N-Q 1 d93345dnq.htm APOLLO TACTICAL INCOME FUND Apollo Tactical Income Fund

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

 

  Investment Company Act file number            811-22591                                    

 

Apollo Tactical Income Fund Inc.
(Exact name of registrant as specified in charter)

 

9 West 57th Street
New York, New York 10019
(Address of principal executive offices) (Zip code)

 

Joseph Moroney, President
9 West 57th Street
New York, New York 10019
(Name and address of agent for service)

Registrant’s telephone number, including area code:    (212) 515-3200

Date of fiscal year end:  December 31

Date of reporting period: September 30, 2015


Item 1. Schedule of Investments.

The Schedule(s) of Investments is attached herewith.


Apollo Tactical Income Fund Inc.

Schedule of Investments

September 30, 2015 (unaudited)

 

 

 

   

 

Principal
 Amount ($) 

 

 

 Value ($)    

 

Senior Loans - 103.3%(a)

       

AEROSPACE & DEFENSE - 6.5%

       

Camp International Holding Co.
2013 First Lien Replacement Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 05/31/19(b)

      1,115,780          1,109,738   

2013 Second Lien Replacement Term Loan, (LIBOR + 7.25%, 1.00% Floor), 8.25%, 11/29/19(b)

      1,350,000          1,342,406   

DAE Aviation Holdings, Inc.
Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 07/07/22(b)

      2,780,000          2,786,950   

Photonis Technologies SAS
First Lien Initial Dollar Term Loan, (LIBOR + 7.50%, 1.00% Floor), 8.50%, 09/18/19(b)(c)

      1,970,675          1,916,481   

SRA International, Inc.
Term Loan, (LIBOR + 5.25%, 1.25% Floor), 6.50%, 07/20/18(b)(c)

      2,832,951          2,843,575   

TASC, Inc.
First Lien New Term Loan, (LIBOR + 6.00%, 1.00% Floor), 7.00%, 05/22/20(b)

      475,115          476,897   

First Lien Term Loan, (LIBOR + 6.00%, 1.00% Floor), 7.02%, 05/22/20(b)

      1,356,904          1,361,993   

Second Lien Term Loan, 12.00%, 05/21/21(d)

      2,233,239          2,272,320   

U.S. Joiner Holding Co.
Term Loan, (LIBOR + 6.00%, 1.00% Floor), 7.00%, 04/16/20(b)(c)

      1,634,080          1,617,739   

Vencore, Inc.
Second Lien Term Loan, (LIBOR + 8.00%, 1.00% Floor), 9.00%, 05/23/20(b)

      606,000          596,404   
       

 

 

 
                  16,324,503   
       

 

 

 

AUTOMOTIVE - 0.7%

       

American Tire Distributors, Inc.
Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 09/01/21(b)

      1,867,019          1,873,236   
       

 

 

 

BANKING, FINANCE, INSURANCE & REAL ESTATE - 4.9%

  

Asurion, LLC
Incremental Tranche B-2 Term Loan, (LIBOR + 3.50%, 0.75% Floor), 4.25%, 07/08/20(b)(e)

      74,546          70,087   

Incremental Tranche B-4 Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 08/04/22(b)(e)

      400,293          379,466   

Second Lien Term Loan, (LIBOR + 7.50%, 1.00% Floor), 8.50%, 03/03/21(b)(e)

      4,141,791          3,753,499   
   

 

Principal
 Amount ($) 

 

 

 Value ($)    

 

BANKING, FINANCE, INSURANCE & REAL ESTATE (continued)

  

Hyperion Insurance Group, Ltd.
(United Kingdom) Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 04/29/22(b)(f)

      2,036,433          2,041,524   

Jefferies Finance, LLC (JFIN Co-Issuer Corp.)
Term Loan, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 05/14/20(b)

      1,517,935          1,517,935   

Medical Card System, Inc.
Term Loan (3.00%, PIK), (LIBOR + 10.00%, 2.00% Floor), 11.24%, 03/17/17(b)(c)(g)(h)

      4,321,701          3,176,450   

MMM Holdings, Inc.
MMM Term Loan, (LIBOR + 8.25%, 1.50% Floor), 9.75%, 12/12/17(b)(c)

      1,138,536          867,183   

MSO of Puerto Rico, Inc.
MSO Term Loan, (LIBOR + 8.25%, 1.50% Floor), 9.75%, 12/12/17(b)(c)

      827,710          630,438   
       

 

 

 
                  12,436,582   
       

 

 

 

BEVERAGE, FOOD & TOBACCO - 2.6%

  

Charger OpCo B.V. (Oak Tea, Inc.) (Netherlands)
Term Loan B-1 (USD), (LIBOR + 3.50%, 0.75% Floor), 4.25%, 07/02/22(b)(f)

      3,759,398          3,765,281   

PFS Holding Corp.
Second Lien Term Loan, (LIBOR + 7.25%, 1.00% Floor), 8.25%, 01/31/22(b)

      499,800          389,009   

Winebow Holdings, Inc. (The Vintner Group, Inc.)
Second Lien Term Loan, (LIBOR + 7.50%, 1.00% Floor), 8.50%, 01/02/22(b)

      2,505,795          2,418,092   
       

 

 

 
          6,572,382   
       

 

 

 

CAPITAL EQUIPMENT - 0.9%

       

Zebra Technologies Corp.
Initial Term Loan, (LIBOR + 4.00%, 0.75% Floor), 4.75%, 10/27/21(b)

      2,289,132          2,306,552   
       

 

 

 

CHEMICALS, PLASTICS & RUBBER - 3.2%

  

The Chemours Co.
Tranche B Term Loan, (LIBOR + 3.00%, 0.75% Floor), 3.75%, 05/12/22(b)(e)

      2,361,813          2,077,663   

Chemstralia Pty, Ltd. (Chemstralia Finco, LLC) (Australia)
Initial Term Loan, (LIBOR + 6.25%, 1.00% Floor), 7.25%, 02/28/22(b)(c)(f)

      2,261,363          2,261,363   

Magnetation, LLC / Mag Finance Corp.
Term Loan (3.00% PIK), 12.00%, 12/07/15(c)(d)(h)

      1,140,608          1,104,109   
 

 

See accompanying Notes to Schedule of Investments.  |  1


Apollo Tactical Income Fund Inc.

