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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2021
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 814-00646
APOLLO INVESTMENT CORPORATION
(Exact name of Registrant as specified in its charter)
Maryland52-2439556
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
9 West 57th Street
37th Floor
New York, New York
10019
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (212) 515-3450
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, $0.001 par valueAINVNASDAQ Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨  No x
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨  No x
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x  No ¨
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).    Yes x  No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filer
¨
Non-accelerated filer
¨
Smaller reporting company
¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.Yes x  No  ¨
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes ¨  No x
The aggregate market value of the common equity held by non-affiliates of the Registrant as of September 30, 2020 was $0.54 billion (based on the closing sale price of the Registrant’s Common Stock on that date as reported on the NASDAQ Global Select Market). For the purposes of calculating this amount only, all executive officers and Directors are “affiliates” of the Registrant.
As of May 19, 2021, there were 65,259,176 shares of the Registrant’s Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s Proxy Statement for the Annual Meeting of Stockholders to be held on August 10, 2021 are incorporated by reference in Part III of this Form 10-K.



APOLLO INVESTMENT CORPORATION
Table of Contents
Page
PART I
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
PART II
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
PART III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
PART IV
Item 15.


PART I
Item 1. Business
In this report, the terms the “Company,” “Apollo Investment,” “AIC,” “we,” “us,” and “our” refer to Apollo Investment Corporation unless the context specifically states otherwise.
General
Apollo Investment Corporation, a Maryland corporation organized on February 2, 2004, is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). In addition, for tax purposes we have elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). We commenced operations on April 8, 2004 upon completion of our initial public offering that raised $870 million in net proceeds from selling 62 million shares of common stock at a price of $15.00 per share (20.7 million shares at a price of $45.00 per share adjusted for the one-for-three reverse stock split). Since then, and through March 31, 2021, we have raised approximately $2.21 billion in net proceeds from additional offerings of common stock and we have repurchased common stock for $223.1 million.
Our investment objective is to generate current income and capital appreciation. We invest primarily in various forms of debt investments, including secured and unsecured debt, loan investments and/or equity in private middle-market companies. We may also invest in the securities of public companies and in structured products and other investments such as collateralized loan obligations (“CLOs”) and credit-linked notes (“CLNs”). A CLO is a form of securitization in which the cash flows of a portfolio of loans are pooled and passed on to different classes of owners in various tranches. A CLN is a note where the payment of principal and/or interest is based on the performance of one or more debt obligations. CLNs are not securitizations.
Our portfolio is comprised primarily of investments in debt, including secured and unsecured debt of private middle-market companies that, in the case of senior secured loans, generally are not broadly syndicated and whose aggregate tranche size is typically less than $250 million. Our portfolio may also include equity interests such as common stock, preferred stock, warrants or options. In this Form 10-K, we use the term “middle-market” to refer to companies with annual revenues between $50 million and $2 billion. While we primarily invest in investments in U.S. secured and unsecured loans, other debt securities and equity, we may also invest a portion of the portfolio in other investment opportunities, including foreign securities and structured products. Most of the debt instruments we invest in are unrated or rated below investment grade, which is often an indication of size, credit worthiness and speculative nature relative to the capacity of the borrower to pay interest and principal. Generally, if the Company's unrated investments were rated, they would be rated below investment grade. These securities, which are often referred to as “junk” or “high yield,” have predominantly speculative characteristics with respect to the issuer's capacity to pay interest and repay principal. They may also be difficult to value and are illiquid.
During the year ended March 31, 2021, we invested $0.6 billion across 14 new and 75 existing portfolio companies primarily through a combination of primary and secondary debt investments. This compares to $1.9 billion across 60 new and 87 existing portfolio companies during the year ended March 31, 2020. Investments sold or repaid during the year ended March 31, 2021 totaled $1.0 billion versus $1.3 billion during the year ended March 31, 2020. The weighted average yields on our secured debt portfolio, unsecured debt portfolio, total debt portfolio and total portfolio as of March 31, 2021 at our current cost basis were 8.0%, 5.3%, 8.0% and 6.5%, respectively. As of March 31, 2020, the yields were 8.7%, 0.0%, 8.7% and 8.0%, respectively. The portfolio yields may be higher than an investor’s yield on an investment in us due to sales load and other expenses. For the years ended March 31, 2021 and March 31, 2020, the total return based on the change in market price per share and taking into account dividends and distributions, if any, reinvested in accordance with the dividend reinvestment plan was 135.1% and (48.6)%, respectively. Such returns do not reflect any sales load that stockholders may have paid in connection with their purchase of shares of our common stock.
As of March 31, 2021, our portfolio consisted of 135 portfolio companies and was invested 88% in secured debt, 1% in unsecured debt, 0% in structured products and other, 1% in preferred equity, and 10% in common equity/interests and warrants measured at fair value. As of March 31, 2020, our portfolio consisted of 152 portfolio companies and was invested 94% in secured debt, 0% in unsecured debt, 0% in structured products and other, 0% in preferred equity, and 6% in common equity/interests and warrants measured at fair value.
Since the initial public offering of Apollo Investment in April 2004 and through March 31, 2021, invested capital totaled $21.9 billion in 552 portfolio companies. Over the same period, Apollo Investment completed transactions with more than 100 different financial sponsors.
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As of March 31, 2021, 0% or $0.0 billion is fixed rate debt and 100% or $1.9 billion is floating rate debt, measured at fair value. On a cost basis, 0% or $0.0 billion is fixed rate debt and 100% or $1.9 billion is floating rate debt. As of March 31, 2020, 0% or $0.0 billion was fixed rate debt and 100% or $2.2 billion was floating rate debt, measured at fair value. On a cost basis, 0% or $0.0 billion was fixed rate debt and 100% or $2.3 billion was floating rate debt. The interest rate type information is calculated using the Company’s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status.
Apollo Investment Management, L.P.
Apollo Investment Management, L.P. (the “Investment Adviser” or “AIM”) is our investment adviser and an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (“AGM”). The Investment Adviser, subject to the overall supervision of our Board of Directors, manages the day-to-day operations of, and provides investment advisory services to the Company. AGM and other affiliates manage other funds that may have investment mandates that are similar, in whole or in part, with ours. AIM and its affiliates may determine that an investment is appropriate both for us and for one or more of those other funds. In such event, depending on the availability of such investment and other appropriate factors, AIM may determine that we should invest on a side-by-side basis with one or more other funds. We make all such investments subject to compliance with applicable regulations and interpretations, and our allocation procedures. Certain types of negotiated co-investments may be made only in accordance with the terms of the exemptive order we received from the Securities and Exchange Commission (“SEC”) permitting us to do so.
AIM is led by John Hannan, Howard Widra, Tanner Powell and Patrick Ryan. Potential investment and disposition opportunities are generally approved by one or more committees composed of personnel across AGM, including Messrs. Widra, Powell and Ryan, by all or a majority of Messrs. Widra, Powell or Ryan depending on the underlying investment type and/or the amount of such investment. The composition of such committees and the overall approval process for the Company’s investments may change from time to time. AIM draws upon AGM’s 30 year history and benefits from the broader firm’s significant capital markets, trading and research expertise developed through investments in many core sectors in over 200 companies since inception.
Apollo Investment Administration, LLC
Apollo Investment Administration, LLC (the “Administrator” or “AIA”), an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. In addition to furnishing us with office facilities, equipment, and clerical, bookkeeping and recordkeeping services, AIA also oversees our financial records as well as prepares our reports to stockholders and reports filed with the SEC. AIA also performs the calculation and publication of our net asset value, the payment of our expenses and oversees the performance of various third-party service providers and the preparation and filing of our tax returns. Furthermore, AIA provides on our behalf managerial assistance to those portfolio companies to which we are required to provide such assistance.
Operating and Regulatory Structure
Our investment activities are managed by AIM and supervised by our Board of Directors, a majority of whom are independent of AGM and its affiliates. AIM is an investment adviser that is registered under the Investment Advisers Act of 1940. Under our investment advisory management agreement, we pay AIM an annual base management fee based on our average gross assets as well as an incentive fee.
As a BDC, we are required to comply with certain regulatory requirements. Also, while we are permitted to finance investments using debt, our ability to use debt is limited in certain significant respects (see “Item 1A. Risk Factors”). We have elected to be treated for federal income tax purposes as a RIC under Subchapter M of the Code.
Investments
Apollo Investment seeks to create a portfolio that includes primarily debt investments including secured loans and unsecured loans and, to a lesser extent, equity investments by investing, on an individual portfolio company basis, approximately $15 million to $250 million of capital, on average, in the securities of middle-market companies, as well as structured products such as CLOs and CLNs. The average investment size will vary as the size of our capital base varies. Our target portfolio consists primarily of long-term secured debt, as well as unsecured and mezzanine positions of private middle-market companies. Structurally, unsecured and mezzanine debt usually ranks subordinate in priority of payment to senior debt, such as bank debt, and is characterized as unsecured. As such, other creditors may rank senior to us in the event of an insolvency.
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However, unsecured and mezzanine debt ranks senior to common and preferred equity in a borrowers’ capital structure. Unsecured and mezzanine debt may have a fixed or floating interest rate. Additional income can be generated from upfront fees, call protections including call premiums, equity co-investments or warrants. We may also invest in debt and equity positions of structured products, such as CLOs and CLNs.
Our principal focus is to provide capital to middle-market companies in a variety of industries. We generally seek to target companies that generate positive free cash flows or that may support debt investments with strong asset coverage, and we may provide debtor-in-possession or reserve financing. Additionally, we may acquire investments in the secondary market if we believe the risk-adjusted returns are attractive.
The following is a representative list of the industries in which we have invested as of March 31, 2021:
Advertising, Printing & Publishing
Aerospace & Defense
Automotive
Aviation and Consumer Transport
Beverage, Food & Tobacco
Business Services
Chemicals, Plastics & Rubber
Construction & Building
Consumer Goods – Durable
Consumer Goods – Non-durable
Consumer Services
Diversified Investment Vehicles, Banking, Finance, Real Estate
Education
Energy – Electricity
Energy – Oil & Gas
Environmental Industries
Healthcare & Pharmaceuticals
High Tech Industries
Insurance
Manufacturing, Capital Equipment
Media – Diversified & Production
Retail
Telecommunications
Transportation – Cargo, Distribution
Wholesale


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We may also invest in other industries if we are presented with attractive opportunities. In an effort to increase our returns and the number of investments that we can make, we may in the future seek to securitize our debt investments. To the extent we elect to include higher quality portfolio holdings in the securitization vehicle and retain lower quality holdings in our portfolio, investing in our shares may be riskier. To securitize debt investments, we may create a wholly owned subsidiary and contribute a pool of loans to the subsidiary. We may sell debt of or interests in the subsidiary on a non-recourse basis to purchasers whom we would expect to be willing to accept a lower interest rate to invest in investment-grade securities. We may use the proceeds of such sales to reduce indebtedness or to fund additional investments. We may also invest through special purpose entities or other arrangements, including total return swaps and repurchase agreements, in order to obtain non-recourse financing or for other purposes.
We may invest, to the extent permitted by law, in the securities and instruments of other investment companies and in private funds. We may also co-invest on a concurrent basis with affiliates of ours, subject to compliance with applicable regulations and our allocation procedures. Certain types of negotiated co-investments may be made only in accordance with the terms of the exemptive order we received from the SEC permitting us to do so. On March 29, 2016, we received an exemptive order from the SEC (the “Order”) permitting us greater flexibility to negotiate the terms of co-investment transactions with certain of our affiliates, including investment funds managed by AIM or its affiliates, subject to the conditions included therein. Under the terms of the Order, a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors must be able to reach certain conclusions in connection with a co-investment transaction, including that (1) the terms of the proposed transaction are reasonable and fair to us and our stockholders and do not involve overreaching of us or our stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of our stockholders and is consistent with our Board of Directors approved criteria. In certain situations where co-investment with one or more funds managed by AIM or its affiliates is not covered by the Order, the personnel of AIM or its affiliates will need to decide which fund will proceed with the investment. Such personnel will make these determinations based on allocation policies and procedures, which are designed to reasonably ensure that investment opportunities are allocated fairly and equitably among affiliated funds over time and in a manner that is consistent with applicable laws, rules and regulations. The Order is subject to certain terms and conditions so there can be no assurance that we will be permitted to co-invest with certain of our affiliates other than in the circumstances currently permitted by regulatory guidance and the Order.
The following table summarizes our top ten portfolio companies and industries based on fair value as of March 31, 2021:
Portfolio Company% of 
Portfolio
Industry% of 
Portfolio
Merx Aviation Finance, LLC12.9%Healthcare & Pharmaceuticals16.1%
ChyronHego Corporation3.7%High Tech Industries13.9%
MSEA Tankers LLC2.3%Aviation and Consumer Transport13.6%
Dynamic Product Tankers (Prime), LLC1.9%Business Services13.2%
NFA Group1.7%Transportation – Cargo, Distribution5.6%
Simplifi Holdings, Inc.1.6%Consumer Services4.8%
RA Outdoors, LLC (Active Outdoors)1.5%Beverage, Food & Tobacco4.0%
Spotted Hawk1.4%Consumer Goods – Non-durable3.6%
MAKS1.4%Diversified Investment Vehicles, Banking, Finance, Real Estate2.5%
Electro Rent Corporation1.4%Advertising, Printing & Publishing2.4%
Total29.8%Total79.7%
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The following table summarizes our top ten portfolio companies and industries based on fair value as of March 31, 2020:
Portfolio Company% of 
Portfolio
Industry% of 
Portfolio
Merx Aviation Finance, LLC12.0%Healthcare & Pharmaceuticals16.7%
Dynamic Product Tankers (Prime), LLC2.8%Business Services12.9%
ChyronHego Corporation2.5%Aviation and Consumer Transport12.5%
MSEA Tankers LLC2.1%High Tech Industries12.3%
Spotted Hawk1.7%Transportation – Cargo, Distribution6.1%
Genesis Healthcare, Inc.1.6%Consumer Services4.4%
Simplifi Holdings, Inc.1.4%Beverage, Food & Tobacco3.5%
Telestream Holdings Corporation1.3%Consumer Goods – Non-durable3.2%
RA Outdoors, LLC (Active Outdoors)1.3%Consumer Goods – Durable2.7%
NFA Group1.2%Diversified Investment Vehicles, Banking, Finance, Real Estate2.6%
Total27.9%Total76.9%
Investment Selection and Due Diligence
We are committed to a value oriented philosophy of, among other things, capital preservation and commit resources to managing risks associated with our investment portfolio. Our Investment Adviser conducts due diligence on prospective portfolio companies. In conducting its due diligence, our Investment Adviser uses information provided by the company and its management team, publicly available information, as well as information from their extensive relationships with former and current management teams, consultants, competitors and investment bankers and the direct experience of the senior partners of our affiliates.
Our Investment Adviser’s due diligence will typically include:
review of historical and prospective financial information;
on-site visits;
interviews with management, employees, customers and vendors of the potential portfolio company;
review of loan documents;
background checks; and
research relating to the company’s management, industry, markets, products and services, and competitors.
Upon the completion of due diligence and a decision to seek approval for an investment in a company, the professionals leading the proposed investment generally present the investment opportunity to and seek approval in accordance with our investment approval process. Additional due diligence with respect to any investment may be conducted on our behalf by attorneys and accountants prior to the closing of the investment, as well as other outside advisers, as appropriate.
Investment Structure
Once we have determined that a prospective portfolio company is suitable for investment, we work with the management of that company and its other capital providers, including senior, junior and equity capital providers, to structure an investment.

