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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 23, 2023

 

 

Apollo Debt Solutions BDC

(Exact name of Registrant as specified in its charter)

 

 

 

Delaware   814-01424   86-1950548
(State or other jurisdiction
of incorporation)
  (Commission
File Number)
 

(I.R.S. Employer

Identification No.)

 

9 West 57th Street

New York, New York

  10019
(Address of principal executive offices)   (Zip Code)

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

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act: None

 

Title of each class

 

Trading
Symbol(s)

 

Name of each exchange
on which registered

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 


Item 3.02. Unregistered Sale of Equity Securities

As of May 1, 2023, Apollo Debt Solutions BDC (the “Fund,” “ADS,” “we” or “our”) sold unregistered Class I common shares of beneficial interest (with the final number of shares being determined on May 22, 2023) to feeder vehicles primarily created to hold the Fund’s Class I shares. The offer and sale of these Class I 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 May 1, 2023 (number of shares finalized on May 22, 2023)

     760,799      $ 18,219,775  

Item 7.01. Regulation FD Disclosures

May 2023 Distributions

On May 23, 2023, 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

   $ 0.1600      $ 0.0200      $ 0.0000      $ 0.1800  

Class S Common Shares

   $ 0.1600      $ 0.0200      $ 0.0173      $ 0.1627  

Class D Common Shares

   $ 0.1600      $ 0.0200      $ 0.0051      $ 0.1749  

The distributions for each class of Shares are payable to shareholders of record as of the open of business on May 31, 2023 and will be paid on or around June 28, 2023. 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 April 20, 2023, the Fund announced that its Board declared a special distribution of $0.02 per share for shareholders of record as of May 31, 2023 to be paid on or around June 28, 2023. On May 23, 2023, the Fund announced that its Board declared a special distribution of $0.02 per share for shareholders of record as of June 30, 2023 to be paid on or around July 27, 2023. 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 April 30, 2023, unless otherwise noted)

For the month ended April 30, 2023, the Fund’s net asset value (“NAV”) per share was $23.95, up 0.6% from $23.82 as of March 31, 2023. The Fund’s 1-month, 3-month and year-to-date returns through April 30, 2023 were 1.3%, 3.6% and 6.3%, respectively (for Class I common shares).1 The Fund currently offers a distribution rate of 9.0% (for Class I common shares), including the special dividend announced in April.2

As of April 30, 2023, our portfolio was approximately $4.4 billion based on fair market value across 140 portfolio companies and 44 industries. Our portfolio remained defensively positioned with 98% first lien debt investments and 98% floating rate debt investments based on fair market value. The Fund continues to focus on investing at the top-of-the capital structure in scaled borrowers that have resilient business models. The median EBITDA of our portfolio

 


companies was $209 million, and the portfolio’s net loan-to-value, weighted-average net leverage, and interest coverage were 40%, 5.0x, and 2.2x, respectively.3 As of April 30, 2023, there were no investments on non-accrual status.

The Fund continues to operate with sufficient liquidity and remains focused on optimizing our sources of funding. Given the current market environment, we have chosen to operate at the low end of our target leverage range of 1.0x to 1.25x net debt to equity. As of April 30, 2023, the Fund’s net leverage ratio was 0.77x, and we had approximately $1.4 billion of excess availability under our secured funding facilities.4

 

1.

For Class S common shares, ADS generated returns of 1.2%, 3.4%, and 6.0% for 1-month, 3-month, and year-to-date returns through April 30, 2023 (inception date is February 1, 2022), respectively. For Class D common shares, ADS generated returns of 1.3%, 3.6%, and 6.2% for 1-month, 3-month, and year-to-date returns through April 30, 2023 (inception date is July 1, 2022), respectively.

2.

Annualized distribution yield 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 Fund currently offers a distribution rate of 8.0% for Class I common shares, 7.2% for Class S common shares, and 7.8% for Class D common shares, excluding the special dividend announced in April.

3.

Based on latest information tracked on our portfolio companies and excludes certain portfolio companies for which these metrics are not meaningful. Net debt through the respective loan tranche in which the Fund has invested divided by the estimated enterprise value of the portfolio company.

4.

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 as of April 30, 2023, as determined in accordance with the Fund’s valuation policy, is set forth below.

 

     NAV as of
April 30, 2023
 

Class I Common Shares

   $ 23.95  

Class S Common Shares

   $ 23.95  

Class D Common Shares

   $ 23.95  

As of April 30, 2023, the Fund’s aggregate NAV was $2.5 billion, the fair value of its investment portfolio was approximately $4.4 billion and it had approximately $2.0 billion of principal debt outstanding, resulting in a debt-to-equity leverage ratio of approximately 0.80x. The Fund’s net leverage ratio as of April 30, 2023 was approximately 0.77x.(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.

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. 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.

 

3


     Common
Shares Issued
     Total
Consideration
 

Offering:

 

Class I Common Shares

     17,243,658      $ 406,066,585  

Class S Common Shares

     14,829,368      $ 354,058,101  

Class D Common Shares

     144,216      $ 3,380,100  

Private Offering:

 

Class I Common Shares

     79,170,124      $ 1,948,259,663  

Class S Common Shares

     —          —    

Class D Common Shares

     —          —    
  

 

 

    

 

 

 

Total Offering and Private Offering *

     111,387,365      $ 2,711,764,449  
  

 

 

    

 

 

 

 

*

Amounts may not sum due to rounding.

 

 

4


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: May 23, 2023     By:  

/s/ Kristin Hester

    Name:   Kristin Hester
    Title:   Chief Legal Officer and Secretary

 

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