Schedule of Investments   (continued)

September 30, 2015 (unaudited)

 

 

 

   

 

Principal
 Amount ($) 

 

 

 Value ($)    

 

Senior Loans(a) (continued)

  

CHEMICALS, PLASTICS & RUBBER (continued)

  

PetroChoice Holdings, Inc.
First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 08/19/22(b)(c)(e)

      1,015,038          994,737   

Polymer Group, Inc.
Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 12/19/19(b)

      768,649          769,371   

U.S. Farathane, LLC
Initial Term Loan, (LIBOR + 5.75%, 1.00% Floor), 6.75%, 12/23/21(b)

      940,744          946,614   
       

 

 

 
                    8,153,857   
       

 

 

 

CONSTRUCTION & BUILDING - 0.3%

  

Builders FirstSource, Inc.
Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 07/29/22(b)

      777,273          772,294   
       

 

 

 

CONSUMER GOODS: NON-DURABLE - 4.1%

  

ABG Intermediate Holdings 2, LLC
First Lien Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 05/27/21(b)

      3,496,751          3,492,380   

BRG Sports, Inc.
First Lien Term Loan, (LIBOR + 5.50%, 1.00% Floor), 6.50%, 04/15/21(b)(c)

      1,774,344          1,766,581   

Fender Musical Instruments Corp.
Initial Term Loan, (LIBOR + 4.50%, 1.25% Floor), 5.75%, 04/03/19(b)

      301,250          301,375   

Nine West Holdings, Inc.
Unsecured Initial Term Loan, (LIBOR + 5.25%, 1.00% Floor), 6.25%, 01/08/20(b)

      658,474          384,878   

Polyconcept Investments B.V.
Term Loan, (LIBOR + 4.75%, 1.25% Floor), 6.00%, 06/28/19(b)(c)

      3,266,734          3,266,734   

The Topps Company, Inc.
Term Loan, (LIBOR + 6.00%, 1.25% Floor), 7.25%, 10/02/18(b)(c)

      1,101,985          1,085,455   
       

 

 

 
          10,297,403   
       

 

 

 

CONTAINERS, PACKAGING & GLASS - 4.0%

  

BWay Intermediate Company, Inc.
Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 08/14/20(b)(e)

      3,847,764          3,840,549   

Hoover Group, Inc.
Term Loan, (LIBOR + 6.75%, 1.00% Floor), 7.75%, 01/28/21(b)(c)

      771,370          721,231   

NVLX Acquisition, LLC
First Lien Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 12/05/21(b)

      2,043,355          2,041,659   
   

 

Principal
 Amount ($) 

 

 

 Value ($)    

 

CONTAINERS, PACKAGING & GLASS (continued)

  

Pelican Products, Inc.
First Lien Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 04/10/20(b)

      2,751,236          2,754,675   

Tekni-Plex, Inc.
First Lien Tranche B-1 Term Loan, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 06/01/22(b)

      776,565          775,400   
       

 

 

 
                  10,133,514   
       

 

 

 

ENERGY: OIL & GAS - 7.0%

       

American Energy - Marcellus, LLC
First Lien Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 08/04/20(b)

      1,561,946          902,024   

Azure Midstream Energy, LLC
Term Loan, (LIBOR + 6.50%, 1.00% Floor), 7.50%, 11/15/18(b)(c)

      509,884          438,500   

BlackBrush Oil & Gas, L.P.
Closing Date Second Lien Term Loan, (LIBOR + 6.50%, 1.00% Floor), 7.50%, 07/30/21(b)(e)

      3,700,224          3,148,261   

Chelsea Petroleum Products I, LLC
Term Loan B, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 07/22/22(b)(e)

      1,761,092          1,745,682   

Chief Exploration & Development, LLC
Second Lien Term Loan, (LIBOR + 6.50%, 1.00% Floor), 7.50%, 05/16/21(b)

      2,926,177          2,428,727   

CITGO Holding, Inc.
Term Loan, (LIBOR + 8.50%, 1.00% Floor), 9.50%, 05/12/18(b)(e)

      997,487          985,024   

Drillships Financing Holding, Inc.
Tranche B-1 Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 03/31/21(b)

      3,266,792          1,950,536   

EMG Utica, LLC
Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 03/27/20(b)

      958,677          910,743   

HGIM Corp.
Term Loan A, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 06/18/18(b)(c)

      641,850          539,154   

Southcross Energy Partners, L.P.
Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 08/04/21(b)(c)

      339,541          310,680   

Southcross Holdings Borrower, L.P.
Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 08/04/21(b)

      860,785          648,455   

Sprint Industrial Holdings, LLC
First Lien Term Loan, (LIBOR + 5.75%, 1.25% Floor), 7.00%, 05/14/19(b)(c)

      2,612,788          2,312,317   
 

 

2  |  See accompanying Notes to Schedule of Investments.


Apollo Tactical Income Fund Inc.

Schedule of Investments   (continued)

September 30, 2015 (unaudited)

 

 

 

   

 

Principal
 Amount ($) 

 

 

 Value ($)    

 

Senior Loans(a) (continued)

  

ENERGY: OIL & GAS (continued)

  

Targa Resources Corp.
Term Loan, (LIBOR + 4.75%, 1.00% Floor), 5.75%, 02/27/22(b)

      371,251          371,483   

W3 Co.
First Lien Term Loan, (LIBOR + 4.50%, 1.25% Floor), 5.75%, 03/13/20(b)

      1,098,405          935,473   
       

 

 

 
          17,627,059   
       

 

 

 

ENVIRONMENTAL INDUSTRIES - 1.1%

  

Emerald 2, Limited (United Kingdom)
Facility B-1 Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 05/14/21(b)(c)(f)

      2,901,337          2,892,270   
       

 

 

 

FOREST PRODUCTS & PAPER - 1.6%

  

Caraustar Industries, Inc.
Incremental Term Loan, (LIBOR + 6.75%, 1.25% Floor), 8.00%, 05/01/19(b)

      1,356,921          1,355,788   

Term Loan, (LIBOR + 6.75%, 1.25% Floor), 8.00%, 05/01/19(b)

      2,743,286          2,743,286   
       

 

 

 
                    4,099,074   
       

 

 

 

HEALTHCARE & PHARMACEUTICALS - 10.9%

  

Alvogen Pharma US, Inc.
First Lien Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 04/01/22(b)

      1,420,714          1,417,162   

Concordia Healthcare Corp. (Canada)
Initial Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 04/21/22(b)(f)