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We generally seek to structure our investments as secured loans with a direct lien on the assets or cash flows of the company that provide for increased downside protection in the event of insolvency while maintaining attractive risk-adjusted returns and current interest income. We generally seek for these secured loans to obtain security interests in the assets of our portfolio companies that serve as collateral in support of the repayment of these loans. This collateral may take the form of first or second priority liens on the assets of a portfolio company. In some cases, we may enter into debt investments that, by their terms, convert into equity or additional debt securities or defer payments of interest after our investment. Also, in some cases our debt investments may be collateralized by a subordinated lien on some or all of the assets of the borrower. Typically, our loans have maturities of three to ten years.
We seek to tailor the terms of our investments to the facts and circumstances of the transaction and the prospective portfolio company, negotiating a structure that protects our rights and manages our risk while creating incentives for the portfolio company to achieve its business plan and improve its profitability.
For example, in addition to seeking a senior position in the capital structure of our portfolio companies, we seek to limit the downside potential of our investments by:
requiring an expected total return on our investments (including both interest and potential equity appreciation) that compensates us for credit risk;
generally incorporating call protection into the investment structure where possible; and
negotiating covenants and information rights in connection with our investments that afford our portfolio companies flexibility in managing their businesses, but which are still consistent with our goal of preserving our capital. Such restrictions may include affirmative and negative covenants, default penalties, lien protection, change of control provisions and board rights, including either observation or participation rights. Our investments may include equity features, such as warrants or options to buy a minority interest in the portfolio company. Any warrants we receive with our debt securities generally require only a nominal cost to exercise, and thus, as a portfolio company appreciates in value, we may achieve additional investment return from this equity interest. We may structure the warrants to provide provisions protecting our rights as a minority-interest holder, as well as puts, or rights to sell such securities back to the company, upon the occurrence of specified events. In many cases, we may also seek to obtain registration rights in connection with these equity interests, which may include demand and “piggyback” registration rights.
We expect to hold most of our investments to maturity or repayment, but we may sell certain of our investments sooner if a liquidity event takes place such as a sale or recapitalization or worsening of credit quality of a portfolio company, among other reasons.
Investment Valuation Process
The following is a description of the steps we take each quarter to determine the value of our portfolio. Our portfolio of investments is recorded at fair value as determined in good faith by or under the direction of our Board of Directors pursuant to a written valuation policy and a consistently applied valuation process utilizing the input of our Investment Adviser, independent valuation firms, third party pricing services and the Audit Committee of the Board of Directors. Since this process necessarily involves the use of judgment and the engagement of independent valuation firms, there is no certainty as to the value of our portfolio investments. Investments for which market quotations are readily available are recorded in our financial statements at such market quotations if they are deemed to represent fair value. Market quotations may be deemed not to represent fair value where AIM believes that facts and circumstances applicable to an issuer, a seller or purchaser or the market for a particular security causes current market quotes not to reflect the fair value of the security, among other reasons. Examples of these events could include cases in which material events are announced after the close of the market on which a security is primarily traded, when a security trades infrequently causing a quoted purchase or sale price to become stale or in the event of a “fire sale” by a distressed seller.

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With respect to investments for which market quotations are not readily available or when such market quotations are deemed not to represent fair value, our Board of Directors has approved a multi-step valuation process each quarter, as described below:
1.Our quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of our Investment Adviser who are responsible for the portfolio investment.
2.Preliminary valuation conclusions are then documented and discussed with senior management of our Investment Adviser.
3.Independent valuation firms are engaged by our Board of Directors to conduct independent appraisals by reviewing our Investment Adviser’s preliminary valuations and then making their own independent assessment.
4.The Audit Committee of the Board of Directors reviews the preliminary valuation of our Investment Adviser and the valuation prepared by the independent valuation firms and responds, if warranted, to the valuation recommendation of the independent valuation firms.
5.The Board of Directors discusses valuations and determines in good faith the fair value of each investment in our portfolio based on the input of our Investment Adviser, the applicable independent valuation firm, and the Audit Committee of the Board of Directors.
6.For Level 3 investments entered into within the current quarter, the cost (purchase price adjusted for accreted original issue discount/amortized premium) or any recent comparable trade activity on the security investment shall be considered to reasonably approximate the fair value of the investment, provided that no material change has since occurred in the issuer’s business, significant inputs or the relevant environment.
Investments determined by these valuation procedures which have a fair value of less than $1 million during the prior fiscal quarter may be valued based on inputs identified by the Investment Adviser without the necessity of obtaining valuation from an independent valuation firm, if once annually an independent valuation firm using the procedures described herein provides valuation. In addition, some of our investments provide for payment-in-kind (“PIK”) interest or dividends. Such amounts of accrued PIK interest or dividends are added to the cost of the investment on the respective capitalization dates and generally become due at maturity of the investment or upon the investment being called by the issuer. Upon capitalization, PIK is subject to the fair value estimates associated with their related investments.
Ongoing Relationships with Portfolio Companies
Monitoring
AIM monitors our portfolio companies on an ongoing basis and also monitors the financial trends of each portfolio company to determine if each is meeting its respective business plans and to assess the appropriate course of action for each company. In addition, senior investment professionals of AIM may take board seats or obtain board observation rights for our portfolio companies.
AIM has several methods of evaluating and monitoring the performance and fair value of our investments, which can include, but are not limited to, the assessment of success of the portfolio company in adhering to its business plan and compliance with covenants; periodic and regular contact with portfolio company management and, if appropriate, the financial or strategic sponsor, to discuss financial position, requirements and accomplishments; comparisons to other portfolio companies in the industry; attendance at and participation in board meetings; and review of monthly and quarterly financial statements and financial projections for portfolio companies.
AIM also uses an investment rating system to characterize and monitor our expected level of returns on each investment in our portfolio. These ratings are just one of several factors that AIM uses to monitor our portfolio, but they are not in and of themselves a determinative of fair value. AIM grades the credit risk of all investments on a scale of 1 to 5 no less frequently than quarterly. This system is intended primarily to reflect the underlying risk of a portfolio investment relative to our initial cost basis in respect of such portfolio investment (i.e., at the time of acquisition), although it may also take into account under certain circumstances the performance of the portfolio company’s business, the collateral coverage of the investment and other relevant factors.

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Under this system, investments with a grade of 1 involve the least amount of risk to our initial cost basis. The trends and risk factors for this investment since origination or acquisition are generally favorable, which may include the performance of the portfolio company or a potential exit. Investments graded 2 involve a level of risk to our initial cost basis that is similar to the level of risk underwritten at the time of origination or acquisition. This portfolio company is generally performing in accordance with our analysis of its business and the full return of principal and interest or dividend is expected. Investments graded 3 indicate that the risk to our ability to recoup the cost of such investment has increased since origination or acquisition, but full return of principal and interest or dividend is expected. A portfolio company with an investment grade of 3 requires closer monitoring. Investments graded 4 indicate that the risk to our ability to recoup the cost of such investment has increased significantly since origination or acquisition, including as a result of factors such as declining performance and noncompliance with debt covenants, and we expect some loss of interest, dividend or capital appreciation, but still expect an overall positive internal rate of return on the investment. Investments graded 5 indicate that the risk to our ability to recoup the cost of such investment has increased materially since origination or acquisition and the portfolio company likely has materially declining performance. Loss of interest or dividend and some loss of principal investment is expected, which would result in an overall negative internal rate of return on the investment. For investments graded 4 or 5, AIM enhances its level of scrutiny over the monitoring of such portfolio company.
AIM monitors and, when appropriate, changes the investment ratings assigned to each investment in our portfolio. In connection with our valuation process, AIM reviews these investment ratings on a quarterly basis, and the Audit Committee of the Board of Directors monitors such ratings. It is possible that the grade of certain of these portfolio investments may be reduced or increased over time.
Managerial Assistance
As a BDC, we must offer, and must provide upon request, significant managerial assistance to certain of our portfolio companies. This assistance could involve, among other things, monitoring the operations of our portfolio companies, participating in board and management meetings, consulting with and advising officers of portfolio companies and providing other organizational and financial guidance. We may receive fees for these services.
Competition
Our primary competitors in providing financing to middle-market companies include public and private funds, commercial and investment banks, commercial financing companies, other BDCs or hedge funds, and, to the extent they provide an alternative form of financing, private equity funds. Some of our existing and potential competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. For example, some competitors may have a lower cost of funds and access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions that the 1940 Act imposes on us as a BDC or the restrictions that the Code imposes on us as a RIC.
We also expect to use the industry information of AGM’s investment professionals to which we have access to assess investment risks and determine appropriate pricing for our investments in portfolio companies. In addition, we believe that the relationships of the senior managers of AIM and those of our affiliates enable us to learn about, and compete effectively for, financing opportunities with attractive middle-market companies in the industries in which we seek to invest.
Staffing
The Company has no employees. All of the services we utilize are provided by third parties. Our Chief Financial Officer, Chief Legal Officer and Chief Compliance Officer and additional personnel assisting them in such functions are employees of AIA and perform their respective functions under the terms of the administration agreement with AIA. Certain of our other executive officers are managing partners of our Investment Adviser. Our day-to-day investment operations are managed by our Investment Adviser, which draws on the broader capabilities of the Opportunistic Credit segment of AGM’s credit business. In addition, we generally reimburse AIA for our allocable portion of expenses incurred by it in performing its obligations under the administration agreement, including rent and our allocable portion of the cost of our Chief Financial Officer, Chief Legal Officer and Chief Compliance Officer and their respective staffs.

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Investment Advisory Management Agreement
Management Services
AIM serves as our investment adviser and is a wholly-owned direct subsidiary of Apollo Global Management. AIM is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Subject to the overall supervision of our Board of Directors, the Investment Adviser manages the day-to-day operations of, and provides investment advisory and management services to, Apollo Investment. Under the terms of the investment advisory management agreement, AIM:
determines the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes;
identifies, evaluates and negotiates the structure of the investments we make (including performing due diligence on our prospective portfolio companies); and
closes and monitors the investments we make.
AIM’s services under the investment advisory management agreement are not exclusive, and it is free to furnish similar services to other entities so long as its services to us are not impaired.
Management and Incentive Fee
Pursuant to the investment advisory management agreement, we incur a fee payable to AIM for investment advisory and management services consisting of two components - a base management fee and an incentive fee. For the fiscal years ended March 31, 2021, 2020 and 2019, we accrued $36.44 million, $40.36 million and $35.73 million, respectively, in base management fees and incurred $0.00 million, $1.98 million and $21.19 million, respectively, in performance-based incentive fees.

Base Management Fee
Effective April 1, 2018, the base management fee is calculated initially at an annual rate of 1.50% (0.375% per quarter) of the lesser of (i) the average of the value of the Company’s gross assets (excluding cash or cash equivalents but including other assets purchased with borrowed amounts) at the end of each of the two most recently completed calendar quarters and (ii) the average monthly value (measured as of the last day of each month) of the Company’s gross assets (excluding cash or cash equivalents but including other assets purchased with borrowed amounts) during the most recently completed calendar quarter; provided, however, in each case, the base management fee is calculated at an annual rate of 1.00% (0.250% per quarter) of the average of the value of the Company’s gross assets (excluding cash or cash equivalents but including other assets purchased with borrowed amounts) that exceeds the product of (A) 200% and (B) the value of the Company’s net asset value at the end of the prior calendar quarter. The base management fee will be payable quarterly in arrears. The value of the Company’s gross assets shall be calculated in accordance with the Company's valuation policies.

Performance-based Incentive Fee
The incentive fee (the “Incentive Fee”) consists of two components that are determined independent of each other, with the result that one component may be payable even if the other is not. A portion of the Incentive Fee is based on income and a portion is based on capital gains, each as described below:


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A. Incentive Fee based on Income
(i)     Incentive Fee on Pre-Incentive Fee Net Investment Income - (April 1, 2017 - December 31, 2018)
The first part of the incentive fee was calculated and payable quarterly in arrears based on our pre-incentive fee net investment income for the immediately preceding calendar quarter at an annual rate of 20%. For this purpose, pre-incentive fee net investment income means interest income, dividend income and any other income (including, without limitation, any accrued income that the Company has not yet received in cash and any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses accrued during the calendar quarter (including, without limitation, the Base Management Fee, administration expenses and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the Incentive Fee on Income and the Incentive Fee on Capital Gains). Pre-incentive fee net investment income did not include any realized or unrealized gains or losses. Pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter, is compared to the rate of 1.75% per quarter (7% annualized) (the “performance threshold”). For the period from April 1, 2017 through December 31, 2018, if the resulting incentive fee rate was less than 20% due to the incentive fee waiver discussed below, the percentage at which the Investment Adviser’s 100% catch-up is complete would also be reduced ratably from 2.1875% (8.75% annualized) to as low as 2.06% (8.24% annualized) (“catch-up threshold”).
The Company pays the Investment Adviser an incentive fee with respect to our pre-incentive fee net investment income in each calendar quarter as follows: (1) no incentive fee in any calendar quarter in which our pre-incentive fee net investment income does not exceed the performance threshold; and (2) 100% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds 1.75% but does not exceed the catch-up threshold in any calendar quarter; and (3) for the period from April 1, 2017 through December 31, 2018, 15% to 20% of the amount of our pre-incentive fee net investment income, if any, that exceeds the catch-up threshold in any calendar quarter. These calculations are appropriately prorated for any period of less than three months. The effect of the fee calculation described above is that if pre-incentive fee net investment income is equal to or exceeds the catch-up threshold, the Investment Adviser will receive a fee of 15% to 20% of our pre-incentive fee net investment income for the quarter.
Incentive Fee Waiver
For the period from April 1, 2018 through December 31, 2018, the Investment Adviser agreed to waive 25% of its performance based incentive fee so that the incentive fee on pre-incentive fee net investment income was accrued at 15%.
(ii)     Incentive Fee on Pre-Incentive Fee Net Income - effective from January 1, 2019
As of January 1, 2019, the incentive fee on pre-incentive fee net investment income is determined and paid quarterly in arrears by calculating the amount by which (x) the aggregate amount of the pre-incentive fee net investment income in respect of the current calendar quarter and each of the eleven preceding calendar quarters beginning with the calendar quarter that commences on or after April 1, 2018 (the “trailing twelve quarters”) exceeds (y) the preferred return amount in respect of the trailing twelve quarters.
The preferred return amount will be determined on a quarterly basis, and will be calculated by summing the amounts obtained by multiplying 1.75% by the Company’s net asset value at the beginning of each applicable calendar quarter comprising the relevant trailing twelve quarters. The preferred return amount will be calculated after making appropriate adjustments to the Company’s net asset value at the beginning of each applicable calendar quarter for Company capital issuances and distributions during the applicable calendar quarter.

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The amount of the Incentive Fee on Income that will be paid to the Investment Adviser for a particular quarter will equal the excess of the incentive fee on pre-incentive fee net investment income, so calculated less the aggregate incentive fee on pre-incentive fee net investment income that were paid to the Investment Adviser (excluding waivers, if any) in the preceding eleven calendar quarters comprising the relevant trailing twelve quarters.
The Company will pay the Investment Adviser an incentive fee with respect to our pre-incentive fee net investment income in each calendar quarter as follows:
(1) no incentive fee in any calendar quarter in which our pre-incentive fee net investment income for the trailing twelve quarters does not exceed the preferred return amount.
(2) 100% of our pre-incentive fee net investment income for the trailing twelve quarters, if any, that exceeds the preferred return amount but is less than or equal to an amount (the “catch-up amount”) determined by multiplying 2.1875% by the Company’s net asset value at the beginning of each applicable calendar quarter comprising the relevant trailing twelve quarters.
(3) for any quarter in which the Company’s pre-incentive fee net investment income for the trailing twelve quarters exceeds the catch-up amount, the incentive fee shall equal 20% of the amount of the Company’s pre-incentive fee net investment income for such trailing twelve quarters.
The Incentive Fee on Income as calculated is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in any quarter is an amount equal to (a) 20% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant trailing twelve quarters less (b) the aggregate Incentive Fees on Income that were paid to the Investment Adviser (excluding waivers, if any) in the preceding eleven calendar quarters (or portion thereof) comprising the relevant trailing twelve quarters.
For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant trailing twelve quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the trailing twelve quarters less (y) any Net Capital Loss, since April 1, 2018, in respect of the trailing twelve quarters. If, in any quarter, the Incentive Fee Cap is zero or a negative value, the Company shall pay no Incentive Fee on Income to the Investment Adviser in that quarter. If, in any quarter, the Incentive Fee Cap is a positive value but is less than the Incentive Fee on Income calculated in accordance with the calculation described above of the 1940 Act, the Company shall pay the Investment Adviser the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap is equal to or greater than the Incentive Fee on Income calculated in accordance with the calculation described above, the Company shall pay the Investment Adviser the Incentive Fee on Income for such quarter.
“Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in such period and (ii) aggregate capital gains, whether realized or unrealized, in such period.
The following is a graphical representation of the calculation of the Incentive Fee based on income:
Incentive Fee based on Income
Percentage of Ordinary Income comprising the Incentive Fee based on Income
(expressed as an annualized rate of return on the value of net assets as of the beginning
of each of the quarters included in the Trailing Twelve Quarters)

