5,521

 
(195,364
)
Net change in unrealized losses
(82,094
)
 
(42,419
)
Net Decrease in Net Assets Resulting from Operations
$
(972
)
 
$
(44,526
)
 
 
 
 
Distributions to Shareholders
 
 
 
Distribution of net investment income
$
(78,328
)
 
$
(111,853
)
Distribution of return of capital

 
(73,211
)
Net Decrease in Net Assets Resulting from Distributions to Shareholders
$
(78,328
)
 
$
(185,064
)
 
 
 
 
Capital Share Transactions
 
 
 
Repurchase of common stock
$
(24,343
)
 
$
(62,437
)
Net Decrease in Net Assets Resulting from Capital Share Transactions
$
(24,343
)
 
$
(62,437
)
 
 
 
 
Net Assets
 
 
 
Net decrease in net assets during the period
$
(103,643
)
 
$
(292,027
)
Net assets at beginning of period
1,645,581

 
1,937,608

Net Assets at End of Period
$
1,541,938

 
$
1,645,581

 
 
 
 
Capital Share Activity
 
 
 
Shares repurchased during the period
(4,161,726
)
 
(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
221,994,770

 
226,156,496


See notes to financial statements.
3

Table of Contents

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

 
Six Months Ended September 30,
 
2016
 
2015
Operating Activities
 
 
 
Net increase (decrease) in net assets resulting from operations
$
(972
)
 
$
4,644

Net realized (gains) losses
(5,521
)
 
111,083

Net change in unrealized losses
82,094

 
(15,179
)
Net amortization of premiums and accretion of discounts on investments
(2,620
)
 
(3,521
)
Accretion of discount on notes
298

 
300

Amortization of deferred financing costs
2,985

 
3,788

Increase from foreign currency transactions
1,265

 
6,129

Changes in operating assets and liabilities:
 
 
 
Payment-in-kind interest and dividends capitalized
(21,147
)
 
(21,732
)
Purchases of investments
(251,591
)
 
(726,206
)
Proceeds from sales and repayments of investments
627,113

 
895,793

Decrease in interest receivable
14,540

 
14,181

Decrease (increase) in dividends receivable
2,517

 
(7,215
)
Decrease in prepaid expenses and other assets
8,472

 
5,340

Decrease in management and performance-based incentive fees payable
(8,774
)
 
(7,804
)
Decrease in interest payable
(410
)
 
(106
)
Decrease in accrued administrative services expense
(603
)
 
(369
)
Increase in other liabilities and accrued expenses
405

 
424

Net Cash Provided by Operating Activities
$
448,051

 
$
259,550

Financing Activities
 
 
 
Issuances of debt
$
506,747

 
$
1,011,973

Payments of debt
(788,487
)
 
(1,146,162
)
Financing costs paid and deferred
(485
)
 
(5,576
)
Repurchase of common stock
(24,343
)
 
(21,193
)
Distributions paid
(90,245
)
 
(94,697
)
Net Cash Used in Financing Activities
$
(396,813
)
 
$
(255,655
)
 
 
 
 
Cash and Foreign Currencies
 
 
 
Net increase in cash and foreign currencies during the period
$
51,238

 
$
3,895

Effect of foreign exchange rate changes
(31
)
 
204

Cash and foreign currencies at beginning of period
18,905

 
8,417

Cash and Foreign Currencies at End of Period
$
70,112

 
$
12,516

 
 
 
 
Supplemental Disclosure of Cash Flow Information
 
 
 
Cash interest paid
$
27,120

 
$
38,480

 
 
 
 
Non-Cash Activity
 
 
 
Payment-in-kind income
$
12,544

 
$
16,328


See notes to financial statements.
4

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
September 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)
 
 
 
 
 
 
 
 
American Media, Inc. (16)
 
Advertising, Printing & Publishing
 
8.50% (1M L+750, 1.00% Floor)
 
8/24/20
 
$
270

 
$
262

 
$
262

American Media, Inc. (16)
 
Advertising, Printing & Publishing
 
8.50% (1M L+750, 1.00% Floor)
 
8/24/20
 
10,396

 
10,092

 
10,085

Aptevo Therapeutics Inc. (9)(16)(23)
 
Healthcare & Pharmaceuticals
 
8.10% (3M L+760, 0.50% Floor)
 
2/1/21
 
8,571

 
8,547

 
8,529

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

 
(31
)
 
(32
)
Aventine Renewable Energy Holdings, Inc.
 