      2,493,750          2,494,797   

HC Group Holdings III, Inc.
First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 04/07/22(b)

      500,000          501,875   

Jaguar Holding Co. II / Pharmaceutical Product Development, LLC
Initial Term Loan, (LIBOR + 3.25%, 1.00% Floor), 4.25%, 08/18/22(b)

      2,418,786          2,395,735   

Lanai Holdings II, Inc.
First Lien Term Loan B, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 08/29/22(b)(c)

      2,011,364          2,021,421   

Opal Acquisition, Inc.
Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 11/27/20(b)

      4,470,142          4,390,797   

Premier Dental Services, Inc.
New Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 11/01/18(b)(c)

      3,672,867          3,222,941   

Smile Brands Group, Inc.
Term Loan B, (LIBOR + 6.25%, 1.25% Floor), 7.50%, 08/16/19(b)

      3,611,961          2,541,917   
   

 

Principal
 Amount ($) 

 

 

 Value ($)    

 

HEALTHCARE & PHARMACEUTICALS (continued)

  

Steward Health Care System, LLC
Term Loan, (LIBOR + 5.50%, 1.25% Floor), 6.75%, 04/10/20(b)(c)

      1,273,175          1,266,809   

Surgery Center Holdings, Inc.
First Lien Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 11/03/20(b)

      1,648,487          1,650,803   

Second Lien Initial Term Loan, (LIBOR + 7.50%, 1.00% Floor), 8.50%, 11/03/21(b)(c)

      3,500,000          3,537,188   

U.S. Renal Care, Inc.
Incremental Tranche B-1 Second Lien Term Loan, (LIBOR + 7.50%, 1.00% Floor), 8.50%, 01/03/20(b)(c)

      1,212,000          1,225,635   

Second Lien Term Loan, (LIBOR + 9.00%, 1.25% Floor), 10.25%, 01/03/20(b)(c)

      788,000          789,970   
       

 

 

 
                  27,457,050   
       

 

 

 

HIGH TECH INDUSTRIES - 12.0%

       

Deltek, Inc.
First Lien Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 06/25/22(b)

      1,888,707          1,892,248   

Second Lien Term Loan, (LIBOR + 8.50%, 1.00% Floor), 9.50%, 06/26/23(b)

      1,124,528          1,128,042   

Flexera Software, LLC
Second Lien Term Loan, (LIBOR + 7.00%, 1.00% Floor), 8.00%, 04/02/21(b)(c)

      1,428,292          1,412,224   

GTCR Valor Companies, Inc.
First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 05/30/21(b)

      2,366,123          2,345,420   

Informatica Corp.
Dollar Term Loan, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 08/05/22(b)

      2,769,969          2,757,643   

Landslide Holdings, Inc. (Crimson Acquisition Corp.)
Second Lien Term Loan, (LIBOR + 7.25%, 1.00% Floor), 8.25%, 02/25/21(b)(c)

      1,682,000          1,623,130   

Lanyon Solutions, Inc. (Lanyon, Inc.)
First Lien Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 11/13/20(b)

      578,298          574,203   

Second Lien Term Loan, (LIBOR + 8.50%, 1.00% Floor), 9.50%, 11/15/21(b)

      2,219,037          2,109,938   

MSC.Software Corp.
First Lien Initial Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 05/29/20(b)

      889,737          881,396   
 

 

See accompanying Notes to Schedule of Investments.  |  3


Apollo Tactical Income Fund Inc.

Schedule of Investments   (continued)

September 30, 2015 (unaudited)

 

 

 

   

 

Principal

 Amount ($) 

 

 

 Value ($)    

 

Senior Loans(a) (continued)

  

HIGH TECH INDUSTRIES (continued)

  

Second Lien Initial Term Loan, (LIBOR + 7.50%, 1.00% Floor), 8.50%, 05/31/21(b)(c)

      2,550,000          2,479,875   

Riverbed Technology, Inc.
Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 04/25/22(b)

      1,409,677          1,413,786   

RP Crown Parent, LLC
First Lien New Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 12/21/18(b)

      3,082,984          2,751,564   

Second Lien Term Loan, (LIBOR + 10.00%, 1.25% Floor), 11.25%, 12/21/19(b)

      1,000,000          868,000   

Sophia, L.P.
First Lien Term Loan B, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 09/30/22(b)(e)

      3,722,114          3,719,211   

STG-Fairway Acquisitions, Inc.
First Lien Term Loan, (LIBOR + 5.25%, 1.00% Floor), 6.25%, 06/30/22(b)(c)

      2,351,857          2,354,797   

TIBCO Software, Inc.
Term Loan, (LIBOR + 5.50%, 1.00% Floor), 6.50%, 12/04/20(b)

      1,990,000          1,975,075   
       

 

 

 
                   30,286,552   
       

 

 

 

HOTEL, GAMING & LEISURE - 6.2%

  

CDS U.S. Intermediate Holdings, Inc.
Initial First Lien Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 07/08/22(b)

      590,426          591,347   

Delta 2 (Lux) S.a.r.l. (Luxembourg)
Facility B3 Term Loan (USD), (LIBOR + 3.75%, 1.00% Floor), 4.75%, 07/30/21(b)(e)(f)

      3,586,635          3,529,482   

Diamond Resorts Corp.
Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 05/09/21(b)

      842,616          843,143   

Global Cash Access, Inc.
Term Loan B, (LIBOR + 5.25%, 1.00% Floor), 6.25%, 12/18/20(b)(c)

      1,109,656          1,112,780   

The Intertain Group, Ltd. (The Intertain Group Finance, LLC) (Canada)
Initial Term Loan B, (LIBOR + 6.50%, 1.00% Floor), 7.50%, 04/08/22(b)(c)(f)

      818,182          814,091   

Peppermill Casinos, Inc.
Term Loan B, (LIBOR + 6.00%, 1.25% Floor), 7.25%, 11/09/18(b)(c)

      1,949,594          1,954,468   

Planet Fitness Holdings, LLC
Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 03/31/21(b)

      1,850,281          1,853,760   
   

 

Principal

 Amount ($) 

 

 

 Value ($)    

 

HOTEL, GAMING & LEISURE (continued)

  

Scientific Games International, Inc.
Initial Term Loan B-2, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 10/01/21(b)

      3,524,859          3,485,751   

Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 10/18/20(b)(e)

      1,496,193          1,479,361   
       

 

 

 
                     15,664,183   
       

 

 

 