incentivefeeassumptiongrapa.jpg


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B. Incentive Fee on Cumulative Net Realized Gains
The Incentive Fee on Capital Gains is determined and payable in arrears as of the end of each calendar year (or upon termination of the investment advisory management agreement). This fee shall equal 20.0% of the sum of the Company’s realized capital gains on a cumulative basis, calculated as of the end of each calendar year (or upon termination of the investment advisory management agreement), computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any Incentive Fees on Capital Gains previously paid to the Investment Adviser. The aggregate unrealized capital depreciation of the Company shall be calculated as the sum of the differences, if negative, between (a) the valuation of each investment in the Company’s portfolio as of the applicable calculation date and (b) the accreted or amortized cost basis of such investment.
For accounting purposes only, we are required under GAAP to accrue a theoretical capital gains incentive fee based upon net realized capital gains and unrealized capital gain and loss on investments held at the end of each period. The accrual of this theoretical capital gains incentive fee assumes all unrealized capital gain and loss is realized in order to reflect a theoretical capital gains incentive fee that would be payable to the Investment Adviser at each measurement date. There was no accrual for theoretical capital gains incentive fee for the years ended March 31 2021, 2020 and 2019. It should be noted that a fee so calculated and accrued would not be payable under the Advisers Act or the investment advisory management agreement, and would not be paid based upon such computation of capital gains incentive fees in subsequent periods. Amounts actually paid to the Investment Adviser will be consistent with the Advisers Act and formula reflected in the investment advisory management agreement which specifically excludes consideration of unrealized capital gain.
On January 16, 2019, we entered into a fee offset agreement with AIM in connection with revenue realized by AIM and its affiliates for the management of certain aircraft assets.  We will receive an offsetting credit against total incentive fees otherwise due to AIM under the the investment advisory management agreement.  The amount offset will initially be 20% of the management fee revenue earned and incentive fee revenue realized by AIM and its affiliates in connection with managing aircraft assets on related insurance balance sheets (“New Balance Sheet Investments”), new aircraft managed account capital (“New Managed Accounts”) and new dedicated aircraft funds (“New Aircraft Funds”). Once the aggregate capital raised by New Aircraft Funds or New Managed Accounts and capital invested by the New Balance Sheet Investments exceeds $3 billion cumulatively, the fee offset will step down to 10% of the amount of incremental management fee revenue earned and incentive fee revenue realized by AIM and its affiliates. The fee offset will be in place for seven years, however the incentive fees realized by AIM and its affiliates after this seven-year period from applicable investments that were raised or made within the seven-year period will also be used to offset incentive fees payable to AIM by us. The offset will be limited to the amount of incentive fee payable by the us to AIM and any unapplied fee offset which exceeds the incentive fees payable in a given quarter will carry forward to be credited against the incentive fees payable by us in subsequent quarters.
Payment of Our Expenses
All investment professionals of the Investment Adviser and their respective staffs when and to the extent engaged in providing investment advisory and management services, and the compensation and routine overhead expenses of such personnel allocable to such services, are provided and paid for by AIM. We bear all other costs and expenses of our operations and transactions, including those relating to: calculation of our net asset value (including the cost and expenses of any independent valuation firm); expenses incurred by AIM payable to third parties, including agents, consultants or other advisers, in monitoring our financial and legal affairs and in monitoring our investments and performing due diligence on our prospective portfolio companies; interest payable on debt, if any, incurred to finance our investments; offerings of our common stock and other securities; investment advisory and management fees; fees payable to third parties, including agents, consultants or other advisers, relating to, or associated with, evaluating and making investments; transfer agent and custodial fees; registration fees; listing fees; taxes; independent directors’ fees and expenses; costs of preparing and filing reports or other documents of the SEC; the costs of any reports, proxy statements or other notices to stockholders, including printing costs; our allocable portion of the fidelity bond, directors’ and officers’ errors and omissions liability insurance, and any other insurance premiums; direct costs and expenses of administration, including auditor and legal costs; and all other expenses incurred by us or Apollo Administration in connection with administering our business, such as our allocable portion of overhead under the administration agreement, including rent and our allocable portion of the cost of our Chief Financial Officer, Chief Legal Officer and Chief Compliance Officer and their respective staffs.

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Duration and Termination
The continuation of our investment advisory management agreement was approved by our Board of Directors on May 20, 2021. Unless terminated earlier as described below, it will remain in effect from year to year if approved annually by our Board of Directors or by the affirmative vote of the holders of a majority of our outstanding voting securities, including, in either case, approval by a majority of our directors who are not “interested persons” as defined in the 1940 Act. The investment advisory management agreement will automatically terminate in the event of its assignment. Either party may terminate the investment advisory management agreement without penalty upon not more than 60 days’ written notice to the other party. See “Risk Factors - Risks Relating to our Business and Structure.”
Indemnification
The investment advisory management agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of its duties or reckless disregard of its duties and obligations, AIM and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with it are entitled to indemnification from Apollo Investment for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of AIM’s services under the investment advisory management agreement or otherwise as an investment adviser of Apollo Investment.
Administrative Agreement
Pursuant to a separate administration agreement, AIA furnishes us with office facilities, equipment and clerical, bookkeeping and record keeping services at such facilities. Under the administration agreement, AIA also performs, or oversees the performance of, our required administrative services, which include, among other things, being responsible for the financial records that we are required to maintain and preparing reports to our stockholders and reports filed with the SEC. In addition, AIA assists us in determining and publishing our net asset value, oversees the preparation and filing of our tax returns and the printing and dissemination of reports to our stockholders, and generally oversees the payment of our expenses and the performance of administrative and professional services rendered to us by others. Payments under the administration agreement are equal to an amount based upon our allocable portion of AIA’s overhead in performing its obligations under the administration agreement, including rent and our allocable portion of the cost of our Chief Financial Officer, Chief Legal Officer and Chief Compliance Officer and their respective staffs. Under the administration agreement, AIA also provides on our behalf managerial assistance to those portfolio companies to which we are required to provide such assistance. Either party may terminate the administration agreement without penalty upon 60 days’ written notice to the other party.

At the fiscal years ended March 31, 2021, 2020 and 2019, expenses incurred (net of reimbursements) under the administration agreement were $4.5 million, $6.0 million and $6.7 million, respectively. For administrative expenses accrued during the most recently completed fiscal quarter, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations; Expenses.”
Indemnification

The administration agreement provides that, absent willful misfeasance, bad faith or gross negligence in the performance of its duties or reckless disregard of its duties and obligations, AIA and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with it are entitled to indemnification from us for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of AIA’s services under the administration agreement or otherwise as administrator for us.
License Agreement
We have entered into a license agreement with AGM pursuant to which AGM has agreed to grant us a non-exclusive, royalty-free license to use the name “Apollo.” Under this agreement, we have the right to use the “Apollo” name, for so long as AIM or one of its affiliates remains our Investment Adviser. Other than with respect to this limited license, we will have no legal right to the “Apollo” name. This license agreement will remain in effect for so long as the investment advisory management agreement with our Investment Adviser is in effect.


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Sarbanes-Oxley Act of 2002
The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) imposes a wide variety of regulatory requirements on publicly-held companies and their insiders. Many of these requirements affect us. For example:
Pursuant to Rule 13a-14 under the Securities Exchange Act of 1934 (the “1934 Act”), our Chief Executive Officer and Chief Financial Officer must certify the accuracy of the financial statements contained in our periodic reports.
Pursuant to Item 307 of Regulation S-K, our periodic reports must disclose our conclusions about the effectiveness of our disclosure controls and procedures.
Pursuant to Rule 13a-15 of the 1934 Act, our management must prepare a report regarding its assessment of our internal control over financial reporting.
Pursuant to Item 308 of Regulation S-K and Rule 13a-15 of the 1934 Act, our periodic reports must disclose whether there were significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to material weaknesses.
The Sarbanes-Oxley Act requires us to review our current policies and procedures to determine whether we comply with the Sarbanes-Oxley Act and the regulations promulgated thereunder. We will continue to monitor our compliance with all regulations that are adopted under the Sarbanes-Oxley Act and will take actions necessary to ensure that we are in compliance therewith.
Available Information
We file with or submit to the SEC annual, quarterly and current periodic reports, proxy statements, codes of ethics and other information meeting the informational requirements of the 1934 Act. You may inspect and copy any materials we file with or submit to the SEC at the SEC’s Public Reference Room at 100 F Street NE, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information filed electronically by us with the SEC which are available on the SEC’s Internet site at http://www.sec.gov. In addition, information specifically regarding how we voted proxies relating to portfolio securities for the year ended March 31, 2021 is available without charge, upon request, by calling 212-515-3450. Copies of these reports, proxy and information statements and other information may be obtained, after paying a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov, or by writing the SEC’s Public Reference Section, Washington, D.C. 20549-0102.
Our Internet address is www.apolloic.com. We make available free of charge on our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Information contained on our website is not incorporated by reference into this annual report on Form 10-K, and you should not consider information contained on our website to be part of this annual report on Form 10-K.
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Risk Factor Summary
The following is only a summary of the principal risks that may materially adversely affect our business, financial condition, results of operations and cash flows. The following should be read in conjunction with the more complete discussion of the risk factors we face, which are set forth in the section titled “Item 1A. Risk Factors” in this report.
Risk Relating to the Current Environment
Major public health issues, and specifically the novel coronavirus (COVID-19), could have an adverse impact on our financial condition and results of operations and other aspects of our business.
Changes in interest rates may adversely affect the value of our portfolio investments which could have an adverse effect on our business, financial condition and results of operations.
Capital markets may experience periods of disruption and instability. Such market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad, which may have a negative impact on our business and operations.
The interest rates of some of our floating-rate loans to our portfolio companies may be priced using a spread over LIBOR, which may be phased out in the future.
Changes in existing laws or regulations, the interpretations thereof or newly enacted laws or regulations may negatively impact our business.
The continued uncertainty relating to the U.S. and global economy could have a negative impact on our business.
Changes to U.S. federal income tax laws could materially and adversely affect us and our stockholders.
Risks Relating to our Business and Structure
We may suffer credit losses.
We are dependent upon Apollo Investment Management’s key personnel for our future success and upon their access to AGM’s investment professionals and partners.
We operate in a highly competitive market for investment opportunities.
We will be subject to corporate-level income tax if we are unable to maintain our status as a RIC.
We may have difficulty paying our required distributions if we recognize income before or without receiving cash representing such income.
Regulations governing our operation as a BDC affect our ability to raise, and the way in which we raise, additional capital.
Our business requires a substantial amount of capital to grow because we must distribute most of our income.
Many of our portfolio investments are recorded at fair value as determined in good faith by or under the direction of our Board of Directors and, as a result, there is uncertainty as to the value of our portfolio investments.
The lack of liquidity in our investments may adversely affect our business.
Our ability to enter into transactions with our affiliates is restricted.
There are significant potential conflicts of interest which could adversely affect our investment returns.
Changes in the laws or regulations governing our business or the businesses of our portfolio companies and any failure by us or our portfolio companies to comply with these laws or regulations, could negatively affect the profitability of our operations or of our portfolio companies.
We may choose to pay dividends in our own common stock, in which case you may be required to pay federal income taxes in excess of the cash dividends you receive.
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If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
The failure in cyber security systems, as well as the occurrence of events unanticipated in our disaster recovery systems and management continuity planning could impair our ability to conduct business effectively.
Risks Relating to our Investments
Our investments in portfolio companies are risky, and we could lose all or part of our investment.
Economic recessions or downturns could impair our portfolio companies and harm our operating results.
Our portfolio companies may be highly leveraged and a covenant breach by our portfolio companies may harm our operating results.
There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could be subject to, among other things, lender liability or fraudulent conveyance claims.
If we do not invest a sufficient portion of our assets in qualifying assets, we could fail to qualify as a BDC or be precluded from investing according to our current business strategy.
Our portfolio contains a limited number of portfolio companies, which subjects us to a greater risk of significant loss if any of these companies defaults on its obligations under any of its debt securities.
An investment strategy focused primarily on privately-held companies presents certain challenges, including the lack of available information about these companies, a dependence on the talents and efforts of only a few key portfolio company personnel and a greater vulnerability to economic downturns.
Our portfolio companies may incur debt that ranks equally with, or senior to, our investments in such companies.
Our investments in foreign securities may involve significant risks in addition to the risks inherent in U.S. investments.
Proposed position aggregation requirements may restrict the swap positions that AIM may enter into.
Our ability to enter into transactions involving derivatives and financial commitment transactions may be limited.
Risks Relating to our Debt Instruments
The trading market or market value of our debt securities may fluctuate.
Terms relating to redemption may materially adversely affect your return on any debt securities that we may issue.
Our credit ratings may not reflect all risks of an investment in our debt securities.
Uncertainty related to alternative reference rates due to the phase out of London Interbank Offered Rates (“LIBOR”)
Risks Relating to an Investment in our Common Stock
Investing in our securities involves a high degree of risk and is highly speculative.
There is a risk that investors in our equity securities may not receive distributions or that our distributions may not grow over time and that investors in our debt securities may not receive all of the interest income to which they are entitled.
We may be unable to invest the net proceeds raised from offerings on acceptable terms, which would harm our financial condition and operating results.
Sales of substantial amounts of our securities may have an adverse effect on the market price of our securities.
Stockholders may experience dilution in their ownership percentage.

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Item 1A. Risk Factors
Investing in Apollo Investment involves a number of significant risks relating to the current environment, our business and structure, our investments, issuance of our preferred stock, and an investment in our common stock. As a result, there can be no assurance that we will achieve our investment objective. You should carefully consider the risks described below, together with all of the other information included in this report, before you decide whether to invest in Apollo Investment. The risks set forth below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may have a material adverse effect on our business, financial condition and/or operating results.
Risks Relating to the Current Environment
Major public health issues, and specifically the novel coronavirus (COVID-19), could have an adverse impact on our financial condition and results of operations and other aspects of our business.
The outbreak of the novel coronavirus disease 2019 (“COVID-19”) in many countries continues to adversely impact global commercial activity and has contributed to significant volatility in financial markets. The global impact of the outbreak has been rapidly evolving, and as cases of the virus increased around the world, many governments have reacted by instituting quarantines, restrictions on travel, bans on public events and on public gatherings, closures of a variety of venues (e.g., restaurants, concert halls, museums, theaters, schools and stadiums, non-essential stores, malls and other entertainment facilities), shelter-in-place orders or other restrictions on operations and businesses. On March 11, 2020, the World Health Organization publicly characterized COVID-19 as a pandemic. On March 13, 2020, the President of the U.S. declared the COVID-19 outbreak a national emergency. The U.S. federal government and U.S. state governments are continuing to implement a variety of actions to mobilize efforts to mitigate the ongoing and expected impact and the Center for Disease Control is implementing its pandemic preparedness and response plans, working on multiple fronts, including providing specific guidance on measures to prepare communities to respond to the local spread of COVID-19 throughout the U.S. Such actions have created disruption in global supply chains, and have adversely impacted a number of industries, such as transportation, hospitality and entertainment. The outbreak has triggered a period of global economic slowdown and is expected to continue having an adverse impact on economic and market conditions.
We are closely monitoring developments related to the COVID-19 pandemic to assess its impact on our business; while, due to the evolving and highly uncertain nature of this event, it currently is not possible to estimate its impact precisely, the COVID-19 pandemic has and continues to impact our business, financial condition, results of operations, liquidity or prospects in a number of ways. For instance, our investment portfolio (and, specifically, the valuations of investment assets we hold) has been, and continues to be, adversely affected as a result of market developments from the COVID-19 pandemic and uncertainty regarding its outcome. Moreover, changes in interest rates, reduced liquidity or a continued slowdown in U.S. or global economic conditions may also adversely affect our business, financial condition, results of operations, liquidity or prospects. Further, extreme market volatility may leave us unable to react to market events in a prudent manner consistent with our historical practices in dealing with more orderly markets. Additionally, in recent months, the U.S. Food and Drug Administration authorized various vaccines for emergency use. However, it remains unclear how quickly the vaccines will be distributed nationwide and globally or when “herd immunity” will be achieved and the restrictions that were imposed to slow the spread of the virus will be lifted entirely. The delay in distributing the vaccines could lead people to continue to self-isolate and not participate in the economy at pre-pandemic levels for a prolonged period of time. Even after the COVID-19 pandemic subsides, the U.S. economy and most other major global economies may continue to experience a recession, and our business and operations, as well as the business and operations of our portfolio companies, could be materially adversely affected by a prolonged recession in the United States and other major markets. Although it is impossible to predict with certainty the potential full magnitude of the business and economic ramifications, COVID-19 has impacted, and may further impact, our business in various ways, including but not limited to:
From an operational perspective, our Investment Adviser’s employees, as well as the workforces of our vendors, service providers and counterparties, may also be adversely affected by the COVID-19 pandemic or efforts to mitigate the pandemic, including government-mandated shutdowns, requests or orders for employees to work remotely, and other social distancing measures, in the U.S., which could result in an adverse impact on our ability to conduct our business;
While the market dislocation caused by COVID-19 may present attractive investment opportunities, due to increased volatility in the financial markets, we may not be able to complete those investments;

