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Subsequent Events
3 Months Ended
Mar. 31, 2014
Subsequent Events [Abstract]  
Subsequent Events
SUBSEQUENT EVENTS
On April 8, 2014, the Company issued 150,000 Class A shares in settlement of vested RSUs. This issuance did not cause a material change to the Company's ownership interest in the Apollo Operating Group.
On May 8, 2014, the Company declared a cash distribution of $0.84 per Class A share, which will be paid on May 30, 2014 to holders of record on May 20, 2014.
On April 4, 2014, Athene Holding completed a private placement offering of common equity in which it raised $1.048 billion of primary commitments from third-party institutional and certain existing investors in Athene Holding (the “Athene Private Placement”). Shares in the Athene Private Placement were offered at a price per common share of Athene Holding of $26.
In connection with the Athene Private Placement, Athene Holding amended its registration rights agreement to provide (i) investors who are party to such agreement, including AAA Investments, the potential opportunity for liquidity on their shares of Athene Holding through sales in registered public offerings over a 15 month period beginning on the date of Athene Holding’s initial public offering (the “Athene IPO”) and (ii) Athene Holding the right to cause certain investors who are party to the registration rights agreement to include in such offerings a certain percentage of their Athene Holding shares subject to the terms and conditions set forth in the agreement. However, pursuant to the registration rights agreement, any shares of Athene Holding held by Apollo will not be subject to such arrangements and instead will be subject to a lock-up period of two years following the effective date of the registration statement relating to the Athene IPO, but Athene Holding will not have the right to cause any shares owned by Apollo to be included in the Athene IPO or any follow-on offering.
The Athene Services Agreement was also amended in connection with the Athene Private Placement (the “Amended Athene Services Agreement”). The Amended Athene Services Agreement adjusts the calculation of Athene Holding’s capital and surplus on which the fees payable thereunder are based, downward by an amount equal to (x) the equity capital raised in the Athene Private Placement and (y) certain disproportionate increases to the statutory capital and surplus of Athene, as compared to the stockholders’ equity of Athene calculated on a GAAP basis, as a result of future acquisitions by Athene.
In connection with the Athene Private Placement, the limited partnership agreement of AAA and the AAA Services Agreement were also amended to align applicable terms more closely with the liquidity terms of Athene Holding’s amended registration rights agreement.
The amendment to the AAA Services Agreement (the “Amended AAA Services Agreement”) provides that the AAA Unwind Fee will be payable in pro rata increments to Apollo only when, as and if AAA distributes shares of Athene Holding (or the proceeds thereof) to its unitholders. Pursuant to the Amended AAA Services Agreement, any portion of such AAA Unwind Fee earned in 2014 and 2015, will be calculated based on a cap of $25 million and $20 million, respectively, and there will be no payment of any portion of the AAA Unwind Fee earned in 2016 or thereafter.
In addition, in connection with the Athene Private Placement, both the Athene Services Derivative and the AAA Services Derivative were settled on April 29, 2014 by delivery to Apollo of shares of Athene Holding, and as a result, such derivatives were terminated. Following settlement of these derivatives, future monitoring fees and management fees paid to Apollo pursuant to the Amended Athene Services Agreement and the Amended AAA Services Agreement, respectively, will be paid on a quarterly basis in arrears by delivery to Apollo of shares of Athene Holding.
The initial funding of the Athene Private Placement was consummated on April 28, 2014. Once the Athene Private Placement is fully drawn down, AAA Investments’ economic ownership of Athene is expected to decrease to approximately 51.5% (without giving effect to restricted common shares issued under Athene’s management equity plan, conversion to common shares of AAA Investments’ note receivable from Athene, or common shares to be issued under the Amended AAA Services Agreement or the Amended Athene Services Agreement subsequent to April 29, 2014).
As a result of the above transactions, Apollo directly owned 3.8% (without giving effect to restricted common shares issued under Athene’s management equity plan or common shares to be issued under the Amended Services Agreement or the Amended Athene Services Agreement subsequent to April 29, 2014) of the economic equity of Athene Holding as of April 29, 2014, after adjusting Athene Holding’s equity for the impact of the full draw down related to the Athene Private Placement. Shares of Athene Holding to be received by Apollo for monitoring fees for the full year 2014 and AAA management fees for the last three quarters of 2014 were not yet issued to Apollo as of April 29, 2014.
In connection with the Athene Private Placement, Athene raised an additional $80 million of third party capital at $26 per share, all of which was utilized to buy back some of the shares of one of its existing investors at a price of $26 per share in a transaction that was consummated on April 29, 2014. Athene is currently in the process of raising additional capital from certain affiliates of Athene and its affiliates.