Chemicals, Plastics & Rubber
 
10.50% Cash (15.00% PIK Toggle)
 
9/24/17
 
7,399

 
7,648

 
6,842

ChyronHego Corporation (18)
 
High Tech Industries
 
6.93% (3M L+593, 1.00% Floor)
 
3/9/20
 
36,786

 
36,192

 
36,050

Delta Educational Systems, Inc. (14)(16)
 
Education
 
16.00% (3M L+1400 PIK, 2.00% Floor)
 
12/11/16
 
7,334

 
7,049

 

Dodge Data & Analytics LLC
 
Business Services
 
9.75% (3M L+875, 1.00% Floor)
 
10/31/19
 
52,368

 
51,667

 
50,928

ECN Holding Company (Emergency Communications Network) (16)(18)
 
High Tech Industries
 
9.50% (3M L+850, 1.00% Floor)
 
6/12/21
 
11,128

 
10,992

 
10,961

ECN Holding Company (Emergency Communications Network) (16)(18)
 
High Tech Industries
 
9.50% (6M L+850, 1.00% Floor)
 
6/12/21
 
11,128

 
10,992

 
10,961

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
 
14,719

 
14,311

 
14,424

LabVantage Solutions Limited (16)(17)
 
High Tech Industries
 
9.00% (3M E+800, 1.00% Floor)
 
12/29/20
 
13,484

 
14,082

 
14,850

Magnetation, LLC (14)
 
Metals & Mining
 
12.00% PIK
 
10/14/16
 
14,296

 
12,427

 
43

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

 
59,305

 
53,668

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
 
7,972

 
7,972

 
7,892

My Alarm Center, LLC, Unfunded Term Loan B (8)(16)(21)(23)
 
Business Services
 
0.35% Unfunded
 
1/9/19
 
789

 

 
(8
)
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

 
3,084

My Alarm Center, LLC, Unfunded Term Loan C (8)(16)(21)(23)
 
Business Services
 
0.35% Unfunded
 
1/9/19
 
997

 

 
(10
)
Nextech Systems, LLC (18)
 
High Tech Industries
 
8.25% (3M L+725, 1.00% Floor)
 
6/22/21
 
22,500

 
21,968

 
22,050

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

 
9,875

 
9,727

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

 
33,205

 
25,228

Spotted Hawk Development, LLC (14)
 
Energy – Oil & Gas
 
19.00% (13.00% Cash plus 6.00% PIK)
 
12/31/19
 
88,292

 
84,380

 
63,661

Telestream Holdings Corporation (18)
 
High Tech Industries
 
7.77% (3M L+677, 1.00% Floor)
 
1/15/20
 
30,699

 
30,699

 
30,085


See notes to financial statements.
5

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
September 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
 
$
11,650

 
$
11,651

 
$
11,651

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

 
32,367

 
31,881

Total First Lien Secured Debt (excluding Revolvers and Letters of Credit)—29.4% (10)
 
$
509,302

 
$
453,067

Revolvers and Letters of Credit
 
 
 
 
 
 
 
 
 
 
Alliant Holdings Intermediate, LLC, Unfunded Revolver (8)(16)(21)(23)
 
Insurance
 
0.50% Unfunded
 
8/14/20
 
$
14,794

 
$
(1,322
)
 