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If the impact of COVID-19 continues, we may have more limited opportunities to successfully exit existing investments, due to, among other reasons, lower valuations, decreased revenues and earnings, or lack of potential buyers with financial resources to pursue an acquisition, resulting in a reduced ability to realize value from such investments;
Our portfolio companies are facing or may face in the future increased credit and liquidity risk due to volatility in financial markets, reduced revenue streams, and limited or higher cost of access to preferred sources of funding, which may result in potential impairment of our investments. Changes in the debt financing markets are impacting, or, if the volatility in financial market continues, may in the future impact, the ability of our portfolio companies to meet their respective financial obligations;
Borrowers of loans, notes and other credit instruments in our portfolio may be unable to meet their principal or interest payment obligations or satisfy financial covenants, resulting in a decrease in value of our investments and a lower than expected return. In addition, for variable interest instruments, lower reference rates resulting from government stimulus programs in response to COVID-19 could lead to lower interest income;
Many of our portfolio companies operate in industries that are materially impacted by COVID-19, including but not limited to healthcare, travel, aviation, entertainment and hospitality. Many of these companies are facing operational and financial hardships resulting from the spread of COVID-19 and related governmental measures, such as the closure of stores, restrictions on travel, quarantines or stay-at-home orders. If the disruptions caused by COVID-19 continue and the restrictions put in place are not lifted, the businesses of these portfolio companies could suffer materially or become insolvent, which would decrease the value of our investments;
The stimulus package provided by the U.S. government and its various agencies to businesses in the U.S., including some of our portfolio companies, restricts the recipient business from taking certain actions, such as dividends and share buybacks. Such limitations may reduce the value of our investments in such companies;
An extended period of remote working by our Investment Adviser’s employees could strain its technology resources and introduce operational risks, including heightened cybersecurity risk. Remote working environments may be less secure and more susceptible to hacking attacks, including phishing and social engineering attempts that seek to exploit the COVID-19 pandemic; and
COVID-19 presents a significant threat to our Investment Adviser’s employees’ well-being and morale. While our Advisor has implemented a business continuity plan to protect the health of its employees and has contingency plans in place for key employees or executive officers who may become sick or otherwise unable to perform their duties for an extended period of time, such plans cannot anticipate all scenarios, and our Advisor may experience potential loss of productivity or a delay in the roll out of certain strategic plans.
The impact of COVID-19 may also heighten the other risks discussed in this report.
Changes in interest rates may adversely affect the value of our portfolio investments which could have an adverse effect on our business, financial condition and results of operations.
Our debt investments may be based on floating rates, such as the London Interbank Offered Rate (“LIBOR”), the Euro Interbank Offered Rate (“EURIBOR”), the federal funds rate or the prime rate. General interest rate fluctuations may have a substantial negative impact on our investments, the value of our common stock and our rate of return on invested capital. A reduction in the interest rates on new investments relative to interest rates on current investments could also have an adverse impact on our net interest income. An increase in interest rates could decrease the value of any investments we hold which earn fixed interest rates, including subordinated loans, senior and junior secured and unsecured debt securities and loans and high-yield bonds, and also could increase our interest expense, thereby decreasing our net income. Also, an increase in interest rates available to investors could make investment in our common stock less attractive if we are not able to increase our dividend rate, which could reduce the value of our common stock.
Because we have borrowed money, and may issue preferred stock to finance investments, our net investment income depends, in part, upon the difference between the rate at which we borrow funds or pay distributions on preferred stock and the rate that our investments yield. As a result, we can offer no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

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Declining interest rates also can adversely affect our overall performance, because we may be forced to re-deploy principal and interest payments from existing investments into lower-yielding investments. This “reinvestment risk” can be exacerbated to the extent borrowers can prepay their loans without significant penalties, particularly because such prepayments tend to increase as interest rates decline.
You should also be aware that a change in the general level of interest rates can be expected to lead to a change in the interest rate we receive on many of our debt investments. Accordingly, a change in the interest rate could make it easier for us to meet or exceed the performance threshold and may result in a substantial increase in the amount of incentive fees payable to our Investment Adviser with respect to the portion of the incentive fee based on income.
Price declines and illiquidity in the corporate debt markets have adversely affected, and may in the future adversely affect, the fair value of our portfolio investments, reducing our net asset value through increased net unrealized depreciation.
As a BDC, we are required to carry our investments at market value or, if no market value is ascertainable, at fair value as determined in good faith by or under the direction of our Board. Decreases in the market values or fair values of our investments are recorded as unrealized depreciation, which reduces our net asset value. Depending on market conditions, we could incur substantial realized losses and may suffer additional unrealized losses in future periods, which could have a material adverse impact on our business, financial condition and results of operations.
Capital markets may experience periods of disruption and instability. Such market conditions may materially and adversely affect debt and equity capital markets in the United States and abroad, which may have a negative impact on our business and operations.
From time to time, capital markets may experience periods of disruption and instability. For example, between 2007 and 2009, the global capital markets experienced an extended period of disruption as evidenced by a lack of liquidity in the debt capital markets, write-offs in the financial services sector, the re-pricing of credit risk and the failure of certain major financial institutions. At that time, despite actions of the United States, federal government and foreign governments, these events contributed to worsening general economic conditions that materially and adversely impacted the broader financial and credit markets and reduced the availability of debt and equity capital for the market as a whole and financial services firms in particular. While market conditions have largely recovered from the events of 2008 and 2009, there have been continuing periods of volatility, some lasting longer than others. Most recently, the outbreak of the novel coronavirus, or COVID-19, in many countries, including the United States, continues to adversely impact domestic and global commercial activity, and has contributed to significant volatility in financial markets in the United States and globally. See “Major public health issues, and specifically the novel coronavirus COVID-19, could have an adverse impact on our financial condition and results of operations and other aspects of our business.”
Given the extreme volatility and dislocation that the capital markets have historically experienced, many BDCs have faced, and may in the future face, a challenging environment in which to raise capital. We may in the future have difficulty accessing debt and equity capital, and a severe disruption in the global financial markets or deterioration in credit and financing conditions could have a material adverse effect on our business, financial condition and results of operations. In addition, significant changes in the capital markets, including the extreme volatility and disruption, have had, and may in the future have, a negative effect on the valuations of our investments and on the potential for liquidity events involving our investments. An inability to raise capital, and any required sale of our investments for liquidity purposes, could have a material adverse impact on our business, financial condition or results of operations. AIM monitors developments and seeks to manage our investments in a manner consistent with achieving our investment objective, but there can be no assurance that it will be successful in doing so; and AIM may not timely anticipate or manage existing, new or additional risks, contingencies or developments, including regulatory developments in the current or future market environment.

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Volatility in the global financial markets resulting from relapse of the Eurozone crisis, geopolitical developments in Eastern Europe, turbulence in the Chinese stock markets and global commodity markets, the United Kingdom’s vote to leave the European Union or otherwise could have a material adverse effect on our business, financial condition and results of operations.

Volatility in the global financial markets could have an adverse effect on the United States and could result from a number of causes, including a relapse in the Eurozone crisis, geopolitical developments in Eastern Europe, turbulence in the Chinese stock markets and global commodity markets or otherwise. In 2010, a financial crisis emerged in Europe, triggered by high budget deficits and rising direct and contingent sovereign debt in Greece, Ireland, Italy, Portugal and Spain, which created concerns about the ability of these nations to continue to service their sovereign debt obligations. While the financial stability of many of such countries has improved significantly, risks resulting from any future debt crisis in Europe or any similar crisis could have a detrimental impact on the global economic recovery, sovereign and non-sovereign debt in these countries and the financial condition of European financial institutions.

Market and economic disruptions have affected, and may in the future affect, consumer confidence levels and spending, personal bankruptcy rates, levels of incurrence and default on consumer debt and home prices, among other factors. Recently, uncertainty between the United States and other countries with respect to trade policies, treaties and tariffs, among other factors, have caused disruptions in the global markets, including markets in which we participate. We cannot assure you that these market conditions will not continue or worsen in the future. Furthermore, we cannot assure you that market disruptions in Europe, including the increased cost of funding for certain governments and financial institutions, will not impact the global economy, and we cannot assure you that assistance packages will be available, or if available, be sufficient to stabilize countries and markets in Europe or elsewhere affected by a financial crisis. To the extent uncertainty regarding any economic recovery in Europe negatively impacts consumer confidence and consumer credit factors, our business, financial condition and results of operations could be significantly and adversely affected.

In the second quarter of 2015, stock prices in China experienced a significant drop, resulting primarily from continued sell-off of shares trading in Chinese markets. In addition, in August 2015, Chinese authorities sharply devalued China's currency. Since then, the Chinese capital markets have continued to experience periods of instability. These market and economic disruptions have affected, and may in the future affect, the U.S. capital markets, which could adversely affect our business, financial condition or results of operations.

The occurrence of events similar to those in recent years, such as the aftermath of the war in Iraq, instability in Afghanistan, Pakistan, Egypt, Libya, Syria, Russia, Ukraine and the Middle East, ongoing epidemics of infectious diseases in certain parts of the world, such as the previously mentioned COVID-19 outbreak, terrorist attacks in the U.S. and around the world, social and political discord, debt crises (such as the Greek crisis), sovereign debt downgrades, continued tensions between North Korea and the United States and the international community generally, new and continued political unrest in various countries, such as Venezuela, the exit or potential exit of one or more countries from the European Union (the "EU") or the Economic and Monetary Union (the "EMU"), the change in the U.S. president and the new administration, among others, may result in market volatility, may have long term effects on the U.S. and worldwide financial markets, and may cause further economic uncertainties in the U.S. and worldwide.


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On January 31, 2020, the United Kingdom technically withdrew from the EU (“Brexit”), triggering a negotiated transition period during which the United Kingdom remains in the EU single market and customs union and remains subject to EU laws and regulations. The transition period expired on December 31, 2020. On December 24, 2020, negotiators representing the United Kingdom and the EU came to a preliminary trade agreement, the EU-UK Trade and Cooperation Agreement (“TCA”), which is an agreement on the terms governing certain aspects of the EU’s and United Kingdom’s relationship following the end of the transition period. On December 30, 2020, the United Kingdom and the EU signed the TCA, which was ratified by the British Parliament on the same day. The TCA has been provisionally applied since January 1, 2021 but cannot formally enter into force until ratified by the European Parliament. It is expected the TCA will be ratified by European Parliament in 2021. However, even under the TCA, many aspects of the United Kingdom-EU trade relationship remain subject to further negotiation. Due to political uncertainty, it is not possible to anticipate the form or nature of the future trading relationship between the United Kingdom and the EU. While certain measures have been proposed and/or implemented within the United Kingdom and at the EU level or at the member state level, which are designed to minimize disruption in the financial markets, it is not currently possible to determine whether such measures would achieve their intended effects. Notwithstanding the foregoing, the extent of the impact of the withdrawal and the resulting economic arrangements in the United Kingdom and in global markets as well as any associated adverse consequences remain unclear and may lead to ongoing political and economic uncertainty and periods of exacerbated volatility in both the United Kingdom and in wider European markets for some time. The mid-to-long term uncertainty may have a negative effect on the performance of any investments in issuers that are economically tied to the United Kingdom or Europe. Additionally, the decision made in the United Kingdom referendum may lead to a call for similar referenda in other European jurisdictions which may cause increased economic volatility and uncertainty in the European and global markets. This volatility and uncertainty may have an adverse effect on the economy generally and on the ability of us and our portfolio companies to execute our respective strategies and to receive attractive returns.

The occurrence of any of these above event(s) could have a significant adverse impact on the value and risk profile of the Company’s portfolio. The Company does not know how long the securities markets may be affected by similar events and cannot predict the effects of similar events in the future on the U.S. economy and securities markets. Non-investment grade and equity securities tend to be more volatile than investment-grade fixed income securities; therefore, these events and other market disruptions may have a greater impact on the prices and volatility of non-investment grade and equity securities than on investment-grade fixed income securities. There can be no assurances that similar events and other market disruptions will not have other material and adverse implications.

Should the U.S economy be adversely impacted by increased volatility in the global financial markets caused by continued contagion from the Eurozone crisis, further turbulence in Chinese stock markets and global commodity markets, Brexit or for any other reason, loan and asset growth and liquidity conditions at U.S. financial institutions, including us, may deteriorate.

Uncertainty with respect to the financial stability of the United States and several countries in the EU could have a significant adverse effect on our business, financial condition, and results of operations.

Recent U.S. debt ceiling and budget deficit concerns, have increased the possibility of a downgrade of the U.S. long-term sovereign debt credit rating or a recession or economic slowdown in the U.S. In the future, the U.S. Government may not be able to meet its debt payments unless the federal debt ceiling is raised. On August 2, 2019, the federal debt limit was suspended until July 2021. If, prior to such date, legislation increasing the debt ceiling is not enacted and the debt ceiling is reached, the U.S. federal government may stop or delay making payments on its obligations, which could negatively impact the U.S. economy and our portfolio companies. In addition, disagreement over the federal budget has caused the U.S. federal government to shut down for periods of time. Continued adverse political and economic conditions, further downgrades or warnings by The Standard & Poor Financial Services LLC's Rating Service or other rating agencies, and the U.S. Government’s credit and deficit concerns in general, including issues around the federal debt ceiling, could cause interest rates and borrowing costs to rise, which may negatively impact both the perception of credit risk associated with our debt portfolio and our ability to access the debt markets on favorable terms.


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Changes in existing laws or regulations, the interpretations thereof or newly enacted laws or regulations may negatively impact our business.

Changes in laws or regulations governing our operations or the operations of our portfolio companies, or newly enacted laws or regulations, such as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), Public Law No. 115-97 (the “Tax Cuts and Jobs Act”), the Coronavirus Aid, Relief, and Economic Security Act and the Small Business Credit Availability Act (the “SBCAA”), could require changes to certain of our business, practices or that of our portfolio companies. These changes could negatively impact the operations, cash flows or financial condition of us or our portfolio companies, impose additional costs on us or our portfolio companies or otherwise adversely affect our business, or business of our portfolio companies.

On May 24, 2018, President Trump signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act, which increased from $50 billion to $250 billion the asset threshold for designation of “systemically important financial institutions” or “SIFIs” subject to enhanced prudential standards set by the Federal Reserve, staggering application of this change based on the size and risk of the covered bank holding company. On May 30, 2018, the Federal Reserve voted to consider changes to the Volcker Rule that would loosen compliance requirements for all banks. On July 17, 2018, the House of Representatives passed the JOBS and Investor Confidence Act, which includes 32 pieces of legislation intended to help small businesses, entrepreneurs and investors by reforming capital markets. The proposed legislation includes provisions to expand the definition of “accredited investors,” extend on-ramp exemptions for emerging growth companies and ease securities regulations on initial public offerings. The legislation was forwarded to the Senate for consideration, where no further action was taken, although it may be reintroduced in the future. At this time it is not possible to determine the potential impact of these new laws and proposals on us.

On March 23, 2018, the SBCAA was signed into law. The SBCAA, among other things, modifies the applicable provisions of the 1940 Act to reduce the required asset coverage ratio applicable to a BDC from 200% to 150% subject to certain approval, time and disclosure requirements (including either stockholder approval or approval of a “required majority” of its board of directors). On April 4, 2018, the Board of Directors approved the application of the modified asset coverage requirements for the Company. Accordingly, effective April 4, 2019, for every $100 of net assets, we may raise $200 from senior securities, such as borrowings or issuing preferred stock, and the risks associated with an investment in us may increase.

Further areas identified as subject to potential change, amendment or repeal include the Dodd-Frank Act, including the Volcker Rule, the interpretation of those rules relating to capital, margin, trading and clearance and settlement of derivatives and various swaps and derivatives regulations, credit risk retention requirements and the authorities of the Federal Reserve, the Financial Stability Oversight Council and the SEC. Although we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business, financial condition, operating results and cash flows. Until we know what policy changes are made and how those changes impact our business and the business of our competitors over the long term, we will not know if, overall, we will benefit from them or be negatively affected by them.

