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July 1, 2011
VIA EDGAR AND BY FEDERAL EXPRESS
Ms. Jennifer Gowetski, Esq.
Ms. Folake Ayoola, Esq.
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: | Apollo Residential Mortgage, Inc. |
Amendment No. 4 to Registration Statement on Form S-11 |
Filed July 1, 2011 |
File No. 333-172980 |
Dear Ms. Gowetski/Ms. Ayoola:
On behalf of our client, Apollo Residential Mortgage, Inc., a Maryland corporation (the Company), set forth below are the responses of the Company to the comments of the staff of the Division of Corporation Finance of the Securities and Exchange Commission (the Staff), contained in the Staffs letter dated May 26, 2011 (the May 26 Letter), with respect to Amendment No. 2 to the Registration Statement on Form S-11 (File No. 333-172980) filed by the Company on May 10, 2011 (the Registration Statement). For convenience of reference, each Staff comment contained in the May 26 Letter is reprinted below in bold and italics, numbered to correspond with paragraph numbers assigned in the May 26 Letter, and is followed by the corresponding response of the Company.
We have enclosed with this letter a marked copy of Amendment No. 4 to the Registration Statement (Amendment No. 4), which was filed today by the Company via EDGAR, reflecting all changes to the Registration Statement. All page references in the responses are to pages of the marked copy of Amendment No. 4. Capitalized terms used and not otherwise defined in this letter that are defined in the Registration Statement shall have the meanings set forth in the Registration Statement.
Our Target Assets, page 8
1. | We note your response to comment 5 of our letter dated May 5, 2011. Please revise your summary to include the anticipated allocation of your fully-diversified portfolio. |
In response to the Staffs comment, the Company has revised the prospectus on pages 7 and 86 under the captions Prospectus SummaryOur Investment Strategy and
Ms. Jennifer Gowetski Ms. Folake Ayoola July 1, 2011 |
Page 2 |
BusinessOur Investment Strategy, respectively, to include the anticipated allocation of the Companys fully-diversified portfolio.
Management Agreement, page 12
2. | Please clarify why you disclose a range for your management fee or revise to provide an estimate of your management fee. |
In response to the Staffs comment, the Company has revised the prospectus on page 14 under the caption Prospectus SummaryOur Management Agreement to provide an estimate of the management fee.
About Apollo, page 76
3. | We note your response to comment 8 of our letter dated May 5, 2011 and the revised disclosure. Please balance your disclosure to provide the total return to investors assuming that you are not able to sell the illiquid assets. In addition, please provide summarized operating results for the periods for which you provide returns. |
In response to the Staffs comment and based on discussions with the Staff, the Company has revised the disclosure in the prospectus on page 76 under the caption BusinessAbout Apollo with respect to the sale of Vantiums remaining illiquid assets. In addition, the Company has revised the prospectus on page 77 under the caption BusinessAbout Apollo to provide summary financial data for Vantium for the years ended December 31, 2010, 2009 and 2008.
Notes to Balance Sheet
Note 3Significant Accounting Policies
Underwriting Commissions and Offering Costs, page F-4
4. | We note your response to prior comment 11 and reissue the comment in part. Please provide such disclosure within the significant accounting policies discussion of the notes to balance sheet or tell us why such disclosure is not warranted. Also, based on your disclosure on page 68, it is unclear if you believe that the contingent liability will be probable and estimable at the time of the offering. If so, please tell us how you made this determination. |
The Company advises the Staff that it has not revised the disclosure in the notes to the Companys balance sheet because no contingent liability existed at the time of the audit of the balance sheet and no contingent liability will exist until the completion of the proposed offering with respect to the refund of the initial underwriting discount payment
Ms. Jennifer Gowetski Ms. Folake Ayoola July 1, 2011 |
Page 3 |
to be made by ARM Manager, LLC, the Companys Manager and the refund of the deferred underwriting discount. Accordingly, disclosure of the Companys accounting policy with respect to this arrangement is not a meaningful policy for the Company at this time. In further response to the Staffs comment, the Company has revised the prospectus on page 67 under the caption Managements Discussion and Analysis of Financial Condition and Results of OperationsCritical Accounting Policies and Use of EstimatesDeferred Underwriting Discount and Refund of Managers Payment of Initial Underwriting Discount to clarify that the payment of the deferred underwriting discount and the refund of the Companys Managers payment of the initial underwriting discount will be recorded as a liability of the Company with a corresponding reduction in additional paid-in-capital upon completion of the offering and that the payment will be probable and the amount estimable.
We thank the Staff for its attention to the Companys filing and we look forward to hearing from you regarding Amendment No. 4 to the Registration Statement. If you have any questions or comments regarding the foregoing, or have additional questions or comments, please contact the undersigned at 212-878-8527 or Andrew S. Epstein at 212-878-8332.
Very truly yours,
/s/ Jay L. Bernstein
Jay L. Bernstein
Enclosures
cc: | Securities and Exchange Commission |
Mark Rakip |
Jessica Barberich |
Rochelle Plesset |
Apollo Residential Mortgage, Inc. |
Stuart A. Rothstein |
Michael A. Commaroto |
ARM Manager, LLC |
John J. Suydam |
Latham & Watkins LLP |
William J. Cernius |
Raymond Y. Lin |
Clifford Chance US LLP |
Andrew S. Epstein |