MEDIA: ADVERTISING, PRINTING & PUBLISHING - 3.0%

  

ALM Media, LLC
First Lien Term Loan B, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 07/31/20(b)(c)

      3,896,264          3,818,339   

F & W Media, Inc.
Initial Term Loan, (LIBOR + 7.25%, 1.25% Floor), 8.50%, 06/30/19(b)(c)

      3,737,855          3,695,804   
       

 

 

 
          7,514,143   
       

 

 

 

MEDIA: BROADCASTING & SUBSCRIPTION - 6.0%

  

Emmis Operating Co.
Term Loan, (LIBOR + 6.00%, 1.00% Floor), 7.00%, 06/10/21(b)(c)

      1,494,804          1,397,642   

Granite Broadcasting Corp.
First Lien Tranche B Term Loan, (LIBOR + 5.50%, 1.25% Floor), 6.75%, 05/23/18(b)(c)

      507,474          508,111   

Hemisphere Media Holdings, LLC (Intermedia Espanol, Inc.)
New Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 07/30/20(b)(c)

      2,538,325          2,487,559   

Learfield Communications, Inc.
Second Lien Initial Term Loan, (LIBOR + 7.75%, 1.00% Floor), 8.75%, 10/08/21(b)

      532,513          531,181   

Neptune Finco Corp.
Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 09/23/22(b)(e)

      4,294,594          4,276,342   

SESAC Holdco II, LLC
First Lien Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 02/07/19(b)

      1,948,088          1,948,088   

Telecommunications Management, LLC
Second Lien Initial Term Loan, (LIBOR + 8.00%, 1.00% Floor), 9.00%, 10/30/20(b)(c)

      1,065,712          1,049,726   

William Morris Endeavor Entertainment, LLC (IMG Worldwide Holdings, LLC)
First Lien Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 05/06/21(b)

      2,995,755          2,987,022   
       

 

 

 
          15,185,671   
       

 

 

 
 

 

4  |  See accompanying Notes to Schedule of Investments.


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

September 30, 2015 (unaudited)

 

 

 

   

Principal
 Amount ($) 

 

 

 Value ($) 

 

 

    

 

Senior Loans(a) (continued)

  

 

MEDIA: DIVERSIFIED & PRODUCTION - 1.6%

  

 

Tech Finance & Co., S.C.A. (Luxembourg)
U.S. Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 07/11/20(b)(f)

      3,976,982          3,970,360     
       

 

 

   

 

METALS & MINING - 0.9%

         

FMG Resources (August 2006) Pty, Ltd. (FMG America Finance, Inc.) (Australia)
Term Loan, (LIBOR + 2.75%, 1.00% Floor), 3.75%, 06/30/19(b)(e)(f)

      998,618          819,246     

Oxbow Carbon, LLC (Oxbow Calcining, LLC)
Second Lien Initial Term Loan, (LIBOR + 7.00%, 1.00% Floor), 8.00%, 01/17/20(b)

      1,538,461          1,423,085     
       

 

 

   
                  2,242,331     
       

 

 

   

 

RETAIL - 6.9%

         

Academy, Ltd.
Initial Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 07/01/22(b)

      1,733,671          1,727,066     

At Home Holding III, Inc.
Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 06/03/22(b)

      563,804          561,690     

Bass Pro Group, LLC
2015 New Term Loan, (LIBOR + 3.25%, 0.75% Floor), 4.00%, 06/05/20(b)

      2,811,270          2,800,728     

Charming Charlie, LLC
Initial Term Loan, (LIBOR + 8.00%, 1.00% Floor), 9.00%, 12/24/19(b)

      1,211,564          1,163,102     

David’s Bridal, Inc.
Initial Term Loan, (LIBOR + 4.00%, 1.25% Floor), 5.25%, 10/11/19(b)

      1,423,819          1,248,212     

Mattress Holding Corp.
Initial Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 10/20/21(b)

      2,666,194          2,670,780     

PetSmart, Inc.
Tranche B-1 Term Loan, (LIBOR + 3.25%, 1.00% Floor), 4.25%, 03/11/22(b)

      3,687,278          3,685,139     

Sears Roebuck Acceptance Corp. (Kmart Corp.)
Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 06/30/18(b)

      3,134,474          3,087,958     

Vince, LLC (Vince Intermediate Holding, LLC)
Term Loan B, (LIBOR + 4.75%, 1.00% Floor), 5.75%, 11/27/19(b)(c)

      415,464          403,001     
       

 

 

   
          17,347,676     
       

 

 

   
   

Principal
 Amount ($) 

 

 

 Value ($) 

 

 

    

 

SERVICES: BUSINESS - 8.1%

         

Carecore National, LLC
Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 03/05/21(b)(c)

      992,443          937,859     

EIG Investors Corp.
Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 11/09/19(b)

      1,866,302          1,870,193     

Element Materials Technology Group U.S. Holdings, Inc. (Element Materials Technology Holding U.K., Ltd.)
Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 08/06/21(b)(c)

      643,280          644,489     

Evergreen Skills Lux S.a.r.l.
First Lien Initial Term Loan, (LIBOR + 4.75%, 1.00% Floor), 5.75%, 04/28/21(b)

      994,975          899,626     

Second Lien Initial Term Loan, (LIBOR + 8.25%, 1.00% Floor), 9.25%, 04/28/22(b)

      1,000,000          860,000     

Genex Holdings, Inc.
First Lien Term Loan B, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 05/28/21(b)

      1,912,044          1,914,435     

Infogroup, Inc.
Term Loan B, (LIBOR + 6.00%, 1.50% Floor), 7.50%, 05/26/18(b)

      3,359,091          3,237,324     

Onex Carestream Finance, L.P.
Second Lien Term Loan, (LIBOR + 8.50%, 1.00% Floor), 9.50%, 12/07/19(b)

      5,448,718          5,278,446     

SGS Cayman, L.P. (Cayman Islands)
Initial Cayman Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 04/23/21(b)(f)

      429,325          430,218     

Stadium Management Corp. (SMG)
2014 Second Lien Term Loan, (LIBOR + 8.25%, 1.00% Floor), 9.25%, 02/27/21(b)(c)

      2,490,000          2,502,450     

Sutherland Global Services, Inc.
Initial U.S. Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 04/23/21(b)

      1,844,358          1,848,195     
       

 

 

   
                20,423,235     
       

 

 

   

 

SERVICES: CONSUMER - 1.8%

         