United States tariff, import/export regulations and other economic sanction laws could have a significant adverse effect on our business, financial condition and results of operations.

There has been ongoing discussion and commentary regarding potential significant changes to United States trade policies, treaties and tariffs. There is significant uncertainty about the future relationship between the United States and other countries with respect to such trade policies, treaties and tariffs. Tariffs imposed by the United States on products imported into the U.S. and other changes in U.S. trade policy have resulted in, and may continue to trigger, retaliatory actions by affected countries. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. Any of these factors could depress economic activity and restrict our portfolio companies’ access to suppliers or customers and have a material adverse effect on their business, financial condition and results of operations, which in turn would negatively impact us.
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Additionally, economic sanction laws in the United States and other jurisdictions may prohibit us or our affiliates from transacting with certain countries, individuals and companies. In the United States, the U.S. Department of the Treasury’s (the “Treasury”) Office of Foreign Assets Control administers and enforces laws, executive orders and regulations establishing U.S. economic and trade sanctions, which prohibit, among other things, transactions with, and the provision of services to, certain non-U.S. countries, territories, entities and individuals. These types of sanctions may significantly restrict or completely prohibit investment activities in certain jurisdictions, and if we, our portfolio companies or other issuers in which we invest were to violate any such laws or regulations, we may face significant legal and monetary penalties.

The Foreign Corrupt Practices Act (the “FCPA”), and other anti-corruption laws and regulations, as well as anti-boycott regulations, may also apply to and restrict our activities, our portfolio companies and other issuers of our investments. If an issuer or we were to violate any such laws or regulations, such issuer or we may face significant legal and monetary penalties. The U.S. government has indicated that it is particularly focused on FCPA enforcement, which may increase the risk that an issuer or the Company becomes the subject of such actual or threatened enforcement. In addition, certain commentators have suggested that private investment firms and the funds that they manage may face increased scrutiny and/or liability with respect to the activities of their underlying portfolio companies. As such, a violation of the FCPA or other applicable regulations by us or an issuer of our portfolio investments could have a material adverse effect on us. We are committed to complying with the FCPA and other anticorruption laws and regulations, as well as anti-boycott regulations, to which it is subject. As a result, we may be adversely affected because of our unwillingness to enter into transactions that violate any such laws or regulations.

The interest rates of some of our floating-rate loans to our portfolio companies may be priced using a spread over LIBOR, which may be phased out in the future.

On July 27, 2017, the United Kingdom Financial Conduct Authority (“FCA”) announced that it would phase out the London Interbank Offered Rate (“LIBOR”) as a benchmark by the end of 2021. On November 30, 2020, the FCA announced that subject to confirmation following its consultation with the administrator of LIBOR, it would cease publication of the one-week and two-month USD LIBOR immediately after December 31, 2021 and cease publication of the remaining tenors immediately after June 30, 2023. Additionally, the Federal Reserve Board has advised banks to stop entering into new USD LIBOR based contracts. It is unclear whether new methods of calculating LIBOR will be established such that it continues to exist after 2021 and has indicated that market participants should not rely on LIBOR being available after 2023. As an alternative to LIBOR, for example, the U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, is considering replacing U.S.-dollar LIBOR with the Secured Overnight Financing Rate (“SOFR”), a new index calculated by short-term repurchase agreements, backed by Treasury securities. Abandonment of or modifications to LIBOR could have adverse impacts on newly issued financial instruments and our existing financial instruments which reference LIBOR. While some instruments may contemplate a scenario where LIBOR is no longer available by providing for an alternative rate setting methodology, not all instruments may have such provisions and there is significant uncertainty regarding the effectiveness of any such alternative methodologies. Abandonment of or modifications to LIBOR could lead to significant short-term and long-term uncertainty and market instability. If LIBOR ceases to exist, we and our portfolio companies may need to amend or restructure our existing LIBOR-based debt instruments and any related hedging arrangements that extend beyond 2023, which may be difficult, costly and time consuming. In addition, from time to time we invest in floating rate loans and investment securities whose interest rates are indexed to LIBOR. Uncertainty as to the nature of alternative reference rates and as to potential changes or other reforms to LIBOR, or any changes announced with respect to such reforms, may result in a sudden or prolonged increase or decrease in the reported LIBOR rates and the value of LIBOR-based loans and securities, including those of other issuers we or our funds currently own or may in the future own. It remains uncertain how such changes would be implemented and the effects such changes would have on us, issuers of instruments in which we invest and financial markets generally.

The expected discontinuation of LIBOR could have a significant impact on our business. The dollar amount of our outstanding debt investments and borrowings that are linked to LIBOR with maturity dates after the anticipated discontinuation date of 2023 is material. We anticipate significant operational challenges for the transition away from LIBOR including, but not limited to, amending existing loan agreements with borrowers on investments that may have not been modified with fallback language and adding effective fallback language to new agreements in the event that LIBOR is discontinued before maturity. Beyond these challenges, we anticipate there may be additional risks to our current processes and information systems that will need to be identified and evaluated by us. Due to the uncertainty of the replacement for LIBOR, the potential effect of any such event on our cost of capital and net investment income cannot yet be determined. In addition, the cessation of LIBOR could:

Adversely impact the pricing, liquidity, value of, return on and trading for a broad array of financial products, including any LIBOR-linked securities, loans and derivatives that are included in our assets and liabilities;

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Require extensive changes to documentation that governs or references LIBOR or LIBOR-based products, including, for example, pursuant to time-consuming renegotiations of existing documentation to modify the terms of outstanding investments;
Result in inquiries or other actions from regulators in respect of our preparation and readiness for the replacement of LIBOR with one or more alternative reference rates;
Result in disputes, litigation or other actions with portfolio companies, or other counterparties, regarding the interpretation and enforceability of provisions in our LIBOR-based investments, such as fallback language or other related provisions, including, in the case of fallbacks to the alternative reference rates, any economic, legal, operational or other impact resulting from the fundamental differences between LIBOR and the various alternative reference rates;
Require the transition and/or development of appropriate systems and analytics to effectively transition our risk management processes from LIBOR-based products to those based on one or more alternative reference rates, which may prove challenging given the limited history of the proposed alternative reference rates; and
Cause us to incur additional costs in relation to any of the above factors.

There is no guarantee that a transition from LIBOR to an alternative will not result in financial market disruptions, significant increases in benchmark rates, or borrowing costs to borrowers, any of which could have a material adverse effect on our business, results of operations, financial condition, and NAV price.

If AIC can no longer claim exemption from being deemed a “commodity pool operator” pursuant to Commodity Futures Trading Commission (the “CFTC”) rules, AIC and AIM could be subject to additional regulatory requirements.

In December 2019, the CFTC amended certain rules to require BDCs that trade “commodity interests” (as defined under CFTC rules) to a de minimis extent to file an electronic notice of exclusion to not be deemed a “commodity pool operator” pursuant to CFTC regulations. This exclusion allows BDCs that trade commodity interests to forgo regulation under the CEA and the CFTC. AIM has claimed this exclusion which relieves AIM from registering with the CFTC as the commodity pool operator (“CPO”) of AIC, provided that AIC (i) continues to be regulated by the SEC as a BDC, (ii) allocates no more than a designated percentage of its liquidation value to futures contracts, certain swap contracts and certain other derivative instruments that are within the jurisdiction of the Commodity Exchange Act (collectively, “CEA-regulated products”), and (iii) is not marketed to the public as a commodity pool or as a vehicle for trading in CEA-regulated products. If AIC is unable to claim this exclusion, or fails to do so in the future, with respect to us, AIM would become subject to registration and regulation as a commodity pool operator under the CEA. This additional regulation would subject AIM and AIC to additional registration and regulatory requirements, along with increasing operating expenses which could have a material adverse effect on our business, results of operations or financial condition.

The continued uncertainty relating to the U.S. and global economy could have a negative impact on our business.
Apollo Investment’s business is directly influenced by the economic cycle, and has been and could further be negatively impacted by a downturn in economic activity in the U.S. as well as globally. Fiscal and monetary actions taken by U.S. and non-U.S. government and regulatory authorities could have a material adverse impact on our business. To the extent uncertainty regarding the U.S. or global economy negatively impacts consumer confidence and consumer credit factors, our business, financial condition and results of operations could be adversely affected. Moreover, Federal Reserve policy, including with respect to certain interest rates and the decision to end its quantitative easing policy, may also adversely affect the value, volatility and liquidity of dividend and interest paying securities. Market volatility, rising interest rates and/or a return to unfavorable economic conditions could adversely affect our business.

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Changes to U.S. federal income tax laws could materially and adversely affect us and our stockholders.
The present U.S. federal income tax laws may be modified, possibly with retroactive effect, by legislative, judicial or administrative action at any time, which could affect the U.S. federal income tax treatment of us or an investment in our shares. For example, the Tax Cuts and Jobs Act enacted in 2017 made substantial changes to the Code. Among those changes are a significant permanent reduction in the generally applicable corporate tax rate, changes in the taxation of individuals and other non-corporate taxpayers that generally but not universally reduce their taxes on a temporary basis subject to ‘‘sunset’’ provisions, the elimination or modification of various previously allowed deductions (including substantial limitations on the deductibility of interest and, in the case of individuals, the deduction for personal state and local taxes), certain preferential rates of taxation on certain dividends and certain business income derived by non-corporate taxpayers in comparison to other ordinary income recognized by such taxpayers, and significant changes to the international tax rules. As a result of the recent presidential and congressional elections in the United States, there could be additional significant changes in the U.S. federal income tax laws, including a possible increase in the corporate tax rate.

Risks Relating to our Business and Structure
We may suffer credit losses.
Investment in small and middle-market companies is highly speculative and involves a high degree of risk of credit loss. These risks are likely to increase during volatile economic periods, as the U.S. and many other economies have experienced. See “Risks Relating to our Investments.”
We are dependent upon Apollo Investment Management’s key personnel for our future success and upon their access to AGM’s investment professionals and partners.
We depend on the diligence, skill and network of business contacts of the senior management of AIM specifically and AGM generally. Members of our senior management may depart at any time. We also depend, to a significant extent, on AIM’s access to the investment professionals and partners of AGM and the information and deal flow generated by the AGM investment professionals in the course of their investment and portfolio management activities. The senior management of AIM evaluates, negotiates, structures, closes and monitors our investments. Our future success depends on the continued service of senior members of AGM’s credit platform, including the senior management team of AIM. The departure of our senior management, any senior managers of AIM, or of a significant number of the investment professionals or partners of AGM, could have a material adverse effect on our ability to achieve our investment objective. In addition, we can offer no assurance that AIM will remain our Investment Adviser or that we will continue to have access to AGM’s partners and investment professionals or its information and deal flow.
Our financial condition and results of operations depend on our ability to manage future growth effectively.
Our ability to achieve our investment objective depends, in part, on our ability to grow, which depends, in turn, on AIM’s ability to identify, invest in and monitor companies that meet our investment criteria. Accomplishing this result on a cost-effective basis is largely a function of AIM’s structuring of the investment process, its ability to provide competent, attentive and efficient services to us and our access to financing on acceptable terms. The senior management team of AIM has substantial responsibilities under the investment advisory management agreement, and with respect to certain members, in connection with their roles as officers of other AGM funds.
They may also be called upon to provide managerial assistance to our portfolio companies. These demands on their time may distract them or slow the rate of investment. In order to grow, we and AIM may need to hire, train, supervise and manage new employees. Any failure to manage our future growth effectively could have a material adverse effect on our business, financial condition and results of operations.

