Press Release
August 06, 2020

Apollo Investment Corporation Reports Financial Results for the Quarter Ended June 30, 2020

Apollo Investment Corporation Reports Financial Results for the Quarter Ended June 30, 2020

Fiscal First Quarter and Other Recent Highlights:

  • Net investment income per share for the quarter was $0.43 compared to $0.59 for the quarter ended March 31, 2020
  • Net asset value per share as of the end of the quarter was $15.29 compared to $15.70 as of March 31, 2020, a 2.6% decrease due to a net loss on non-core and legacy assets (1) partially offset by a net gain on the corporate lending portfolio (2)
  • New investment commitments made during the quarter totaled $17 million(3)
  • Gross fundings during the quarter totaled $138 million consisting of $53 million of term loans and $85 million of revolvers
  • Gross exits during the quarter totaled $233 million consisting of $68 million of term loan sales, $49 million of term loan repayments, and $116 million of gross revolver paydowns
  • Net paydowns during the quarter totaled $95 million, consisting of $64 million of net term loan paydowns and $31 million of net revolver paydowns
    – Net paydowns subsequent to quarter end total approximately $50 million(4)
  • Net leverage (5) as of the end of the quarter was 1.66x, down from 1.71x as of March 31, 2020
  • Received 97% of contractual interest payments during the quarter
  • Declared a base distribution of $0.31 per share and a supplemental distribution of $0.05 per share for the quarter ending September 30, 2020
  • $243 million of immediately available liquidity and $205 million of additional capacity under the Senior Secured Facility as of June 30, 2020 (6)
  • Kroll Bond Rating Agency affirmed the Company's investment grade rating in July (7)

NEW YORK, Aug. 06, 2020 (GLOBE NEWSWIRE) -- Apollo Investment Corporation (NASDAQ: AINV) or the “Company,” or “Apollo Investment,” today announced financial results for its first fiscal quarter ended June 30, 2020. The Company’s net investment income was $0.43 per share for the quarter ended June 30, 2020, compared to $0.59 per share for the quarter ended March 31, 2020. The Company’s net asset value (“NAV”) was $15.29 per share as of June 30, 2020, compared to $15.70 as of March 31, 2020.

On August 6, 2020, the Company’s Board of Directors (the “Board”) declared a base distribution of $0.31 per share payable on October 7, 2020 to shareholders of record as of September 21, 2020. On August 6, 2020, the Company’s Board also declared a supplemental distribution of $0.05 per share payable on October 7, 2020 to shareholders of record as of September 21, 2020. Going forward, in addition to a quarterly base distribution of $0.31 per share, the Board expects to declare a quarterly supplemental distribution in an amount to be determined each quarter. There can be no assurances that the Board will continue to declare a base distribution of $0.31 per share or a supplemental distribution.

Mr. Howard Widra, Apollo Investment’s Chief Executive Officer commented, “During the quarter, we made considerable progress reducing the Fund’s leverage by exiting approximately $233 million of investments on a gross basis, or $95 million on a net basis, which reduced AINV’s net leverage to 1.66x at the end of June. Since the end of the quarter, we have continued to reduce our leverage and we have visibility into meaningful additional repayments for the remainder of the September quarter and for the December quarter. We remain focused on further deleveraging to within our target range of 1.4x to 1.6x over the coming quarters.” Mr. Howard Widra, continued, “In light of the challenges and uncertainty created by the COVID-19 pandemic, and our plans to further reduce the Fund’s leverage, we have reassessed the long-term earnings power of the portfolio and have concluded that it is prudent to adjust the distribution at this time. We believe a distribution level should reflect the prevailing market environment and be aligned with the long-term earnings power of the portfolio. To that end, the Board of Directors, at the recommendation of management, has declared a 31-cent base distribution and a 5-cent supplemental distribution for the quarter. Going forward, in addition to a quarterly base distribution of 31 cents per share, the Company’s Board of Directors expects to also declare a supplemental distribution in an amount to be determined each quarter. The base / supplemental distribution construct is intended to provide shareholders with a minimum annualized yield on NAV of 8%, a level which is consistent with some of our peers, and allow for some upside via a supplemental distribution.”

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(1) Non-core and legacy assets include oil & gas, renewables, shipping, commodities, and legacy assets.
(2) Corporate lending portfolio includes leveraged lending, life sciences, asset based and lender finance. Excludes Merx Aviation and non-core and legacy assets.
(3) For corporate lending portfolio.
(4) From July 1, 2020 through August 4, 2020. Includes one loan with documents in escrow.
(5) 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.
(6) As of June 30, 2020, aggregate lender commitments under the Senior Secured Facility (the “Facility”) totaled $1.81 billion and there were $1.410 billion of outstanding borrowings under the Facility and $6.2 million of letters of credit issued under the Facility. Accordingly, there was $394 million of unused capacity under the Facility as of June 30, 2020, which is subject to compliance with a borrowing base that applies different advance rates to different types of assets in the Company’s portfolio. As of June 30, 2020, the Company had immediate access to $227 million under the Facility based on the Company’s borrowing base and $167 million of additional capacity. Adjusting for the sale of over $50 million of assets that occurred near the end of the quarter, but settled subsequent to quarter end, the Company had immediate access to $243 million under the Facility based on the Company’s borrowing base, and $205 million of additional capacity under the Facility.
(7) Kroll Bond Rating Agency affirmed the Company's issuer and senior unsecured debt ratings of ‘BBB-’ with a Negative Outlook in July 2020.

FINANCIAL HIGHLIGHTS

($ in billions, except per share data) June 30,
2020
 March 31,
2020
 December 31,
2019
 September 30,
2019
 June 30,
2019
Total assets $2.81  $2.87  $3.06  $2.89  $2.70 
Investment portfolio (fair value) $2.67  $2.79  $2.97  $2.80  $2.62 
Debt outstanding $1.76  $1.79  $1.79  $1.58  $1.35 
Net assets $1.00  $1.02  $1.22  $1.25  $1.29 
Net asset value per share $15.29  $15.70  $18.27  $18.69  $19.00 
           
Debt-to-equity ratio 1.76  x    1.75 x    1.47 x    1.26 x    1.05 x   
Net leverage ratio (1) 1.66  x    1.71 x    1.43 x    1.24 x    1.03 x   

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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 June 30,
(in millions)* 2020 2019
Investments made in portfolio companies $137.9  $435.3 
Investments sold (69.1) (9.6)
Net activity before repaid investments 68.8  425.7 
Investments repaid (163.8) (210.7)
Net investment activity $(95.0) $215.0 
     
Portfolio companies at beginning of period 152  113 
Number of new portfolio companies 1  21 
Number of exited portfolio companies (4) (5)
Portfolio companies at end of period 149  129 
     
Number of investments made in existing portfolio companies 35  30 

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* Totals may not foot due to rounding.

OPERATING RESULTS

  Three Months Ended June 30,
(in millions)* 2020 2019
Net Investment Income $28.2  $34.5 
Net Realized and Change in Unrealized Gains (Losses) (25.2) (10.7)
Net Increase in Net Assets Resulting from Operations $3.0  $23.8 
     
(per share)* (1)    
Net Investment Income $0.43  $0.50 
Net Realized and Change in Unrealized Gains (Losses) $(0.39) $(0.16)
Earnings per share — basic $0.05  $0.35 

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* Totals may not foot due to rounding.

(1) Based o