Laureate Education, Inc.
2018 New Series Extended Term Loan, (LIBOR + 3.75%, 1.25% Floor), 5.00%, 06/15/18(b)(c)

      4,308,536          3,619,170     

NVA Holdings, Inc.
Second Lien Term Loan, (LIBOR + 7.00%, 1.00% Floor), 8.00%, 08/14/22(b)

      955,026          949,057     
       

 

 

   
          4,568,227     
       

 

 

   
 

 

See accompanying Notes to Schedule of Investments.  |  5


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

September 30, 2015 (unaudited)

 

 

 

   

Principal
 Amount ($) 

 

  

 Value ($) 

 

 

    

 

 

Senior Loans(a) (continued)

TELECOMMUNICATIONS - 4.3%

Altice Financing, S.A. (Luxembourg)
Dollar Denominated Tranche Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 02/04/22(b)(e)(f)

      1,490,264           1,487,470     

Global Tel*Link Corp.
First Lien Term Loan, (LIBOR + 3.75%, 1.25% Floor), 5.00%, 05/23/20(b)

      1,195,332           1,174,629     

LTS Buyer, LLC (Sidera Networks, Inc.)
Second Lien Term Loan, (LIBOR + 6.75%, 1.25% Floor), 8.00%, 04/12/21(b)

      1,931,507           1,917,021     

Securus Technologies Holdings, Inc.
Second Lien Initial Term Loan, (LIBOR + 7.75%, 1.25% Floor), 9.00%, 04/30/21(b)

      5,000,000           4,537,500     

U.S. TelePacific Corp.
Advance Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 11/25/20(b)

      1,779,118           1,777,454     
        

 

 

   
                   10,894,074     
        

 

 

   

 

TRANSPORTATION: CARGO - 1.5%

Carrix, Inc.
Term Loan, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 01/07/19(b)(c)

      3,942,052           3,764,660     
        

 

 

   

 

TRANSPORTATION: CONSUMER - 1.2%

Blue Bird Body Co.
Facility Term Loan, (LIBOR + 5.50%, 1.00% Floor), 6.50%, 06/26/20(b)

      1,089,783           1,089,783     

Travel Leaders Group, LLC
Additional Tranche B Loan, (LIBOR + 6.00%, 1.00% Floor), 7.00%, 12/07/20(b)(c)

      1,811,213           1,815,741     
        

 

 

   
           2,905,524     
        

 

 

   

 

UTILITIES: ELECTRIC - 2.0%

Granite Acquisition, Inc.
Second Lien Term Loan B, (LIBOR + 7.25%, 1.00% Floor), 8.25%, 12/19/22(b)(c)

      1,309,090           1,222,363     

Pike Corp.
First Lien Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 12/22/21(b)

      2,706,980           2,713,748     

Second Lien Initial Term Loan, (LIBOR + 8.50%, 1.00% Floor), 9.50%, 06/22/22(b)

      1,000,000           987,500     
        

 

 

   
           4,923,611     
        

 

 

   

Total Senior Loans
(Cost $269,326,278)

           260,636,023     
        

 

 

   
   

Principal
 Amount ($) 

 

  

 Value ($) 

 

 

    

 

 

Corporate Notes and Bonds - 30.9%(d)

  

 

AUTOMOTIVE - 0.4%

          

American Tire Distributors, Inc.
10.25%, 03/01/22(i)

      1,028,000                    1,053,700     
        

 

 

      

 

BANKING, FINANCE, INSURANCE & REAL ESTATE - 2.2%

National Financial Partners Corp.
9.00%, 07/15/21(i)

      4,000,000           3,875,000     

SquareTwo Financial Corp.
11.63%, 04/01/17

      2,647,000           1,654,375     
        

 

 

      
           5,529,375     
        

 

 

      

 

BEVERAGE, FOOD & TOBACCO - 3.7%

Chiquita Brands International, Inc. / LLC
7.88%, 02/01/21

      2,462,000           2,625,107     

Land O’Lakes Capital Trust I
7.45%, 03/15/28(i)

      4,719,000           4,978,545     

NBTY, Inc.
9.00%, 10/01/18

      1,625,000           1,665,625     
        

 

 

      
           9,269,277     
        

 

 

      

 

CAPITAL EQUIPMENT - 1.1%

Optimas OE Solutions Holdings, LLC

          

8.63%, 06/01/21(i)

      3,000,000           2,917,500     
        

 

 

      

 

CHEMICALS, PLASTICS & RUBBER - 2.3%

Magnetation, LLC / Mag Finance Corp.

          

11.00%, 05/15/18(c)(i)(j)

      2,937,000           550,687     

TPC Group, Inc. (Texas Petrochemical)

          

8.75%, 12/15/20(i)

      6,000,000           5,160,000     
        

 

 

      
           5,710,687     
        

 

 

      

 

CONSUMER GOODS: NON-DURABLE - 1.9%

American Greetings Corp.

          

7.38%, 12/01/21

      4,529,000           4,727,144     
        

 

 

      

 

CONTAINERS, PACKAGING & GLASS - 0.4%

Reynolds Group Holdings, Inc.

          

6.88%, 02/15/21

      996,000           1,035,940     
        

 

 

      

 

ENERGY: OIL & GAS - 5.3%

Carrizo Oil & Gas, Inc.

          

7.50%, 09/15/20

      2,158,000           2,028,520     

CITGO Holding, Inc.

          

10.75%, 02/15/20(i)

      3,000,000           2,947,500     

Northern Oil and Gas, Inc.

          

8.00%, 06/01/20

      1,519,000           1,137,351     

Oneok, Inc.

          

7.50%, 09/01/23

      1,250,000           1,207,025     

Sidewinder Drilling, Inc.

          

9.75%, 11/15/19(c)(i)

      6,000,000           3,390,000     

Summit Midstream Holdings, LLC / Summit Midstream Finance Corp.

          

7.50%, 07/01/21

      2,700,000           2,605,500     
        

 

 

      
           13,315,896     
        

 

 

      
 

 

6  |  See accompanying Notes to Schedule of Investments.