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We operate in a highly competitive market for investment opportunities.
A number of entities compete with us to make the types of investments that we make. We compete with public and private funds, commercial and investment banks, commercial financing companies, other BDCs and, to the extent they provide an alternative form of financing, private equity funds. Competition for investment opportunities intensifies from time to time and may intensify further in the future. Some of our existing and potential competitors are substantially larger and have considerably greater financial, technical and marketing resources than we do. For example, some competitors may have a lower cost of funds and access to funding sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships than us. Furthermore, many of our competitors are not subject to the regulatory restrictions and valuation requirements that the 1940 Act imposes on us as a BDC and that the Code imposes on us as a RIC. We cannot assure you that the competitive pressures we face will not have a material adverse effect on our business, financial condition and results of operations. Also, as a result of this existing and potentially increasing competition, we may not be able to take advantage of attractive investment opportunities from time to time, and we can offer no assurance that we will be able to identify and make investments that are consistent with our investment objective.
We do not seek to compete primarily based on the interest rates we offer, and we believe that some of our competitors make loans with interest rates that are comparable to or lower than the rates we offer.
We may lose investment opportunities if we do not match our competitors’ pricing, terms and structure. The loss of such investment opportunities may limit our ability to grow or cause us to have to shrink the size of our portfolio, which could decrease our earnings. If we match our competitors’ pricing, terms and structure, we may experience decreased net interest income and increased risk of credit loss.
Any failure on our part to maintain our status as a BDC would reduce our operating flexibility.
If we do not remain a BDC, we might be regulated as a closed-end investment company under the 1940 Act, which would subject us to substantially more regulatory restrictions under the 1940 Act and correspondingly decrease our operating flexibility.
We will be subject to corporate-level income tax if we are unable to maintain our status as a RIC.
To maintain our RIC status under the Code, we must meet certain source-of-income, asset diversification and annual distribution requirements. The annual distribution requirement for a RIC generally is satisfied if we distribute at least 90% of our “investment company taxable income” (generally, our ordinary income and the excess, if any, of our net short-term capital gains over our net long-term capital losses), if any, to our stockholders on an annual basis. To the extent we use debt financing, we are subject to certain asset coverage ratio requirements and other financial covenants under loan and credit agreements, and could in some circumstances also become subject to such requirements under the 1940 Act, that could, under certain circumstances, restrict us from making distributions necessary to maintain our status as a RIC. If we are unable to obtain cash from other sources, we may fail to maintain our status as a RIC and, thus, may be subject to corporate-level income tax. To maintain our status as a RIC, we must also meet certain asset diversification requirements at the end of each calendar quarter. Failure to meet these tests may result in our having to dispose of certain investments quickly in order to prevent the loss of RIC status. Because most of our investments are in private companies, any such dispositions could be made at disadvantageous prices and may result in substantial losses. If we fail to maintain our status as a RIC for any reason and become subject to corporate-level income tax, the resulting corporate-level taxes could substantially reduce our net assets, the amount of income available for distribution and the amount of our distributions. Such a failure would have a material adverse effect on us and our stockholders.
To maintain our status as a RIC in a subsequent year, we would be required to distribute to our stockholders our earnings and profits attributable to non-RIC years. In addition, if we failed to maintain our status as a RIC for a period greater than two taxable years, then we would be required to elect to recognize and pay tax on any net built-in gain (the excess of aggregate gain, including items of income, over aggregate loss that would have been realized if we had been liquidated) or, alternatively, be subject to taxation on such built-in gain recognized for a period of five years, in order to qualify as a RIC in a subsequent year.
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We may have difficulty paying our required distributions if we recognize income before or without receiving cash representing such income.
For U.S. federal income tax purposes, we include in income certain amounts that we have not yet received in cash, such as original issue discount ("OID"), which may arise if, for example, we receive warrants in connection with the making of a loan or payment-in-kind interest, which represents contractual interest added to the loan balance and typically due at the end of the loan term, or possibly in other circumstances. Such OID is included in income before we receive any corresponding cash payments and could be significant relative to our overall investment activities. Loans structured with these features may represent a higher level of credit risk than loans the interest on which must be paid in cash at regular intervals. We also may be required to include in income certain other amounts that we do not receive in cash.
The incentive fee payable by us that relates to our net investment income is computed and paid on income that may include some interest that has been accrued but not yet received in cash. If a portfolio company defaults on a loan, it is possible that accrued interest previously used in the calculation of the incentive fee will become uncollectible. Consequently, while we may make incentive fee payments on income accruals that we may not collect in the future and with respect to which we do not have a formal clawback right against our Investment Adviser per se, the amount of accrued income written off in any period will reduce the income in the period in which such write-off was taken and thereby reduce such period’s incentive fee payment.
Since in certain cases we may recognize income before or without receiving cash representing such income, we may have difficulty meeting the tax requirement to distribute at least 90% of our investment company taxable income to maintain our status as a RIC. Accordingly, we may have to sell some of our investments at times we would not consider advantageous, raise additional debt or equity capital or reduce new investment originations in order to meet distribution and/or leverage requirements.
Regulations governing our operation as a BDC affect our ability to raise, and the way in which we raise, additional capital.
We may issue debt securities or preferred stock and/or borrow money from banks or other financial institutions, which we refer to collectively as “senior securities,” up to the maximum amount permitted by the 1940 Act. As a BDC, we currently are required to meet an asset coverage ratio of total assets to total borrowings and other senior securities, which include all of our borrowings and any preferred stock we may issue in the future, of at least 200%. This means that for every $100 of net assets, we may raise $100 from senior securities, such as borrowings or issuing preferred stock. If this ratio declines below 200%, the contractual arrangements governing these securities may require us to sell a portion of our investments and, depending on the nature of our leverage, repay a portion of our indebtedness at a time when such sales may be disadvantageous. On March 23, 2018, the President signed into law the SBCAA, which included various changes to regulations under the federal securities laws that impact BDCs, including changes to the 1940 Act to allow BDCs to decrease their asset coverage requirement to 150% from 200% under certain circumstances. On April 4, 2018, the Board of Directors approved the application of the modified asset coverage requirements for the Company. Accordingly, effective April 4, 2019, for every $100 of net assets, we may raise $200 from senior securities, such as borrowings or issuing preferred stock. As of April 4, 2019, if the asset coverage ratio declines below 150%, the contractual arrangements governing these securities may require us to sell a portion of our investments and, depending on the nature of our leverage, repay a portion of our indebtedness at a time when such sales may be disadvantageous.
BDCs may issue and sell common stock at a price below net asset value per share only in limited circumstances, one of which is during the one-year period after stockholder approval. In the past, our stockholders have approved a plan so that during the subsequent 12 month period we could, in one or more public or private offerings of our common stock, sell or otherwise issue shares of our common stock at a price below the then current net asset value per share, subject to certain conditions including parameters on the level of permissible dilution, approval of the sale by a majority of our independent directors and a requirement that the sale price be not less than approximately the market price of the shares of our common stock at specified times, less the expenses of the sale. Although we currently do not have such authority, we may in the future seek to receive such authority on terms and conditions set forth in the corresponding proxy statement. There is no assurance such approvals will be obtained.
In the event we sell, or otherwise issue, shares of our common stock at a price below net asset value per share, existing stockholders will experience net asset value dilution and the investors who acquire shares in such offering may thereafter experience the same type of dilution from subsequent offerings at a discount. For example, if we sell an additional 10% of our common shares at a 5% discount from net asset value, a stockholder who does not participate in that offering for its proportionate interest will suffer net asset value dilution of up to 0.5% or $5 per $1,000 of net asset value.
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In addition to issuing securities to raise capital as described above, we may in the future securitize our loans to generate cash for funding new investments. To securitize loans, we may create a wholly-owned subsidiary, contribute a pool of loans to the subsidiary and have the subsidiary issue primarily investment grade debt securities to purchasers who we would expect would be willing to accept a substantially lower interest rate than the loans earn. We would retain all or a portion of the equity in the securitized pool of loans. Our retained equity would be exposed to any losses on the portfolio of loans before any of the debt securities would be exposed to such losses. An inability to successfully securitize our loan portfolio could limit our ability to grow our business and fully execute our business strategy and adversely affect our earnings, if any. Moreover, the successful securitization of our loan portfolio might expose us to losses as the residual loans in which we do not sell interests will tend to be those that are riskier and more apt to generate losses.
We currently use borrowed funds to make investments and are exposed to the typical risks associated with leverage.
We are exposed to increased risk of loss due to our use of debt to make investments. A decrease in the value of our investments will have a greater negative impact on the value of our common stock than if we did not use debt. Our ability to make distributions will be restricted if we fail to satisfy certain of our asset coverage ratios and other financial covenants and any amounts that we use to service our indebtedness are not available for distributions to our common stockholders.
The agreements governing certain of our debt instruments require us to comply with certain financial and operational covenants. These covenants require us to, among other things, maintain certain financial ratios, including asset coverage and minimum stockholders’ equity. As of March 31, 2021, we were in compliance with these covenants. However, our continued compliance with these covenants depends on many factors, some of which are beyond our control. In the event of deterioration in the capital markets and pricing levels subsequent to this period, net unrealized loss in our portfolio may increase in the future. Absent an amendment to our senior secured credit facility, continued unrealized loss in our investment portfolio could result in non-compliance with certain covenants.
Accordingly, there are no assurances that we will continue to comply with these covenants. Failure to comply with these covenants would result in a default which, if we were unable to obtain a waiver from the debt holders, could accelerate repayment under the instruments and thereby have a material adverse impact on our liquidity, financial condition, results of operations and ability to make distributions.
Our current and future debt securities are and may be governed by an indenture or other instrument containing covenants restricting our operating flexibility. We, and indirectly our stockholders, bear the cost of issuing and servicing such securities. Any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our common stock.
We fund a portion of our investments with borrowed money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us.
Borrowings and other types of financing, also known as leverage, magnify the potential for gain or loss on amounts invested and, therefore, increase the risks associated with investing in our securities. Our lenders and debt holders have fixed dollar claims on our assets that are superior to the claims of our common stockholders or any preferred stockholders. If the value of our assets increases, then leveraging would cause the net asset value to increase more sharply than it would have had we not leveraged. Conversely, if the value of our assets decreases, leveraging would cause net asset value to decline more sharply than it otherwise would have had we not leveraged. Similarly, any increase in our income in excess of consolidated interest payable on the borrowed funds would cause our net income to increase more than it would without the leverage, while any decrease in our income would cause net income to decline more sharply than it would have had we not borrowed. Such a decline could negatively affect our ability to make distributions to our common stockholders. Leverage is generally considered a speculative investment technique.
Effective April 4, 2019 we are allowed to borrow amounts such that our asset coverage, as calculated pursuant to the 1940 Act, equals at least 150% after such borrowing. (i.e., we would be able to borrow up to two dollars for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us). Accordingly, our interest expense as a percentage of our total assets will be higher if we use increased leverage as permitted under our modified asset coverage requirement.

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As of March 31, 2021, we had approximately $1,119 million of outstanding borrowings under our senior secured credit facility and $350 million in aggregate amount outstanding of the 2025 Notes. In order for us to cover our annual interest payments on our outstanding indebtedness at March 31, 2021, we must achieve annual returns on our March 31, 2021 total assets of at least 1.65%. The weighted average stated interest rate charged on our principal amount of outstanding indebtedness as of March 31, 2021 was 2.86%. We intend to continue borrowing under our senior secured credit facility in the future and we may increase the size of it or issue additional debt securities or other evidences of indebtedness (although there can be no assurance that we will be successful in doing so). For more information on our indebtedness, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Financial Condition, Liquidity and Capital Resources.” Our ability to service our debt depends largely on our financial performance and is subject to prevailing economic conditions and competitive pressures. The amount of leverage that we employ at any particular time will depend on our Investment Adviser’s and our board of directors’ assessments of market and other factors at the time of any proposed borrowing.
Our senior secured credit facility and the 2025 Notes impose financial and operating covenants that restrict our business activities, including limitations that could hinder our ability to finance additional loans and investments or to make the distributions required to maintain our status as a RIC. A failure to renew our senior secured credit facility or to add new or replacement debt facilities or to issue additional debt securities or other evidences of indebtedness could have a material adverse effect on our business, financial condition and results of operations.
The following table illustrates the effect on return to a holder of our common stock of the leverage created by our use of borrowing at the weighted average stated interest rate of 2.86% as of March 31, 2021, together with (a) our total value of net assets as of March 31, 2021; (b) approximately $1,469.2 million in aggregate principal amount of indebtedness outstanding as of March 31, 2021 and (c) hypothetical annual returns on our portfolio of minus 10% to plus 10%.
Assumed Return on Portfolio (Net of Expenses) (1)(10)%(5)%— %%10 %
Corresponding Return to Common Stockholders (2)(29)%(16)%(4)%%20 %
(1)The assumed portfolio return is required by SEC regulations and is not a prediction of, and does not represent, our projected or actual performance. Actual returns may be greater or less than those appearing in the table. Pursuant to SEC regulations, this table is calculated as of March 31, 2021. As a result, it has not been updated to take into account any changes in assets or leverage since March 31, 2021.
(2)In order to compute the “Corresponding Return to Common Stockholders,” the “Assumed Return on Portfolio” is multiplied by the total value of our assets at March 31, 2021 to obtain an assumed return to us. From this amount, the interest expense (calculated by multiplying the weighted average stated interest rate of 2.86% by the approximately $1,469.2 million of principal debt outstanding) is subtracted to determine the return available to stockholders. The return available to stockholders is then divided by the total value of our net assets as of March 31, 2021 to determine the “Corresponding Return to Common Stockholders.”
Effective April 4, 2019, our asset coverage requirement was reduced from 200% to 150%, which may increase the risk of investing with us.
On April 4, 2018, our Board of Directors, including a “required majority” of our Board of Directors, approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the SBCAA. As a result, effective April 4, 2019, our asset coverage requirement applicable to senior securities was reduced from 200% to 150% (i.e., the revised regulatory leverage limitation permits BDCs to double the amount of borrowings, such that we would be able to borrow up to two dollars for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us), and the risks associated with an investment in us may have increased.
We may in the future determine to fund a portion of our investments with preferred stock, which would magnify the potential for gain or loss and the risks of investing in us in the same way as our borrowings.
Preferred stock, which is another form of leverage, has the same risks to our common stockholders as borrowings because the dividends on any preferred stock we issue must be cumulative. Payment of such dividends and repayment of the liquidation preference of such preferred stock must take preference over any dividends or other payments to our common stockholders, and preferred stockholders are not subject to any of our expenses or losses and are not entitled to participate in any income or appreciation in excess of their stated preference.

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Changes in interest rates may affect our cost of capital and net investment income.
Because we borrow money, and may issue preferred stock to finance investments, our net investment income will depend, in part, upon the difference between the rate at which we borrow funds or pay dividends on preferred stock and the rate at which we invest these funds. As a result, we can offer no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. In periods of rising interest rates, our cost of funds would increase except to the extent we have issued fixed rate debt or preferred stock, which could reduce our net investment income. Our long-term fixed-rate investments are generally financed primarily with equity and long-term debt. We may use interest rate risk management techniques in an effort to limit our exposure to interest rate fluctuations. Such techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act and applicable commodities laws. Interest rate hedging activities do not protect against credit risk.
We have analyzed the potential impact of changes in interest rates on interest income net of interest expense. Assuming no changes to our balance sheet as of March 31, 2021, a hypothetical one percent increase in LIBOR on our floating rate assets and liabilities would decrease our earnings by seven cents per average share over the next twelve months. Assuming no changes to our balance sheet as of March 31, 2021, a hypothetical two percent increase in LIBOR on our floating rate assets and liabilities would increase our earnings by one cent per average share over the next twelve months. Assuming no changes to our balance sheet as of March 31, 2021, a hypothetical three percent increase in LIBOR on our floating rate assets and liabilities would increase our earnings by eleven cents per average share over the next twelve months. Assuming no changes to our balance sheet as of March 31, 2021, a hypothetical four percent increase in LIBOR on our floating rate assets and liabilities would increase our earnings by twenty-one cents per average share over the next twelve months. Assuming no changes to our balance sheet as of March 31, 2021, a hypothetical one percent decrease in LIBOR on our floating rate assets and liabilities would decrease our earnings by less than one cent per average share over the next twelve months. In addition, we believe that our interest rate matching strategy and our ability to hedge mitigates the effects any changes in interest rates may have on our investment income. Although management believes that this is indicative of our sensitivity to interest rate changes, it does not adjust for potential changes in credit quality, size and composition of the assets on the balance sheet and other business developments that could affect net increase or decrease in net assets resulting from operations, or net income. Accordingly, no assurances can be given that actual results would not differ materially from the potential outcome simulated by this estimate.
A portion of our floating rate investments may include features such as LIBOR floors. To the extent we invest in credit instruments with LIBOR floors, we may lose some of the benefits of incurring leverage. Specifically, if we issue preferred stock or debt (or otherwise borrow money), our costs of leverage will increase as rates increase. However, we may not benefit from the higher coupon payments resulting from increased interest rates if our investments in LIBOR floors and rates do not rise to levels above the LIBOR floors. In this situation, we will experience increased financing costs without the benefit of receiving higher income. This in turn may result in the potential for a decrease in the level of income available for dividends or distributions made by us.
You should also be aware that a change in the general level of interest rates can be expected to lead to a change in the interest rates we receive on many of our debt investments. Accordingly, a change in interest rates could make it easier for us to meet or exceed the performance threshold and may result in a substantial increase in the amount of incentive fees payable to our Investment Adviser with respect to pre-incentive fee net investment income.
In July 2017, the head of the United Kingdom Financial Conduct Authority announced the desire to phase out the use of LIBOR by the end of 2021. See “The interest rates of some of our floating-rate loans to our portfolio companies may be priced using a spread over LIBOR, which may be phased out in the future.”
Our business requires a substantial amount of capital to grow because we must distribute most of our income.

Our business requires a substantial amount of capital. We have issued equity securities and have borrowed from financial institutions. A reduction in the availability of new capital could limit our ability to grow. We must distribute at least 90% of our investment company taxable income to maintain our RIC status. As a result, any such cash earnings may not be available to fund investment originations. We expect to continue to borrow from financial institutions and issue additional debt and equity securities. If we fail to obtain funds from such sources or from other sources to fund our investments, it could limit our ability to grow, which may have an adverse effect on the value of our securities. In addition, as a BDC, our ability to borrow or issue additional preferred stock may be restricted if our total assets are less than 150% of our total borrowings and preferred stock.

