UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Emerging growth company
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Item 3.02. Unregistered Sale of Equity Securities
As of February 1, 2024, Apollo Debt Solutions BDC (the “Fund,” “ADS,” “we” or “our”) sold unregistered Class I common shares of beneficial interest (“Class I Common Shares”) (with the final number of shares being determined on February 26, 2024) to feeder vehicles primarily created to hold the Fund’s Class I Common Shares. The offer and sale of these Class I Common Shares was exempt from the registration provisions of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) and/or Regulation S thereunder (the “Private Offering”). The following table details the shares sold:
| Date of Unregistered Sale |
Amount of Class I Common Shares |
Consideration | ||||||
| As of February 1, 2024 (number of shares finalized on February 26, 2024) |
6,404,915 | $ | 157,658,252 | |||||
Item 7.01. Regulation FD Disclosures
February 2024 Distributions
On February 26, 2024, the Fund declared distributions for each class of its common shares of beneficial interest (the “Shares”) in the amount per share set forth below:
| Gross Distribution |
Previously Declared Special Distribution |
Shareholder Servicing and/or Distribution Fee |
Net Distribution | |||||||||||||
| Class I Common Shares |
$ | 0.1800 | $ | 0.0200 | $ | 0.0000 | $ | 0.2000 | ||||||||
| Class S Common Shares |
$ | 0.1800 | $ | 0.0200 | $ | 0.0166 | $ | 0.1834 | ||||||||
| Class D Common Shares |
$ | 0.1800 | $ | 0.0200 | $ | 0.0049 | $ | 0.1951 | ||||||||
The distributions for each class of Shares are payable to shareholders of record as of the open of business on February 29, 2024 and will be paid on or around March 27, 2024. These distributions will be paid in cash or reinvested in shares of the Fund for shareholders participating in the Fund’s distribution reinvestment plan.
On December 20, 2023, the Fund announced that its Board of Trustees declared special distributions totaling $0.06 per share to be distributed in three consecutive monthly payments of $0.02 per share. Payments will be made to shareholders of record as of January 31, 2024, February 29, 2024 and March 29, 2024, on or around February 28, 2024, March 27, 2024 and April 26, 2024, respectively. The special distributions will be paid in cash or reinvested in shares of the Fund for shareholders participating in the Fund’s distribution reinvestment plan.
Portfolio and Business Commentary
(All figures as of January 31, 2024, unless otherwise noted)
For the month ended January 31, 2024, the Fund’s net asset value (“NAV”) per share was $24.62, compared to $24.63 as of December 31, 2023. The Fund’s 1-month, 3-month, 12-month, and annualized inception-to-date returns through January 31, 2024 for Class I Common Shares were 0.77%, 3.33%, 14.17%, and 7.75%, respectively (inception date was January 7, 2022).1 As of February 26, 2024, the Fund’s annualized distribution rate, including the distribution declared on February 26, 2024 and the special distribution announced on December 20, 2023 was 9.75% (for Class I Common Shares).2
As of January 31, 2024, our portfolio was approximately $7.3 billion based on fair market value across 194 portfolio companies and 48 industries. Our portfolio consisted of 99% first lien debt investments and 96% floating rate debt investments based on fair market value. The weighted average EBITDA of our directly originated debt investments was $249 million3, and the overall portfolio’s net loan-to-value, weighted-average net leverage, and interest coverage were 39%, 4.5x, and 2.3x, respectively.4
2
As of January 31, 2024, the Fund’s net leverage ratio was 0.62x5, and we had approximately $1.7 billion of excess availability under our secured funding facilities.6
Select Recent Transaction Highlights
Excelligence
In January 2024, Apollo served as Joint Lead Arranger on a financing facility for Excelligence Learning Corp. (“Company”) to refinance its existing debt. The Company is a provider of classroom solutions and curriculum for early childhood education. Excelligence offers a variety of products such as classroom content, furniture, arts & crafts and back-to-school kits. Apollo was invited to lead the transaction due to its strong relationship with the sponsor. ADS participated in the transaction alongside other Apollo funds.