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

September 30, 2015 (unaudited)

 

 

 

    

Principal
 Amount ($) 

 

 

 Value ($) 

 

 

    

 

Corporate Notes and Bonds(d) (continued)

HEALTHCARE & PHARMACEUTICALS - 1.3%

  

 

Valeant Pharmaceuticals International, Inc. (Canada)

          

7.50%, 07/15/21(f)(i)

       3,200,000                   3,304,000     
        

 

 

   

 

HIGH TECH INDUSTRIES - 2.3%

Cimpress NV (Netherlands)

          

7.00%, 04/01/22(c)(f)(i)

       4,000,000          3,875,000     

Riverbed Technology, Inc.

          

8.88%, 03/01/23(i)

       2,000,000          1,825,000     
        

 

 

   
           5,700,000     
        

 

 

   

 

MEDIA: ADVERTISING, PRINTING & PUBLISHING - 0.6%

Acosta, Inc.

          

7.75%, 10/01/22(i)

       1,600,000          1,518,000     
        

 

 

   

 

MEDIA: BROADCASTING & SUBSCRIPTION - 3.8%

Columbus International, Inc. (Barbados)

          

7.38%, 03/30/21(f)(i)

       3,285,000          3,412,294     

CSC Holdings, LLC

          

5.25%, 06/01/24

       800,000          633,000     

Neptune Finco Corp.

          

10.13%, 01/15/23(i)

       635,000          643,731     

10.88%, 10/15/25(i)

       2,053,000          2,078,662     

Radio One, Inc.

          

7.38%, 04/15/22(i)

       882,000          823,568     

9.25%, 02/15/20(i)

       2,484,000          2,136,240     
        

 

 

   
           9,727,495     
        

 

 

   

 

MEDIA: DIVERSIFIED & PRODUCTION - 1.0%

SiTV, Inc.

          

10.38%, 07/01/19(c)(i)

       3,420,000          2,530,800     
        

 

 

   

 

SERVICES: CONSUMER - 1.0%

Laureate Education, Inc.

          

9.25%, 09/01/19(i)

       2,000,000          1,577,500     

StoneMor Partners, L.P. / Cornerstone Family Services of WV

          

7.88%, 06/01/21

       987,000          1,019,078     
        

 

 

   
           2,596,578     
        

 

 

   

 

TELECOMMUNICATIONS - 3.6%

Altice U.S. Finance I Corp.

          

5.38%, 07/15/23(i)

       1,333,000          1,283,012     

Avaya, Inc.

          

9.00%, 04/01/19(i)

       5,255,000          4,387,925     

Windstream Services, LLC

          

7.75%, 10/15/20

       4,000,000          3,415,000     
        

 

 

   
           9,085,937     
        

 

 

   

 

Total Corporate Notes and Bonds
(Cost $88,835,081)

           78,022,329     
        

 

 

   

Structured Products - 13.8%(k)

  

 

Anchorage Capital CLO, Ltd. (Cayman Islands)

          

Series 2015-6A, Class E2, 7.11%, 04/15/27(c)(f)(i)(l)

       4,400,000          4,144,341     

Series 2015-7A, Class E2, 7.41%, 10/15/27(c)(f)(i)(l)

       3,000,000          2,980,654     
   

Principal
 Amount ($) 

 

  

 Value ($) 

 

 

    

 

Atlas Senior Loan Fund, Ltd. (Cayman Islands)

          

Series 2012-1A, Class B3L, 7.82%, 08/15/24(c)(f)(i)(l)

      5,000,000           4,596,854     

Cent CLO, L.P. (Cayman Islands)

          

Series 2013-17A, Class D, 6.30%, 01/30/25(c)(f)(i)(l)

      4,000,000           3,400,000     

ECP CLO, Ltd. (Cayman Islands)

          

Series 2014-6, 6.84%,
07/15/26(c)(f)(i)(l)

      4,000,000           3,648,681     

Ivy Hill Middle Market Credit Fund, Ltd. (Cayman Islands)

          

7.58%, 07/18/27(c)(f)(i)

      2,350,000           2,269,561     

JFIN CLO Ltd. (Cayman Islands)

          

Series 2013-1I, Class E, 6.29%, 01/20/25(f)(l)

      2,000,000           1,519,800     

Series 2015-1A, Class E, 5.34%, 03/15/26(c)(f)(i)(l)

      4,500,000           3,705,975     

NXT Capital CLO, LLC

          

Series 2014-1, 5.79%,
04/23/26(c)(i)(l)

      5,000,000           4,393,977     

OCP CLO, Ltd. (Cayman Islands)

          

Series 2014-5A, Class E, 5.55%, 04/26/26(c)(f)(i)(l)

      3,000,000           2,213,628     

Octagon Investment Partners XIV, Ltd. (Cayman Islands)

          

Series 2012-1A, Class E, 6.79%, 01/15/24(c)(f)(i)(l)

      2,200,000           1,867,554     
        

 

 

   

Total Structured Products
(Cost $37,573,660)

           34,741,025     
        

 

 

   
          
   

Share
Quantity

 

  

Value ($)

 

   

 

Preferred Stock - 1.5%

 

BANKING, FINANCE, INSURANCE & REAL ESTATE - 1.5%

Watford Holdings, Ltd. (Bermuda)

          

8.50% (c)(f)

      160,000           3,873,315     
        

 

 

   

 

Total Preferred Stock
(Cost $3,920,000)

           3,873,315     
        

 

 

   

Warrants - 0.0%

BANKING, FINANCE, INSURANCE & REAL ESTATE - 0.0%

Medical Card System, Inc.

          

07/26/18(c)(m)

      50,689               
        

 

 

   

 

Total Warrants
(Cost $ — )

               
        

 

 

   

 

Total Investments-149.5%

           377,272,692     

(Cost of $399,655,019) (n)

          

Other Assets & Liabilities,
Net-5.2%

           13,016,217     

Loan Outstanding-(54.7)%(o)(p)

              (137,976,020  
        

 

 

   

 

Net Assets -100.0%

           252,312,889     
        

 

 

   
 

 

See accompanying Notes to Schedule of Investments.  |  7


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

September 30, 2015 (unaudited)

 

 

 

 

