Apollo Debt Solutions BDC caps redemptions as NAV falls to $13.5B

Apollo Debt Solutions BDC said it would honor repurchase requests for 5% of shares after investors tendered 14.7%, its third consecutive quarter of capped redemptions, The DI Wire reported Oct. 20.

Aggregate NAV was $13.5 billion on Sept. 30, down from $14.6 billion on May 31. NAV per share across Class I, S and D fell $0.06, or about 0.25%, to $23.78 from $23.84 a month earlier.

Tenders of 14.7% against a 5% repurchase imply roughly a third of each request filled, assuming the fund allocated pro rata; the report does not describe the allocation method. For advisors whose clients hold the fund, the quarterly queue sets the timeline for an exit. Requests have exceeded the cap in each of the three quarters reported — 11.2% in the first, 16.8% in the second, 14.7% in the third — so the latest figure is down from the second quarter but still almost three times the shares repurchased.

Debt-to-equity leverage rose to about 0.96x on Sept. 30 from 0.73x on March 31, and net leverage was 0.85x, up from 0.77x at the end of May. The fund reported about $12.9 billion of principal debt outstanding; against $13.5 billion of aggregate NAV, that arithmetic lands at roughly 0.96x, matching the reported gross figure.

The portfolio was $25.5 billion at fair value across 377 companies and 56 industries, down from $25.9 billion across 405 companies at the end of May. About 99% of the book was first-lien debt and 96% floated, according to the report.

Ten issuers were on nonaccrual at Sept. 30, about 1.1% of the portfolio at cost and 0.6% at fair value. At March 31 it was 12 issuers, 1% at cost and 0.4% at fair value — fewer names, but a larger fair-value share of the portfolio sitting inside them.

The fund originated about $1.6 billion of private debt investments in the quarter, focused on large-cap issuers, and new directly originated investments carried a weighted average spread of 486 basis points. The report gives the spread, not an all-in yield.

The fund also participated alongside other Apollo-managed funds in a $9 billion equity financing for midstream operator ONEOK Inc., through a minority investment in a newly formed intermediate holding company; Apollo structured and led the deal, according to the report.

October distributions were declared at $0.18 per share gross across all share classes, unchanged from prior months; after shareholder servicing and distribution fees, net amounts were $0.18 for Class I and $0.175 for Class D.

The fund reported about $5 billion of excess availability under its secured funding facilities, which suggests the 0.96x ratio reflects a smaller equity base more than a shortage of committed lending capacity. Whether the fourth-quarter request level stays near three times the 5% cap is the term clients still in the queue are waiting on.