$
(1,272
)
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
)
Alliant Holdings Intermediate, LLC, Letter of Credit (8)(16)(23)
 
Insurance
 
3.375%
 
6/30/17
 
17

 

 
(2
)
Alliant Holdings Intermediate, LLC, Letter of Credit (8)(16)(23)
 
Insurance
 
3.375%
 
7/29/17
 
80

 

 
(7
)
American Media, Inc., Revolver (16)(23)
 
Advertising, Printing & Publishing
 
8.50% (1M L+750, 1.00% Floor)
 
8/24/20
 
296

 
296

 
296

American Media, Inc., Revolver (16)(23)
 
Advertising, Printing & Publishing
 
8.50% (1M L+750, 1.00% Floor)
 
8/24/20
 
711

 
711

 
711

American Media, Inc., Unfunded Revolver (16)(21)(23)
 
Advertising, Printing & Publishing
 
0.50% Unfunded
 
8/24/20
 
565

 
(52
)
 

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

 

 

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

 
3,303

 
3,303

Confie Seguros Holding II Co., Revolver (16)(23)
 
Insurance
 
7.00% (P+350)
 
11/9/17
 
615

 
615

 
606

Confie Seguros Holding II Co., Unfunded Revolver (8)(16)(21)(23)
 
Insurance
 
0.50% Unfunded
 
11/9/17
 
3,724

 
(131
)
 
(56
)
Confie Seguros Holding II Co., Letter of Credit (8)(16)(23)
 
Insurance
 
4.50%
 
1/13/17
 
161

 

 
(2
)
Endologix, Inc., Revolver (9)(16)(17)(23)
 
Healthcare & Pharmaceuticals
 
4.60% (1M L+410, 0.50% Floor)
 
7/29/20
 
56

 
56

 
55

Endologix, Inc., Unfunded Revolver (8)(9)(16)(17)(21)(23)
 
Healthcare & Pharmaceuticals
 
0.50% Unfunded
 
7/29/20
 
4,944

 
(24
)
 
(24
)
LabVantage Solutions Limited, Unfunded Revolver (8)(16)(17)(21)(23)
 
High Tech Industries
 
0.50% Unfunded
 
12/29/20
 
3,435

 
(102
)
 
(77
)
My Alarm Center, LLC, Revolver (16)(23)
 
Business Services
 
11.00% (P+700)
 
1/9/19
 
750

 
750

 
750

My Alarm Center, LLC, Unfunded Revolver (16)(21)(23)
 
Business Services
 
0.35% Unfunded
 
1/9/19
 
5,500

 

 

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

 
(38
)
 
(1,200
)
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—0.2% (10)
 
 
 
 
 
 
 
$
4,062

 
$
3,071

Total First Lien Secured Debt—29.6% (10)
 
 
 
 
 
 
 
$
513,364

 
$
456,138


See notes to financial statements.
6

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

Investment
 
Industry
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
Second Lien Secured Debt
 
 
 
 
 
 
 
 
 
 
1A Smart Start LLC
 
Consumer Services
 
9.50% (3M L+850, 1.00% Floor)
 
8/22/22
 
$
35,000

 
$
34,384

 
$
34,370

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

 
34,268

 
34,878

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

 
14,659

 
14,841

Active Network, Inc. (16)
 
Business Services
 
9.50% (3M L+850, 1.00% Floor)
 
11/15/21
 
19,672

 
19,601

 
19,475

Active Network, Inc. (16)
 
Business Services
 
10.50% (3M L+950, 1.00% Floor)
 
11/15/21
 
6,006

 
5,886

 
5,931

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

 
23,032

 
23,309

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

 
7,895

 
7,830

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

 
39,385

 
39,458

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

 
22,262

 
22,567

Delta Educational Systems, Inc. (14)(16)
 
Education
 
16.00% PIK
 
5/12/17
 
7,759

 
7,460

 

Delta Educational Systems, Inc. (14)(16)
 
Education
 
35.00% PIK
 
6/10/18
 
1,538

 
1,328

 

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

 
14,906

 
15,303

Elements Behavioral Health, Inc.
 
