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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): June 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 June 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 June 23, 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 June 1, 2023 (number of shares finalized on June 23, 2023)

     1,024,359      $ 24,491,599  

 

Item 7.01.

Regulation FD Disclosures

June 2023 Distributions

On June 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      $ 0.0167      $ 0.1633  

Class D Common Shares

   $ 0.1600      $ 0.0200      $ 0.0049      $ 0.1751  

The distributions for each class of Shares are payable to shareholders of record as of the open of business on June 30, 2023 and will be paid on or around July 27, 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 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. On June 23, 2023, the Fund announced that its Board declared a special distribution of $0.02 per share for shareholders of record as of July 30, 2023 to be paid on or around August 29, 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 May 31, 2023, unless otherwise noted)

For the month ended May 31, 2023, the Fund’s net asset value (“NAV”) per share was $23.91, down 0.2% from $23.95 as of April 30, 2023. The Fund’s 1-month, 3-month and year-to-date returns through May 31, 2023 were 0.6%, 2.9% and 6.9%, respectively (for Class I common shares).1 The Fund’s annualized distribution rate, including the distribution declared in June and the special distribution announced in May, is 9.0% (for Class I common shares) as of June 2023.2

As of May 31, 2023, our portfolio was approximately $4.5 billion based on fair market value across 143 portfolio companies and 43 industries. Given our focus on large-cap borrowers and our conservative structuring approach, our portfolio remained defensively positioned with 98% first lien debt investments and 98% floating rate debt investments


based on fair market value. The median EBITDA of our portfolio companies was $201 million, and the portfolio’s net loan-to-value, weighted-average net leverage, and interest coverage were 40%, 5.0x, and 2.1x, respectively.3 As of May 31, 2023, there were no investments on non-accrual status.

We continue to manage our capital cushion and liquidity with the lens of maximizing our ability to capitalize on attractive investment opportunities. 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 and remain focused on enhancing our funding sources and liquidity. As of May 31, 2023, the Fund’s net leverage ratio was 0.76x4, and we had approximately $1.4 billion of excess availability under our secured funding facilities.5

 

1.

For Class S common shares, ADS generated returns of 0.5%, 2.7%, and 6.5% for 1-month, 3-month, and year-to-date returns through May 31, 2023 (inception date is February 1, 2022), respectively. For Class D common shares, ADS generated returns of 0.6%, 2.9%, and 6.8% for 1-month, 3-month, and year-to-date returns through May 31, 2023 (inception date is July 1, 2022), respectively.

2.

The annualized distribution rate 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 annualized distribution rate, including the distribution declared in June and excluding the special distribution announced in May, is 8.0% for Class I common shares, 7.2% for Class S common shares, and 7.8% for Class D common shares as of June 2023.

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.

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.

5.

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 May 31, 2023, as determined in accordance with the Fund’s valuation policy, is set forth below.

 

     NAV as of May 31, 2023  

Class I Common Shares

   $ 23.91  

Class S Common Shares

   $ 23.91  

Class D Common Shares

   $ 23.91  

As of May 31, 2023, the Fund’s aggregate NAV was $2.6 billion, the fair value of its investment portfolio was approximately $4.5 billion and it had approximately $2.0 billion of principal debt outstanding, resulting in a debt-to-equity leverage ratio of approximately 0.77x. The Fund’s net leverage ratio as of May 31, 2023 was approximately 0.76x.(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.

 

3


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.

 

     Common Shares
Issued
     Total Consideration  

Offering:

 

Class I Common Shares

     19,472,492      $ 459,356,235  

Class S Common Shares

     16,269,607      $ 388,493,041  

Class D Common Shares

     145,889      $ 3,420,100  

Private Offering:

 

Class I Common Shares

     80,194,482      $ 1,972,751,262  

Class S Common Shares

     —          —    

Class D Common Shares

     —          —    

Total Offering and Private Offering *

     116,082,471      $ 2,824,020,638  

 

*

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: June 23, 2023     By:  

/s/ Kristin Hester

    Name:   Kristin Hester
    Title:   Chief Legal Officer and Secretary

 

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