| 1. | For Class S common shares, ADS generated returns of 0.70%, 3.11%, 13.21%, and 6.81% for 1-month, 3-month, 12-month, and annualized inception-to-date returns through January 31, 2024 (inception date is February 1, 2022), respectively. For Class D common shares, ADS generated returns of 0.75%, 3.26%, 13.89%, and 13.91% for 1-month, 3-month, 12-month, and annualized inception-to-date returns through January 31, 2024 (inception date is July 1, 2022), respectively. |
| 2. | The annualized distribution rate is calculated by multiplying the sum of the month’s stated base distribution per share and special distribution per share by twelve and dividing the result by the prior month’s NAV per share. The annualized distribution rate, including the distribution declared on February 26, 2024 and excluding the special distribution announced on December 20, 2023, is 8.78% for Class I Common Shares, 7.97% for Class S common shares and 8.54% for Class D common shares as of February 26, 2024. |
| 3. | Based on latest information tracked on our portfolio companies and excludes certain portfolio companies for which these metrics are not meaningful (for instance, portfolio companies with negative EBTIDA). |
| 4. | Based on latest information tracked on our portfolio companies and excludes certain portfolio companies for which these metrics are not meaningful (for instance, portfolio companies with negative EBITDA). Net loan-to-value is net debt through the respective loan tranche in which the Fund has invested divided by the estimated enterprise value of the portfolio company. |
| 5. | The Fund’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. | Includes borrowing base availability under secured financing facilities, cash and net receivables from investments. |
Item 8.01. Other Events.
Net Asset Value and Portfolio Update
The NAV per share of each class of the Fund’s Shares as of January 31, 2024, as determined in accordance with the Fund’s valuation policy, is set forth below.
| NAV as of January 31, 2024 | ||||
| Class I Common Shares |
$ | 24.62 | ||
| Class S Common Shares |
$ | 24.62 | ||
| Class D Common Shares |
$ | 24.62 | ||
As of January 31, 2024, the Fund’s aggregate NAV was $4.5 billion, the fair value of its investment portfolio was approximately $7.3 billion and it had approximately $2.5 billion of principal debt outstanding, resulting in a debt-to-equity leverage ratio of approximately 0.56x. The Fund’s net leverage ratio as of January 31, 2024 was approximately 0.62x.1
| 1. | The Fund’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. |
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Status of Offering
The Fund is currently publicly offering on a continuous basis up to $5.0 billion in Shares (the “Offering”). Additionally, the Fund has sold unregistered shares as part of the Private Offering. The following table lists the Shares issued and total consideration for both the Offering and the Private Offering as of the date of this filing, reflective of transfers between share classes. The table below does not include Shares sold through the Fund’s distribution reinvestment plan. The Fund intends to continue selling Shares in the Offering and the Private Offering on a monthly basis.
| Common Shares Issued | Total Consideration | |||||||
| Offering: |
| |||||||
| Class I Common Shares |
52,872,992 | $ | 1,278,017,355 | |||||
| Class S Common Shares |
40,683,370 | $ | 986,283,356 | |||||
| Class D Common Shares |
462,524 | $ | 11,201,764 | |||||
| Private Offering: |
| |||||||
| Class I Common Shares |
111,910,951 | $ | 2,749,788,454 | |||||
| Class S Common Shares |
— | — | ||||||
| Class D Common Shares |
— | — | ||||||
| Total Offering and Private Offering * |
205,929,837 | $ | 5,025,290,929 | |||||
| * | Amounts may not sum due to rounding. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| APOLLO DEBT SOLUTIONS BDC | ||||||
| Date: February 26, 2024 | By: | /s/ Kristin Hester | ||||
| Name: | Kristin Hester | |||||
| Title: | Chief Legal Officer and Secretary | |||||
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