Press Release
February 06, 2019

Apollo Investment Corporation Reports Financial Results for the Quarter Ended December 31, 2018

Apollo Investment Corporation Reports Financial Results for the Quarter Ended December 31, 2018

Board of Directors Authorizes a New $50 Million Stock Repurchase Plan

Fiscal Third Quarter and Other Recent Highlights:

  • Net investment income per share for the quarter was $0.45 compared to $0.45 for the quarter ended September 30, 2018
     
  • Net asset value per share as of the end of the quarter was $19.03 compared to $19.40 as of September 30, 2018, a decline of 1.9%
  • Continued to successfully execute portfolio repositioning strategy with core strategies(1) representing 80% of the portfolio(2) as of the end of the quarter
  • Non-core strategies(3) decreased to 16.7%(2) of the total investment portfolio at the end of the quarter, down from 18.3%(2) of the portfolio as of September 30, 2018 driven in part by the receipt of $17.6 million of cash from the return of capital from two oil and gas investments and the partial sale of the one remaining structured credit investment
  • Net leverage(4) as of the end of the quarter was 0.74x, compared to 0.68x as of September 30, 2018
  • Completed a one-for-three reverse stock split of the Company's common stock as of the close of business on November 30, 2018.  The Company's common stock began trading on a split adjusted basis at the market open on December 3, 2018
  • Declared a distribution of $0.45 per share
  • Repurchased 1.5 million shares (adjusted for the reverse stock split) of common stock for an aggregate cost of $22.1 million during the quarter
  • Board of Directors authorizes a new $50 million stock repurchase plan
  • Amended, extended and upsized the senior secured revolving facility on November 19, 2018.  The amendment reduced the asset coverage covenant from 200% to 150%, increased the size of the facility by $400 million to $1.59 billion, and extended the final maturity to November 19, 2023

NEW YORK, Feb. 06, 2019 (GLOBE NEWSWIRE) -- Apollo Investment Corporation (NASDAQ: AINV) or the “Company,” or “Apollo Investment,” today announced financial results for its third fiscal quarter ended December 31, 2018. The Company’s net investment income was $0.45 per share for the quarter ended December 31, 2018, compared to $0.45 per share for the quarter ended September 30, 2018. The Company’s net asset value (“NAV”) was $19.03 per share as of December 31, 2018, compared to $19.40 as of September 30, 2018.

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Note:  All share and per share data shown in this press release have been adjusted for the one-for-three reverse stock split of the Company's common stock which became effective as of the close of business on November 30, 2018.

  1. Core strategies include corporate lending, aviation, life sciences, asset based and lender finance.   
  2. On a fair value basis.   
  3. Non-core strategies include oil & gas, structured credit, renewables, shipping and commodities.  
  4. The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.  

On February 6, 2019, the Board of Directors (the “Board”) declared a distribution of $0.45 per share, payable on April 5, 2019 to shareholders of record as of March 21, 2019.

Mr. Howard Widra, Apollo Investment’s Chief Executive Officer commented, “During the quarter, we continued to de-risk and reposition the portfolio through active management and opportunistic sales by reducing our exposure to concentrated positions and non-core assets, and shifting the portfolio into higher quality, lower risk, diversified corporate loans sourced by the Apollo Direct Origination platform.  Given the continued successful implementation of our strategy, we ended the quarter with core assets representing 80% of the portfolio.  Importantly, investments made during the quarter had the reduced risk profile, in terms of both leverage and credit spread, consistent with our plan to prudently grow the portfolio and increase leverage over time.” Mr. Widra continued, “In addition, the Board’s decision to expand our share repurchase program again underscores our commitment to creating value for our shareholders. We consider stock buybacks below NAV to be a component of our plan to deliver value to our shareholders.”

Stock Repurchase Plan

The Company also announced today that the Board has approved a new stock repurchase plan (the “Repurchase Plan”) to acquire up to $50 million of the Company’s common stock. The new Repurchase Plan is in addition to the Company's existing share repurchase authorization, of which approximately $33.9 million of repurchase capacity remains.  Accordingly, the Company now has approximately $83.9 million available for stock repurchases under its repurchase program.

Since the inception of the share repurchase program in August 2015, the Board has approved five stock repurchase plans for $50 million each, inclusive of the newly authorized Repurchase Plan, for total share repurchase authorization of $250 million.  Since the inception of the share repurchase program and through December 31, 2018, the Company has repurchased $166.1 million of common stock, inclusive of commissions.

Under the Repurchase Plan, the Company may, but is not obligated to, repurchase its outstanding common stock in the open market from time to time provided that the Company complies with the prohibitions under its insider trading policies and the requirements of Rule 10b-18 of the Exchange Act, including certain price, market volume and timing constraints. The Company intends to allocate a portion of the authorized amount under the Repurchase Plan to be repurchased in accordance with Rule 10b5-1 of the Exchange Act (the “10b5-1 Plan”). The Repurchase Plan and the 10b5-1 Plan are designed to allow the Company to repurchase its shares both during its open window periods and at times when it otherwise might be prevented from doing so under applicable insider trading laws or because of self-imposed trading blackout periods. The Repurchase Plan does not have an expiration date and may continue to be modified or discontinued at any time.

Senior Secured Revolving Credit Facility Amendment

On November 19, 2018, the Company amended, extended and upsized its senior secured revolving credit facility (the “Senior Secured Facility”). The amendment reduced the Company’s minimum asset coverage financial covenant from 200% to 150% and includes certain related changes to the borrowing base calculation. This amendment follows the passage of the Small Business Credit Availability Act (“SBCA Act”) in March 2018 and the Board’s approval of the application of the modified asset coverage requirement for the Company in April 2018 which will become effective on April 4, 2019. There was no change in the borrowing cost in connection with the amendment. Lender commitments to the Senior Secured Facility increased by $400 million from $1.19 billion to $1.59 billion. In addition, the final maturity date of the Senior Secured Facility was extended by approximately 2 years from December 21, 2021 to November 19, 2023. For further information, please see the Company’s current report on Form 8-K filed with the Securities and Exchange Commission on November 20, 2018.

FINANCIAL HIGHLIGHTS

($ in billions, except per share data)December 31,
 2018
 September 30,
 2018
 June 30,
 2018
 March 31,
 2018
 December 31,
 2017
Total assets$2.38  $2.39  $2.57  $2.31  $2.42 
Investment portfolio (fair value)$2.31  $2.32  $2.50  $2.25  $2.35 
Debt outstanding$0.99  $0.95  $1.10  $0.79  $0.88 
Net assets$1.32  $1.37  $1.39  $1.42  $1.44 
Net asset value per share$19.03  $19.40  $19.42  $19.67  $19.81 
          
Debt-to-equity ratio0.76x 0.69x 0.79x 0.56x 0.61x
Net leverage ratio (1)0.74x 0.68x 0.78x 0.57x 0.62x

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  1. The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.


PORTFOLIO AND INVESTMENT ACTIVITY

 Three Months Ended
December 31,
 Nine Months Ended
December 31,
(in millions)*2018 2017 2018 2017
Investments made in portfolio companies$305.3  $198.4  $1,027.8  $</