Healthcare & Pharmaceuticals
 
13.00% (3M L+1200 PIK, 1.00% Floor)
 
2/11/20
 
10,477

 
10,418

 
8,591

Garden Fresh Restaurant Corp. (14)(16)
 
Hotel, Gaming, Leisure, Restaurants
 
7.75% (3M L+625 PIK, 1.50% Floor)
 
1/1/19
 
9,282

 
7,746

 

Garden Fresh Restaurant Corp. (14)(16)
 
Hotel, Gaming, Leisure, Restaurants
 
15.00% (3M L+1350 PIK, 1.50% Floor)
 
1/1/19
 
49,986

 
45,904

 

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

 
9,761

 
9,975

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

 
24,693

 
25,000

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

 
13,645

 
13,958

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

 
6,589

 
6,375

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

 
10,094

 
10,187

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

 
16,878

 
16,956

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

 
18,140

 
18,441

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

 
13,350

 
13,179

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

 
19,522

 
19,900

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

 
17,535

 
17,640

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

 
17,913

 
14,005

Sequential Brands Group, Inc. (17)
 
Consumer Goods – Durable
 
9.52% (1M L+900)
 
7/1/22
 
17,600

 
17,388

 
17,389


See notes to financial statements.
7

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

Investment
 
Industry
 
Interest
Rate (20)
 
Maturity
Date
 
Par (12)
 
Cost
 
Fair
Value (1)
SiTV, Inc. (11)
 
Broadcasting & Subscription
 
10.375%
 
7/1/19
 
$
2,219

 
$
2,219

 
$
1,530

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

 
19,649

 
19,453

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

 
15,586

 
9,617

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

 
19,814

 
19,600

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

 
14,666

 
14,250

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

 
33,726

 
33,660

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

 
16,274

 
16,088

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

 
9,754

 
9,750

Total Second Lien Secured Debt—34.6% (10)
 
 
 
 
 
 
 
$
606,330

 
$
533,506

Total Secured Debt—64.2% (10)
 
 
 
 
 
 
 
$
1,119,694

 
$
989,644

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

 
$
14,814

 
$
13,580

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

 
73,602

 
72,825

Delta Educational Systems, Inc. (14)(16)
 
Education
 
16.00% PIK
 
5/12/17
 
22,811

 
20,665

 

Lonestar Intermediate Super Holdings, LLC
 
Insurance
 
10.00% Cash (3M L+900 Cash, 1.00% Floor) (3M L+975 PIK Toggle, 1.00% Floor)
 
8/10/21
 
4,865

 
4,817

 
4,842

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

 
35

 
46

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
 
7,934

 
7,933

 
8,013

Total Unsecured Debt—15.2% (10)
 
 
 
 
 
 
 
$
256,866

 
$
234,306

Total Corporate Debt—79.4% (10)
 
 
 
 
 
 
 
$
1,376,560

 
$
1,223,950

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

 
$
25,460

 
$
32,161

Craft 2013-1, Credit-Linked Note (11)(16)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
9.93% (3M L+925)
 
4/17/22
 
25,000

 
25,049

 
24,500

Craft 2013-1, Credit-Linked Note (11)(16)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
9.93% (3M L+925)
 
4/17/22
 
7,625

 
7,713

 
7,472

Craft 2014-1A, Credit-Linked Note (11)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
10.47% (3M L+965)
 
5/15/21
 
42,500

 
42,413

 
41,650

Craft 2015-2, Credit-Linked Note (11)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
9.93% (3M L+925)
 
1/16/24
 
26,000

 
25,870

 
24,700

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

 
1,189

 
2,244

NXT Capital CLO 2014-1, LLC, Class E Notes (11)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
6.21% (3M L+550)
 