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Many of our portfolio investments are recorded at fair value as determined in good faith by or under the direction of our Board of Directors and, as a result, there is uncertainty as to the value of our portfolio investments.
A large percentage of our portfolio investments are not publicly traded. The fair value of these investments may not be readily determinable. We value these investments quarterly at fair value (based on ASC 820, its corresponding guidance and the principal markets in which these investments trade) as determined in good faith by or under the direction of our Board of Directors pursuant to a written valuation policy and a consistently applied valuation process utilizing the input of our Investment Adviser, independent valuation firms, third party pricing services and the Audit Committee of the Board of Directors. Our Board of Directors utilizes the services of independent valuation firms to aid it in determining the fair value of these investments. The types of factors that may be considered in fair value pricing of these investments include the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings, the markets in which the portfolio company does business, comparison to more liquid securities, indices and other market-related inputs, discounted cash flow, our principal market and other relevant factors. For these securities for which a quote is either not readily available or deemed not to represent fair value, we utilize independent valuation firms to assist with valuation of these Level 3 investments. Because such valuations, and particularly valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods of time and may be based on estimates, our determinations of fair value may differ materially from the values that would have been used if a readily available market for these investments existed and may differ materially from the amounts we realize on any disposition of such investments. Our net asset value could be adversely affected if our determinations regarding the fair value of these investments were materially higher than the values that we ultimately realize upon the disposal of such investments. In addition, decreases in the market values or fair values of our investments are recorded as unrealized loss. Unprecedented declines in prices and liquidity in the corporate debt markets have resulted in significant net unrealized loss in our portfolio, as well as a reduction in NAV, in the past. Depending on market conditions, we could incur substantial realized losses and may continue to suffer additional unrealized losses in future periods, which could have a material adverse impact on our business, financial condition and results of operations.
The lack of liquidity in our investments may adversely affect our business.
We generally make investments in private companies. Substantially all of these securities are subject to legal and other restrictions on resale or are otherwise less liquid than publicly traded securities. The illiquidity of our investments may make it difficult for us to sell such investments if the need arises. In addition, if we are required to liquidate all or a portion of our portfolio quickly, we may realize significantly less than the value at which we have previously recorded our investments. Furthermore, we may face other restrictions on our ability to liquidate an investment in a portfolio company to the extent that we or an affiliated manager of AGM has material non-public information regarding such portfolio company.
We may experience fluctuations in our periodic results.
We could experience fluctuations in our periodic operating results due to a number of factors, including the interest rates payable on the debt securities we acquire, the default rate on such securities, the level of our expenses (including the interest rates payable on our borrowings), the dividend rates on preferred stock we issue, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions. As a result of these factors, results for any period should not be relied upon as being indicative of performance in future periods.
Our ability to enter into transactions with our affiliates is restricted.
We are prohibited under the 1940 Act from knowingly participating in certain transactions with certain of our affiliates without the prior approval of our independent directors and, in some cases, of the SEC. Any person that owns, directly or indirectly, 5% or more of our outstanding voting securities will be our affiliate for purposes of the 1940 Act and we are generally prohibited from buying or selling any security (other than our securities) from or to such affiliate, absent the prior approval of our independent directors. The 1940 Act also prohibits certain “joint” transactions with certain of our affiliates, which could include investments in the same portfolio company (whether at the same or different times), without prior approval of our independent directors and, in some cases, of the SEC. We are prohibited from buying or selling any security from or to any person who owns more than 25% of our voting securities or certain of that person’s affiliates, or entering into prohibited joint transactions with such persons, absent the prior approval of the SEC through an exemptive order (the “Order”) (other than in certain limited situations pursuant to current regulatory guidance). The analysis of whether a particular transaction constitutes a joint transaction requires a review of the relevant facts and circumstances then existing. Similar restrictions limit our ability to transact business with our officers or directors or their affiliates.
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Under the terms of the Order, a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors must be able to reach certain conclusions in connection with a co-investment transaction, including that (1) the terms of the proposed transaction are reasonable and fair to us and our stockholders and do not involve overreaching of us or our stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of our stockholders and is consistent with our Board of Directors approved criteria. In certain situations where co-investment with one or more funds managed by AIM or its affiliates is not covered by the Order, the personnel of AIM or its affiliates will need to decide which fund will proceed with the investment. Such personnel will make these determinations based on allocation policies and procedures, which are designed to reasonably ensure that investment opportunities are allocated fairly and equitably among affiliated funds over time and in a manner that is consistent with applicable laws, rules and regulations. The Order is subject to certain terms and conditions so there can be no assurance that we will be permitted to co-invest with certain of our affiliates other than in the circumstances currently permitted by regulatory guidance and the Order.
There are significant potential conflicts of interest which could adversely affect our investment returns.
Allocation of Personnel
Potential investment and disposition opportunities are generally approved by one or more investment committees composed of personnel across AGM including Messrs. Widra, Powell, and Ryan and/or by all or a majority of Messrs. Widra, Powell and Ryan depending on the underlying investment type and/or the amount of such investment. Our executive officers and directors, and the partners of our Investment Adviser, AIM, serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as we do or of investment funds managed by our affiliates. Accordingly, they may have obligations to investors in those entities, the fulfillment of which might not be in the best interests of us or our stockholders. Moreover, we note that, notwithstanding the difference in principal investment objectives between us and other AGM funds, such other AGM sponsored funds, including new affiliated potential pooled investment vehicles or managed accounts not yet established (whether managed or sponsored by AGM or AIM itself), have and may from time to time have overlapping investment objectives with us and, accordingly, invest in, whether principally or secondarily, asset classes similar to those targeted by us. To the extent such other investment vehicles have overlapping investment objectives, the scope of opportunities otherwise available to us may be adversely affected and/or reduced. As a result, certain partners of AIM may face conflicts in their time management and commitments as well as in the allocation of investment opportunities to other AGM funds. In addition, in the event such investment opportunities are allocated among us and other investment vehicles managed or sponsored by, or affiliated with, AIM our desired investment portfolio may be adversely affected. Although AIM endeavors to allocate investment opportunities in a fair and equitable manner, it is possible that we may not be given the opportunity to participate in certain investments made by investment funds managed by AIM or investment managers affiliated with AIM.
No Information Barriers
There are no information barriers amongst AGM and certain of its affiliates. If AIM were to receive material non-public information about a particular company, or have an interest in investing in a particular company, AGM or certain of its affiliates may be prevented from investing in such company. Conversely, if AGM or certain of its affiliates were to receive material non-public information about a particular company, or have an interest in investing in a particular company, we may be prevented from investing in such company.
This risk may affect us more than it does other investment vehicles, as AIM generally does not use information barriers that many firms implement to separate persons who make investment decisions from others who might possess material, non-public information that could influence such decisions. AIM’s decision not to implement these barriers could prevent its investment professionals from undertaking certain transactions such as advantageous investments or dispositions that would be permissible for them otherwise. In addition, AIM could in the future decide to establish information barriers, particularly as its business expands and diversifies.
Co-Investment Activity and Allocation of Investment Opportunities
In certain circumstances, negotiated co-investments may be made only in accordance with the terms of the exemptive order we received from the SEC permitting us to do so. The Order is subject to certain terms and conditions so there can be no assurance that we will be permitted to co-invest with certain of our affiliates other than in the circumstances currently permitted by regulatory guidance and the Order.
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AGM and its affiliated investment managers, including AIM, may determine that an investment is appropriate both for us and for one or more other funds. In such event, depending on the availability of such investment and other appropriate factors, AIM may determine that we should invest on a side-by-side basis with one or more other funds. We may make all such investments subject to compliance with applicable regulations and interpretations, and our allocation procedures. AGM has adopted allocation procedures that are intended to ensure that each fund or account managed by AGM or certain of its affiliates (“Apollo-advised funds”) is treated in a manner that, over time, is fair and equitable. Allocations generally are made pro rata based on order size. In certain circumstances, the allocation policy provides for the allocation of investments pursuant to a predefined arrangement that is other than pro rata. As a result, in situations where a security is appropriate for us but is limited in availability, we may receive a lower allocation than may be desired by our portfolio managers or no allocation if it is determined that the investment is more appropriate for a different Apollo-advised fund because of its investment mandate. Investment opportunities may be allocated on a basis other than pro rata to the extent it is done in good faith and does not, or is not reasonably expected to, result in an improper disadvantage or advantage to one participating Apollo-advised fund as compared to another participating Apollo-advised fund.
In the event investment opportunities are allocated among us and other Apollo-advised funds, we may not be able to structure our investment portfolio in the manner desired. Although AGM endeavors to allocate investment opportunities in a fair and equitable manner, it is possible that we may not be given the opportunity to participate in certain investments made by other Apollo-advised funds or portfolio managers affiliated with AIM. Furthermore, we and the other Apollo-advised funds may make investments in securities where the prevailing trading activity may make impossible the receipt of the same price or execution on the entire volume of securities purchased or sold by us and such other Apollo-advised funds. When this occurs, the various prices may be averaged, and we will be charged or credited with the average price. Thus, the effect of the aggregation may operate on some occasions to our disadvantage. In addition, under certain circumstances, we may not be charged the same commission or commission equivalent rates in connection with a bunched or aggregated order.
It is possible that other Apollo-advised funds may make investments in the same or similar securities at different times and on different terms than we do. From time to time, we and the other Apollo-advised funds may make investments at different levels of an issuer’s capital structure or otherwise in different classes of an issuer’s securities. Such investments may inherently give rise to conflicts of interest or perceived conflicts of interest between or among the various classes of securities that may be held by such entities. Conflicts may also arise because portfolio decisions regarding us may benefit such other Apollo-advised funds. For example, the sale of a long position or establishment of a short position by us may impair the price of the same security sold short by (and therefore benefit) one or more Apollo-advised funds, and the purchase of a security or covering of a short position in a security by us may increase the price of the same security held by (and therefore benefit) one or more Apollo-advised funds. In these circumstances AIM and its affiliates will seek to resolve each conflict in a manner that is fair to the various clients involved in light of the totality of the circumstances. In some cases the resolution may not be in our best interests.
AGM and its clients may pursue or enforce rights with respect to an issuer in which we have invested, and those activities may have an adverse effect on us. As a result, prices, availability, liquidity and terms of our investments may be negatively impacted by the activities of AGM or its clients, and transactions for us may be impaired or effected at prices or terms that may be less favorable than would otherwise have been the case.
Fees and Expenses
In the course of our investing activities, we pay management and incentive fees to AIM, and reimburse AIM for certain expenses it incurs. As a result, investors in our common stock invest on a “gross” basis and receive distributions on a “net” basis after expenses, resulting in, among other things, a lower rate of return than one might achieve through direct investments. As a result of this arrangement, there may be times when the management team of AIM has interests that differ from those of our common stockholders, giving rise to a conflict.
Effective April 4, 2019, we are allowed to borrow amounts such that our asset coverage, as calculated pursuant to the 1940 Act, equals at least 150% after such borrowing (i.e., we are able to borrow up to two dollars for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us). Accordingly, the Investment Adviser may have conflicts of interest in connection with decisions to use increased leverage permitted under our modified asset coverage requirement applicable to senior securities, as the incurrence of such additional indebtedness would result in an increase in the base management fees payable to the Investment Adviser and may also result in an increase in the income based fees and capital gains incentive fees payable to the Investment Adviser.
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AIM receives a quarterly incentive fee based, in part, on our pre-incentive fee income, if any, for the immediately preceding calendar quarter. This incentive fee will not be payable to AIM unless the pre-incentive net investment income exceeds the performance threshold. To the extent we or AIM are able to exert influence over our portfolio companies, the quarterly pre-incentive fee may provide AIM with an incentive to induce our portfolio companies to prepay interest or other obligations in certain circumstances.
Allocation of Expenses
We have entered into a royalty-free license agreement with AGM, pursuant to which AGM has agreed to grant us a non-exclusive license to use the name “Apollo.” Under the license agreement, we have the right to use the “Apollo” name for so long as AIM or one of its affiliates remains the Investment Adviser. In addition, we rent office space from AIA, an affiliate of AIM, and pay AIA our allocable portion of overhead and other expenses incurred by AIA in performing its obligations under the administration agreement, including our allocable portion of the compensation, rent and other expenses of our Chief Financial Officer, Chief Legal Officer and Chief Compliance Officer and their respective staffs, which can create conflicts of interest that our Board of Directors must monitor.
In the past following periods of volatility in the market price of a company’s securities, securities class action litigation has, from time to time, been brought against that company.
If our stock price fluctuates significantly, we may be the target of securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from our business.
To the extent OID and PIK interest constitute a portion of our income, we will be exposed to typical risks associated with such income being required to be included in taxable and accounting income prior to receipt of cash representing such income.
Our investments may include OID and PIK interest arrangements, which represents contractual interest added to a loan balance and due at the end of such loan’s term. To the extent OID or PIK interest constitute a portion of our income, we are exposed to typical risks associated with such income being required to be included in taxable and accounting income prior to receipt of cash, including the following:
The higher interest rates of OID and PIK instruments reflect the payment deferral and increased credit risk associated with these instruments, and OID and PIK instruments generally represent a significantly higher credit risk than coupon loans.
Even if the accounting conditions for income accrual are met, the borrower could still default when our actual collection is supposed to occur at the maturity of the obligation.
OID and PIK instruments may have unreliable valuations because their continuing accruals require continuing judgments about the collectability of the deferred payments and the value of any associated collateral. OID and PIK income may also create uncertainty about the source of our cash distributions.
Capitalizing PIK interest to loan principal increases our gross assets, thus increasing our Investment Adviser’s future base management fees, and increases future investment income, thus increasing our Investment Adviser’s future income incentive fees at a compounding rate.
Market prices of zero-coupon or PIK securities may be affected to a greater extent by interest rate changes and may be more volatile than securities that pay interest periodically and in cash.

For accounting purposes, any cash distributions to stockholders representing OID and PIK income are not designated as paid-in capital, even if the cash to pay them derives from offering proceeds. As a result, despite the fact that a distribution representing OID and PIK income could be paid out of amounts invested by our stockholders, the 1940 Act does not require that stockholders be given notice of this fact by reporting it as a return of capital.


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Changes in the laws or regulations governing our business or the businesses of our portfolio companies and any failure by us or our portfolio companies to comply with these laws or regulations, could negatively affect the profitability of our operations or of our portfolio companies.

We are subject to changing rules and regulations of federal and state governments, as well as the stock exchange on which our common stock is listed. These entities, including the Public Company Accounting Oversight Board, the SEC and the NASDAQ Global Select Market, have issued a significant number of new and increasingly complex requirements and regulations over the course of the last several years and continue to develop additional regulations. In particular, changes in the laws or regulations or the interpretations of the laws and regulations that govern BDCs, RICs or non-depository commercial lenders could significantly affect our operations and our cost of doing business. We are subject to federal, state and local laws and regulations and are subject to judicial and administrative decisions that affect our operations, including our loan originations, maximum interest rates, fees and other charges, disclosures to portfolio companies, the terms of secured transactions, collection and foreclosure procedures and other trade practices. If these laws, regulations or decisions change, or if we expand our business into jurisdictions that have adopted more stringent requirements than those in which we currently conduct business, we may have to incur significant expenses in order to comply, or we might have to restrict our operations. In addition, if we do not comply with applicable laws, regulations and decisions, we may lose licenses needed for the conduct of our business and be subject to civil fines and criminal penalties, any of which could have a material adverse effect upon our business, financial condition and results of operations.

Provisions of the Maryland General Corporation Law and of our charter and bylaws could deter takeover attempts and have an adverse impact on the price of our common stock.

The Maryland General Corporation Law, our charter and our bylaws contain provisions that may discourage, delay or make more difficult a change in control or the removal of our directors. We are subject to Subtitle 6 of Title 3 of the Maryland General Corporate Law, the Maryland Business Combination Act, subject to any applicable requirements of the 1940 Act. Our Board of Directors has adopted a resolution exempting from the Business Combination Act any business combination between us and any other person, subject to prior approval of such business combination by our Board of Directors, including approval by a majority of our disinterested directors. If the resolution exempting business combinations is repealed or our Board of Directors does not approve a business combination, the Business Combination Act may discourage third parties from trying to acquire control of us and increase the difficulty of consummating such an offer. We are subject to Subtitle 7 of Title 3 of the Maryland General Corporate Law, the Maryland Control Share Acquisition Act. Our bylaws exempt from the Maryland Control Share Acquisition Act acquisitions of our common stock by any person. If we amend our bylaws to repeal the exemption from the Control Share Acquisition Act, the Control Share Acquisition Act also may make it more difficult for a third party to obtain control of us and increase the difficulty of consummating such an offer. We intend to give the SEC prior notice should our Board of Directors elect to amend our bylaws to repeal the exemption from the Control Share Acquisition Act.

We have also adopted other measures that may make it difficult for a third party to obtain control of us, including provisions of our charter classifying our Board of Directors in three classes serving staggered three-year terms, and provisions of our charter authorizing our Board of Directors to classify or reclassify shares of our stock in one or more classes or series, to cause the issuance of additional shares of our stock, and to amend our charter, without stockholder approval, to increase or decrease the number of shares of stock that we have authority to issue. These provisions, as well as other provisions of our charter and bylaws, may delay, defer or prevent a transaction or a change in control that might otherwise be in the best interests of our stockholders.


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We may choose to pay dividends in our own common stock, in which case you may be required to pay federal income taxes in excess of the cash dividends you receive.

We may distribute taxable dividends that are payable in cash and shares of our common stock at the election of each stockholder. The Internal Revenue Service has issued guidance on cash/stock dividends paid by publicly traded RICs where certain requirements are satisfied, including that the cash component is at least 20%. Stockholders receiving such dividends will be required to include the full amount of the dividend (including the portion payable in stock) as ordinary income (or, in certain circumstances, long-term capital gain) to the extent of our current and accumulated earnings and profits for federal income tax purposes. As a result, stockholders may be required to pay income taxes with respect to such dividends in excess of the cash dividends received. If a U.S. stockholder sells the common stock that it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our common stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in common stock. In addition, if a significant number of our stockholders determine to sell shares of our common stock in order to pay taxes owed on dividends, it may put downward pressure on the trading price of our common stock. It is unclear whether and to what extent we would choose to pay taxable dividends in cash and common stock.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common stock.

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley Act, or the subsequent testing by our independent registered public accounting firm (when undertaken, as noted below), may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors and lenders to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock.

We and our portfolio companies may experience cyber security incidents and are subject to cyber security risks.

Our business and the business of our portfolio companies relies upon secure information technology systems for data processing, storage and reporting. Despite careful security and controls design, implementation and updating, our and our portfolio company’s information technology systems could become subject to cyber-attacks. Cyber-attacks include, but are not limited to, gaining unauthorized access to digital systems (e.g., through “hacking”, malicious software coding, social engineering or “phishing” attempts) for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption. Cyber-attacks may also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of service attacks on websites (i.e., efforts to make network services unavailable to intended users). Our employees and the Investment Adviser’s employees have been and expect to continue to be the target of fraudulent calls, emails and other forms of activities. Network, system, application and data breaches could result in operational disruptions or information misappropriation, which could have a material adverse effect on our business, results of operations and financial condition or the business, results of operations and financial conditions of our portfolio companies.