(a)  “Senior Loans” are senior, secured loans made to companies whose debt is rated below investment grade and investments with similar characteristics. Senior Loans typically hold a first lien priority and pay interest at rates that are determined periodically on the basis of a floating base lending rate plus a spread. Unless otherwise identified, all Senior Loans carry a variable rate of interest. These base lending rates are primarily the London Interbank Offered Rate (“LIBOR”) and secondarily the prime rate offered by one or more major U.S. banks and the certificate of deposit rate used by commercial lenders. The rates shown represent the weighted average rate at September 30, 2015. Senior Loans are generally not registered under the Securities Act of 1933 (the “1933 Act”) and often contain certain restrictions on resale and cannot be sold publicly. Senior Loans often require prepayments from excess cash flow or permit the borrower to repay at its election. The degree to which borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with accuracy. As a result, the actual maturity may be substantially less than the stated maturity shown.
(b)  The interest rate on this Senior Loan is subject to a base rate plus 1 month or 3 month LIBOR, which at September 30, 2015 was 0.19% and 0.33%, respectively. As the interest rate is subject to a minimum LIBOR floor which was greater than the 1 month or 3 month LIBOR rate at September 30, 2015, the prevailing rate in effect at September 30, 2015 was the base rate plus the LIBOR floor, except as indicated.
(c)  Fair Value Level 3 security. All remaining securities are categorized as Level 2.
(d)  Fixed rate asset.
(e)  All or a portion of this Senior Loan position has not settled. Full contract rates do not take effect until settlement date, therefore, are subject to change.
(f)  Foreign issuer traded in U.S. dollars.
(g)  The issuer is in default of its payment obligation as of January 30, 2015, as such, income is no longer being accrued.
(h)  Represents a payment-in-kind (“PIK”) security which may pay interest in additional principal amount.
(i) Securities exempt from registration pursuant to Rule 144A under the 1933 Act. These securities may only be resold in transactions exempt from registration to qualified institutional buyers. At September 30, 2015, these securities amounted to $87,489,889, or 34.7% of net assets.
(j)  The issuer is in default of its payment obligation as of May 5, 2015, as such, income is no longer being accrued.
(k)  Structured Products include CLOs. A CLO typically takes the form of a financing company (generally called a special purpose vehicle or “SPV”), created to reapportion the risk and return characteristics of a pool of assets. While the assets underlying CLOs are often Senior Loans or corporate notes and bonds, the assets may also include (i) subordinated loans; (ii) debt tranches of other CLOs; and (iii) equity securities incidental to investments in Senior Loans. The Fund may invest in lower tranches of CLOs, which typically experience a lower recovery, greater risk of loss or deferral or non-payment of interest than more senior tranches of the CLO. A key feature of the CLO structure is the prioritization of the cash flows from a pool of debt securities among the several classes of the CLO. The SPV is a company founded for the purpose of securitizing payment claims arising out of this asset pool. On this basis, marketable securities are issued by the SPV and the redemption of these securities typically takes place at maturity out of the cash flow generated by the collected claims.
(l)  Floating rate asset. The interest rate shown reflects the rate in effect at September 30, 2015.
(m)  Non-income producing asset.
(n)  The aggregate cost of securities for federal income tax purposes was $399,745,470. Cost for U.S. federal income tax purposes differs from book basis primarily due to the deferral of losses from wash sales. Unrealized appreciation and depreciation on investments were as follows:
             

Gross unrealized appreciation

    $ 2,666,540       

Gross unrealized depreciation

     (25,139,318)      
  

 

 

    

Net unrealized depreciation

    $     (22,472,778)      
  

 

 

    

 

(o)  The Fund has granted a security interest in substantially all of its assets in the event of default under the credit facility.
(p)  Principal $138,000,000 less unamortized deferred financing costs.

 

8  |  See accompanying Notes to Schedule of Investments.


Apollo Tactical Income Fund Inc.

Notes to Schedule of Investments

September 30, 2015 (unaudited)

 

 

 

Security Valuation

Apollo Tactical Income Fund Inc. (the “Fund”) values its investments primarily using the mean of the bid and ask prices provided by a nationally recognized security pricing service or broker. Senior Loans, corporate notes and bonds, structured products, preferred stock and warrants are priced based on valuations provided by an approved independent pricing service or broker, if available. If market or broker quotations are not available or a price is not available from an independent pricing service or broker, or if the price provided by the independent pricing service or broker is believed to be unreliable, the security will be fair valued pursuant to procedures adopted by the Fund’s board of directors (the “Board”). In general, the fair value of a security is the amount that the Fund might reasonably expect to receive upon the sale of an asset or pay to transfer a liability in an orderly transaction between willing market participants at the reporting date. Fair value procedures generally take into account any factors deemed relevant, which may include, among others, (i) the nature and pricing history of the security, (ii) the liquidity or illiquidity of the market for the particular security, (iii) recent purchases or sales transactions for the particular security or similar securities, and (iv) press releases and other information published about the issuer. In these cases, the Fund’s net asset value (“NAV”) will reflect the affected portfolio securities’ fair value as determined in the judgment of the Board or its designee instead of being determined by the market. Using a fair value pricing methodology to value securities may result in a value that is different from a security’s most recent sale price and from the prices used by other investment companies to calculate their NAV. Determination of fair value is uncertain because it involves subjective judgments and estimates. There can be no assurance that the Fund’s valuation of a security will not differ from the amount that it realizes upon the sale of such security.

Fair Value Measurements

The Fund has performed an analysis of all existing investments to determine the significance and character of all inputs to their fair value determination. The levels of fair value inputs used to measure the Fund’s investments are characterized into a fair value hierarchy. The three levels of the fair value hierarchy are described below:

Level 1 — Quoted unadjusted prices for identical assets and liabilities in active markets to which the Fund has access at the date of measurement;

Level 2 — Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, but are valued based on executed trades, broker quotations that constitute an executable price, and alternative pricing sources supported by observable inputs which, in each case, are either directly or indirectly observable for the asset in connection with market data at the measurement date; and

Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. In certain cases, investments classified within Level 3 may include securities for which the Fund has obtained indicative quotes from broker-dealers that do not necessarily represent prices the broker may be willing to trade on, as such quotes can be subject to material management judgment. Unobservable inputs are those inputs that reflect the Fund’s own assumptions that market participants would use to price the asset or liability based on the best available information.

At the end of each reporting period, management evaluates the Level 2 and Level 3 assets, if any, for changes in liquidity, including but not limited to: whether a broker is willing to execute at the quoted price, the depth and consistency of prices from independent pricing services, and the existence of contemporaneous, observable trades in the market.

 

  |  9


Apollo Tactical Income Fund Inc.