4/23/26
 
5,000

 
4,702

 
4,251

Total Structured Products and Other—8.9% (10)
 
 
 
 
 
 
 
$
132,396

 
$
136,978


See notes to financial statements.
8

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
September 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

 
$
34,344

 
$
34,344

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

 
4,396

 
4,260

Varietal Distribution Holdings, LLC, Class A Preferred Unit
 
Transportation – Cargo, Distribution
 
4.00% PIK
 
N/A
 
2,594

 
2,607

 
2,607

Total Preferred Equity—2.7% (10)
 
 
 
 
 
 
 
$
75,896

 
$
41,211

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

 
$
1,714

 
$
1,460

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

 
6,000

 

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

 
574

 
2,203

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

 

 
143

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

 
28

 
253

Total Common Equity/Interests—0.5% (10)
 
 
 
 
 
 
 
$
17,991

 
$
8,559

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)
 
 
 
 
 
 
 
$
96,340

 
$
49,770

Total Non-Controlled/Non-Affiliated Investments—91.5% (10)
 
 
 
 
 
$
1,605,296

 
$
1,410,698


See notes to financial statements.
9

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
September 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% PIK Toggle (10.00% Cash)
 
12/31/18
 
$
29,624

 
$
26,665

 
$
14,864

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

 
$
14,864

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

 
$
14,864

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—1.0% (10)
 
 
 
 
 
 
 
$
27,003

 
$
15,202

Structured Products and Other
 
 
 
 
 
 
 
 
 
 
Golden Bear Warehouse LLC, Membership Interests (3)(17)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
N/A
 
N/A
 
$
40,446

 
$
40,446

 
$
73,457

Ivy Hill Middle Market Credit Fund IX, Ltd., Subordinated Notes (3)(11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
16.70%
 
10/18/25
 
12,500

 
9,588

 
9,462

Ivy Hill Middle Market Credit Fund X, Ltd., Subordinated Notes (3)(11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
14.03%
 
7/18/27
 
14,000

 
11,557

 
10,863

MCF CLO I, LLC, Membership Interests (3)(11)(17)(22)
 
Diversified Investment Vehicles, Banking, Finance, Real Estate
 
13.85%
 
4/20/23
 
38,918

 
31,151

 
32,530

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

 
11,630

 
10,487

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

 
32,706

 
33,276

Total Structured Products and Other — 11.0% (10)
 
 
 
 
 
 
 
$
137,078

 
$
170,075

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

 
$
20,458

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

 
$
26,391

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

 
$
68,702

 
$
25,327

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

 
10,000

 
890

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

 
17,505

 
10,951

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

 
1,099

 

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

 
40,517

 
36,321

Total Common Equity/Interests—4.8% (10)
 
 
 
 
 
 
 
$
137,823

 
$
73,489

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

 
$
48,170

 
$
2,412

Total Warrants—0.2% (10)
 
 
 
 
 
 
 
$
48,170

 
$
2,412

Total Equity—6.7% (10)
 
 
 
 
 
 
 
$
199,904

 
$
102,292

Total Non-Controlled/Affiliated Investments—18.7% (10)
 
 
 
 
 
 
 
$
363,985

 
$
287,569


See notes to financial statements.
10

Table of Contents
APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS (Unaudited)
September 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
 
$
6,500

 
$
6,500

 
$
6,500

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
 
3,500

 

 

Solarplicity Group Limited (17)
 
Energy – Electricity
 
 12.50% Cash (12.50% PIK Toggle)
 
11/30/22
 
£
141,565

 
206,416

 
184,020

Total First Lien Secured Debt (excluding Revolvers and Letters of Credit)—12.3% (10)
 
 
 
$
212,916

 
$
190,520

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%
 
7/13/17
 
177

 

 

Merx Aviation Finance Assets Ireland Limited, Letter of Credit (16)(23)
 
Aviation and Consumer Transport