Notes to Schedule of Investments  (continued)

September 30, 2015 (unaudited)

 

 

 

The valuation techniques used by the Fund to measure fair value at September 30, 2015 maximized the use of observable inputs and minimized the use of unobservable inputs. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Transfers into and out of the levels are recognized at the value at the end of the period. A summary of the Fund’s investments categorized in the fair value hierarchy as of September 30, 2015 is as follows:

 

 

  Apollo Tactical Income Fund Inc.

 

  Assets

 

  

 

Total Fair Value
at
September 30,
2015

 

  

Level 1
Quoted Price

 

  

Level 2
Significant
Observable
Inputs

 

  

Level 3
Significant
Unobservable
Inputs

 

 

Cash and Cash Equivalents

     $ 22,428,255         $ 22,428,255         $         $   

Senior Loans

       260,636,023                     180,208,783           80,427,240   

Corporate Notes and Bonds

       78,022,329                     67,675,842           10,346,487   

Structured Products

       34,741,025                     1,519,800           33,221,225   

Preferred Stock

       3,873,315                               3,873,315   

Warrants

                                       
    

 

 

      

 

 

      

 

 

      

 

 

 

Total Assets

     $ 399,700,947         $ 22,428,255         $ 249,404,425         $ 127,868,267   
    

 

 

      

 

 

      

 

 

      

 

 

 

The following is a reconciliation of Level 3 holdings for which significant unobservable inputs were used in determining fair value as of September 30, 2015:

 

 

  Apollo Tactical Income Fund Inc.

 

 
     

Total Fair
Value

 

   

Senior Loans

 

   

 

Corporate
Notes
and Bonds

 

   

Structured
Products

 

   

Preferred
Stock

 

   

   Warrants   

 

 

 

Fair Value, beginning of period

   $ 129,149,862      $ 67,400,467      $ 27,031,563      $ 30,795,044      $ 3,920,000      $ 2,788   

Purchases, including capitalized PIK

     37,237,410        19,930,591        3,990,000        13,316,819                 

Sales

     (49,738,001     (26,150,763     (15,587,238     (8,000,000              

Accretion/(amortization) of discounts/(premiums)

     173,734        100,521        (70,297     143,510                 

Net realized gain/(loss)

     590,745        209,229        250,362        131,154                 

Change in net unrealized appreciation/(depreciation)

     (3,014,896     (500,320     (948,795     (1,516,308     (46,685     (2,788

Transfers into Level 3

     38,269,152        35,187,664        3,081,488                        

Transfers out of Level 3

     (24,799,739     (15,750,149     (7,400,596     (1,648,994              
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Fair Value, end of period

   $ 127,868,267      $ 80,427,240      $ 10,346,487      $ 33,221,225      $ 3,873,315      $   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investments were transferred into Level 3 during the nine months ended September 30, 2015 due to a decrease in the availability of qualified observable inputs obtained to support the fair value of each investment as assessed by Apollo Credit Management, LLC, the Fund’s investment adviser (the “Adviser”). Transfers out of Level 3 during the nine months ended September 30, 2015 were due to an increase in the availability of qualified observable inputs as assessed by the Adviser. There were no transfers between Level 1 and Level 2 fair value measurement during the period shown. The net change in unrealized appreciation/(depreciation) attributable to Level 3 investments still held at September 30, 2015 was $(2,512,032).

 

10  |  


Apollo Tactical Income Fund Inc.

Notes to Schedule of Investments  (continued)

September 30, 2015 (unaudited)

 

 

 

The following table provides quantitative measures used to determine the fair values of the Level 3 investments as of September 30, 2015:

 

 

  Apollo Tactical Income Fund Inc.

 

  Assets

 

  

Fair Value at    
September 30,    
2015    

 

        

Valuation Technique(s)

 

        

Unobservable Input(s)

 

       

 

Range of
Unobservable
  Input(s) Utilized  

 

 

Senior Loans

    

 

 

 

$76,146,681

 

 

     

 

Independent pricing service and/or broker quotes

     

 

Vendor and/or broker quotes

    

 

N/A

       3,176,450        

Market comparable approach(a)

      Total enterprise value/EBITDA(a)      6.8x
       1,104,109        

Discounted cash flow(b)

      Discount rate(b)      13.40%

Corporate Notes and Bonds

       10,346,487        

Independent pricing service and/or broker quotes

      Vendor and/or broker quotes      N/A

Structured Products

       33,221,225        

Independent pricing service and/or broker quotes

      Vendor and/or broker quotes      N/A

Preferred Stock

       3,873,315        

Discounted cash flow(b)

      Discount rate(b)      8.78%

Warrants

              

Market comparable approach(a)

      Total enterprise value/EBITDA(a)      6.8x
    

 

 

                  

Total Fair Value

       $127,868,267                   
    

 

 

                  
                     

 

(a)  The Fund utilized a market comparable approach to fair value this security. The significant unobservable inputs used in the valuation model were total enterprise value and earnings before interest, taxes, depreciation and amortization (“EBITDA”) based on comparable multiples for a similar investment with similar risks. Significant increases or decreases in either of these inputs in isolation may result in a significantly higher or lower fair value measurement.
(b)  The Fund utilized a discounted cash flow model to fair value this security. The significant unobservable input used in the valuation model was the discount rate, which was determined based on the market rates an investor would expect for a similar investment with similar risks. The discount rate was applied to present value the projected cash flows in the valuation model. Significant increases in the discount rate may significantly lower the fair value of an investment; conversely, significant decreases in the discount rate may significantly increase the fair value of an investment.

For more information with regard to significant accounting policies, refer to the Fund’s most recent semi-annual report filed with the Securities and Exchange Commission.

 

  |  11


Item 2. Controls and Procedures.

 

  (a)

The Fund’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the Fund’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective, as of a date within 90 days of the filing date of this report, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended.

 

  (b)

There were no changes in the Fund’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the Fund’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Fund’s internal control over financial reporting.

Item 3. Exhibits.

Certifications pursuant to Rule 30a-2(a) under the 1940 Act are attached hereto.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant)

 

  Apollo Tactical Income Fund Inc.

By (Signature and Title)

 

           /s/ Joseph Moroney

 

          Joseph Moroney, President

 

          (principal executive officer)

Date

 

      11/20/15

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title)

 

            /s/ Joseph Moroney

 

          Joseph Moroney, President

 

          (principal executive officer)

Date

 

        11/20/15

By (Signature and Title)

 

            /s/ Frank Marra

 

          Frank Marra, Treasurer and Chief Financial Officer

 

          (principal financial officer)

Date

 

        11/20/15