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Cyber security failures or breaches by the Investment Adviser and other service providers (including, but not limited to, accountants, custodians, transfer agents and administrators), and the issuers of securities in which we invest, have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, interference with our ability to calculate its net asset value, impediments to trading, the inability of our stockholders to transact business, violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, or additional compliance costs. In addition, substantial costs may be incurred in order to prevent any cyber incidents in the future. While we have established a business continuity plan in the event of, and risk management systems to prevent, such cyber-attacks, there are inherent limitations in such plans and systems including the possibility that certain risks have not been identified. Furthermore, we cannot control the cyber security plans and systems put in place by our service providers and issuers in which we invest. We and our stockholders could be negatively impacted as a result. The costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by other means. In addition, cyber-security has become a top priority for regulators around the world, and some jurisdictions have enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data. If we fail to comply with the relevant laws and regulations, we could suffer financial losses, a disruption of our businesses, liability to investors, regulatory intervention or reputational damage.

The failure in cyber security systems, as well as the occurrence of events unanticipated in our disaster recovery systems and management continuity planning could impair our ability to conduct business effectively.

The occurrence of a disaster such as a cyber-attack, a natural catastrophe, an industrial accident, a terrorist attack or war, events unanticipated in our disaster recovery systems, or a support failure from external providers, could have an adverse effect on our ability to conduct business and on our results of operations and financial condition, particularly if those events affect our computer-based data processing, transmission, storage, and retrieval systems or destroy data. If a significant number of our managers were unavailable in the event of a disaster, our ability to effectively conduct our business could be severely compromised.

We depend heavily upon computer systems to perform necessary business functions. Despite our implementation of a variety of security measures, our computer systems could be subject to cyber-attacks and unauthorized access, such as physical and electronic break-ins or unauthorized tampering. Like other companies, we may experience threats to our data and systems, including malware and computer virus attacks, unauthorized access, system failures and disruptions. If one or more of these events occurs, it could potentially jeopardize the confidential, proprietary and other information processed and stored in, and transmitted through, our computer systems and networks, or otherwise cause interruptions or malfunctions in our operations, which could result in damage to our reputation, financial losses, litigation, increased costs, and/or regulatory penalties.

We are dependent on information systems and systems failures could significantly disrupt our business, which may, in turn, negatively affect the market price of our common stock and our ability to pay dividends.
Our business is dependent on our Investment Adviser and third parties’ communications and information systems. Any failure or interruption of those systems, including as a result of the termination of an agreement with any third-party service providers, could cause delays or other problems in our activities. Our financial, accounting, data processing, backup or other operating systems and facilities may fail to operate properly or become disabled or damaged as a result of a number of factors including events that are wholly or partially beyond our control and adversely affect our business. There could be:
sudden electrical or telecommunications outages;
natural disasters such as earthquakes, tornadoes and hurricanes;
disease pandemics;
events arising from local or larger scale political or social matters, including terrorist acts; and
cyber-attacks.
These events, in turn, could have a material adverse effect on our operating results and negatively affect the market price of our common stock and our ability to pay dividends to our stockholders.
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The effect of global climate change may impact the operations of our portfolio companies.
There is evidence of global climate change. Climate change creates physical and financial risk and some of our portfolio companies may be adversely affected by climate change. For example, the needs of customers of energy companies vary with weather conditions, primarily temperature and humidity. To the extent weather conditions are affected by climate change, energy use could increase or decrease depending on the duration and magnitude of any changes. Increased energy use due to weather changes may require additional investments by our portfolio companies engaged in the energy business in more pipelines and other infrastructure to serve increased demand. Increases in the cost of energy also could adversely affect the cost of operations of our portfolio companies if the use of energy products or services is material to their business. A decrease in energy use due to weather changes may affect some of our portfolio companies’ financial condition, through decreased revenues. Extreme weather conditions in general require more system backup, adding to costs, and can contribute to increased system stresses, including service interruptions. Energy companies could also be affected by the potential for lawsuits against or taxes or other regulatory costs imposed on greenhouse gas emitters, based on links drawn between greenhouse gas emissions and climate change.
Our Investment Adviser and Administrator have the right to resign on 60 days’ notice, and we may not be able to find a suitable replacement within that time, resulting in a disruption in our operations that could adversely affect our business, financial condition and results of operations.
Our Investment Adviser and Administrator have the right, under our investment management agreement and administration agreement, respectively, to resign at any time upon not less than 60 days’ written notice, whether we have found a replacement or not. If our Investment Adviser or our Administrator resigns, we may not be able to find a replacement or hire internal management or administration with similar expertise and ability to provide the same or equivalent services on acceptable terms within 60 days, or at all. If we are unable to do so quickly, our operations are likely to experience a disruption, our business, financial condition and results of operations as well as our ability to pay distributions are likely to be adversely affected and the market price of our shares may decline. In addition, the coordination of our internal management and investment activities or our internal administration activities, as applicable, is likely to suffer if we are unable to identify and reach an agreement with a single institution or group of executives having the expertise possessed by our Investment Adviser and its affiliates or our Administrator and its affiliates. Even if we are able to retain comparable management or administration, whether internal or external, the integration of such management or administration and their lack of familiarity with our investment objective may result in additional costs and time delays that may adversely affect our business, financial condition and results of operations.
Risks Relating to our Investments
Our investments in portfolio companies are risky, and we could lose all or part of our investment.
Investment in middle-market companies is speculative and involves a number of significant risks including a high degree of risk of credit loss. Middle-market companies may have limited financial resources and may be unable to meet their obligations under their debt securities that we hold, which may be accompanied by a deterioration in the value of any collateral and a reduction in the likelihood of us realizing any guarantees we may have obtained in connection with our investment. In addition, they typically have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors’ actions and market conditions, as well as general economic downturns. Middle-market companies are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on our portfolio company and, in turn, on us. Middle-market companies also generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position. In addition, our executive officers, directors and our Investment Adviser may, in the ordinary course of business, be named as defendants in litigation arising from our investments in the portfolio companies.

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Investments in the energy sector are subject to many risks.
We have made certain investments in and relating to the energy sector. The operations of energy companies are subject to many risks inherent in the transporting, processing, storing, distributing, mining or marketing of natural gas, natural gas liquids, crude oil, coal, refined petroleum products or other hydrocarbons, or in the exploring, managing or producing of such commodities, including, without limitation: damage to pipelines, storage tanks or related equipment and surrounding properties caused by hurricanes, tornadoes, floods, fires and other natural disasters or by acts of terrorism, inadvertent damage from construction and farm equipment, leaks of natural gas, natural gas liquids, crude oil, refined petroleum products or other hydrocarbons, and fires and explosions. These risks could result in substantial losses due to personal injury or loss of life, severe damage to and destruction of property and equipment and pollution or other environmental damage, and may result in the curtailment or suspension of their related operations, any and all of which could adversely affect our portfolio companies in the energy sector. In addition, the energy sector has experienced significant volatility at times, which may occur in the future, and which could negatively affect the returns on any investment made by the Company in this sector. In addition, valuation of certain investments includes the probability weighting of future events which are outside of management’s control. The final outcome of such events could increase or decrease the fair value of the investment in a future period.
Crude oil and natural gas prices are volatile. A substantial and/or extended decline in crude oil and natural gas prices could have a material adverse effect on some of our portfolio companies in the energy sector.
Crude oil and natural gas prices historically have been volatile and likely will continue to be volatile given current geopolitical conditions and the recent dramatic decrease in oil prices during the first and second quarter of 2020. The prices for crude oil and natural gas are subject to a variety of factors beyond our control, such as the domestic and foreign supply of crude oil and natural gas; consumer demand for crude oil and natural gas, and market expectations regarding supply and demand. These factors and the volatility of the energy markets make it extremely difficult to predict price movements. Accordingly, our portfolio companies in the energy sector are at risk for the volatility in crude oil and natural gas prices. A prolonged decline in crude oil and/or natural gas prices may have an adverse effect on our business, financial condition and/or operating results.
Cyclicality within the energy sector may adversely affect our business.
Industries within the energy sector are cyclical with fluctuations in commodity prices and demand for commodities driven by a variety of factors. The highly cyclical nature of the industries within the energy sector may lead to volatile changes in commodity prices, which may adversely affect the earnings of energy companies in which we may invest.
A prolonged continuation of depressed oil and natural gas prices could negatively impact the energy and power industry and energy-related investments within our investment portfolio.

A prolonged continuation of depressed oil and natural gas prices would adversely affect the credit quality and performance of certain of our debt and equity investments in energy and power and related companies. A decrease in credit quality and performance would, in turn, negatively affect the fair value of these investments, which would consequently negatively affect our net asset value. Should a prolonged period of depressed oil and natural gas prices occur, the ability of certain of our portfolio companies in the energy and power and related industries to satisfy financial or operating covenants imposed by us or other lenders may be adversely affected, which could, in turn, negatively impact their financial condition and their ability to satisfy their debt service and other obligations. Likewise, should a prolonged period of depressed oil and natural gas prices occur, it is possible that the cash flow and profit generating capacity of these portfolio companies could also be adversely affected thereby negatively impacting their ability to pay us dividends or distributions on our investments.
Commodities are subject to many risks that may adversely affect some of our portfolio companies.
The prices of commodities are subject to a variety of factors such as political and regulatory changes, seasonal variations, weather, technology and market conditions. These factors and the volatility of the commodities markets make it extremely difficult to predict price movements. Accordingly, the commodities industry has experienced significant volatility at times, which may occur in the future, and which could negatively affect the returns on any investment made by the Company in this industry.

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Economic recessions or downturns could impair our portfolio companies and harm our operating results.
Many of our portfolio companies may be susceptible to economic slowdowns or recessions and may be unable to repay our loans during these periods. See "Major public health issues, and specifically the novel coronavirus (COVID-19), could have an adverse impact on our financial condition and results of operations and other aspects of our business". Therefore, our non-performing assets may increase and the value of our portfolio may decrease during these periods if we are required to write down the values of our investments. Adverse economic conditions also may decrease the value of collateral securing some of our loans and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our portfolio and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events could prevent us from increasing investments and harm our operating results.
A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, acceleration of the time when the loans are due and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize the portfolio company’s ability to meet its obligations under the debt that we hold. We may incur additional expenses to the extent necessary to seek recovery upon default or to negotiate new terms with a defaulting portfolio company.
Our portfolio companies may be highly leveraged and a covenant breach by our portfolio companies may harm our operating results.
Some of our portfolio companies may be highly leveraged, which may have adverse consequences to these companies and to us as an investor. These companies may be subject to restrictive financial and operating covenants and the leverage may impair these companies’ ability to finance their future operations and capital needs. As a result, these companies’ flexibility to respond to changing business and economic conditions and to take advantage of business opportunities may be limited. Further, a leveraged company’s income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used.
A portfolio company’s failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and, potentially, termination of its loans and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize a portfolio company’s ability to meet its obligations under the debt or equity securities that we hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms, which may include the waiver of certain financial covenants, with a defaulting portfolio company.
There may be circumstances where our debt investments could be subordinated to claims of other creditors or we could be subject to, among other things, lender liability or fraudulent conveyance claims.
We could, in certain circumstances, become subject to potential liabilities that may exceed the value of our original investment in a portfolio company that experiences severe financial difficulties. For example, we may be adversely affected by laws related to, among other things, fraudulent conveyances, voidable preferences, lender liability, and the bankruptcy court’s discretionary power to disallow, subordinate or disenfranchise particular claims or re-characterize investments made in the form of debt as equity contributions.
If we do not invest a sufficient portion of our assets in qualifying assets, we could fail to qualify as a BDC or be precluded from investing according to our current business strategy.
As a BDC, we may not acquire any assets other than “qualifying assets” unless, at the time of and after giving effect to such acquisition, at least 70% of our total assets are qualifying assets. We believe that most of the investments that we may acquire in the future will constitute qualifying assets. However, we may be precluded from investing in what we believe are attractive investments, if such investments are not qualifying assets for purposes of the 1940 Act. If we do not invest a sufficient portion of our assets in qualifying assets, we could be found to be in violation of the 1940 Act provisions applicable to BDCs. This would have a material adverse effect on our business, financial condition and results of operations. Similarly, these rules could prevent us from making follow-on investments in existing portfolio companies (which could result in the dilution of our position) or could require us to dispose of investments at inappropriate times in order to come into compliance with the 1940 Act. Because most of our investments will be in private companies, and therefore will be relatively illiquid, any such dispositions could be made at disadvantageous prices and could result in substantial losses.

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Our portfolio contains a limited number of portfolio companies, which subjects us to a greater risk of significant loss if any of these companies defaults on its obligations under any of its debt securities.
A consequence of the limited number of investments in our portfolio is that the aggregate returns we realize may be significantly adversely affected if one or more of our significant portfolio company investments perform poorly or if we need to write down the value of any one significant investment. Beyond our income tax diversification requirements, we do not have fixed guidelines for diversification, and our portfolio could contain relatively few portfolio companies.
Our failure to make follow-on investments in our portfolio companies could impair the value of our portfolio.
Following an initial investment in a portfolio company, we may make additional investments in that portfolio company as “follow-on” investments, in order to: (1) increase or maintain in whole or in part our equity ownership percentage; (2) exercise warrants, options or convertible securities that were acquired in the original or subsequent financing; or (3) attempt to preserve or enhance the value of our investment.
We may elect not to make follow-on investments, may be constrained in our ability to employ available funds, or otherwise may lack sufficient funds to make those investments. We have the discretion to make any follow-on investments, subject to the availability of capital resources. The failure to make follow-on investments may, in some circumstances, jeopardize the continued viability of a portfolio company and our initial investment, or may result in a missed opportunity for us to increase our participation in a successful operation. Even if we have sufficient capital to make a desired follow-on investment, we may elect not to make a follow-on investment because we may not want to increase our concentration of risk, because we prefer other opportunities, or because we are inhibited by compliance with BDC requirements or the desire to maintain our tax status.
When we do not hold controlling equity interests in our portfolio companies, we may not be in a position to exercise control over our portfolio companies or to prevent decisions by management of our portfolio companies that could decrease the value of our investments.
We do not generally take controlling equity positions in our portfolio companies. To the extent that we do not hold a controlling equity interest in a portfolio company, we are subject to the risk that a portfolio company may make business decisions with which we disagree, and the stockholders and management of a portfolio company may take risks or otherwise act in ways that are adverse to our interests. Due to the lack of liquidity for the debt and equity investments that we typically hold in our portfolio companies, we may not be able to dispose of our investments in the event we disagree with the actions of a portfolio company, and may therefore suffer a decrease in the value of our investments.
An investment strategy focused primarily on privately-held companies presents certain challenges, including the lack of available information about these companies, a dependence on the talents and efforts of only a few key portfolio company personnel and a greater vulnerability to economic downturns.
We have invested and will continue to invest primarily in privately-held companies. Generally, little public information exists about these companies, and we are required to rely on the ability of AIM’s investment professionals to obtain adequate information to evaluate the potential returns from investing in these companies.
If we are unable to uncover all material information about these companies, we may not make a fully informed investment decision, and we may lose money on our investments. Also, privately-held companies frequently have less diverse product lines and smaller market presence than public company competitors, which often are larger. These factors could affect our investment returns.
Our portfolio companies may incur debt that ranks equally with, or senior to, our investments in such companies.
We have invested and intend to invest primarily in mezzanine and senior debt securities issued by our portfolio companies. The portfolio companies usually have, or may be permitted to incur, other debt that ranks equally with, or senior to, the debt securities in which we invest. By their terms, such debt instruments may provide that the holders are entitled to receive payment of interest or principal on or before the dates on which we are entitled to receive payments in respect of the debt securities in which we invest. Also, in the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company, holders of debt instruments ranking senior to our investment in that portfolio company would typically be entitled to receive payment in full before we receive any distribution in respect of our investment. After repaying such senior creditors, such portfolio company may not have any remaining assets to use for repaying its obligation to us. In the case of debt ranking equally with debt securities in which we invest, we would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio company.
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In addition, we may not be in a position to control any portfolio company by investing in its debt securities. As a result, we are subject to the risk that a portfolio company in which we invest may make business decisions with which we disagree and the management of such company, as representatives of the holders of their common equity, may take risks or otherwise act in ways that do not serve our interests as debt investors.
Our incentive fee may induce AIM to make certain investments, including speculative investments.
The incentive fee payable by us to AIM may create an incentive for AIM to make investments on our behalf that are risky or more speculative than would be the case in the absence of such compensation arrangement. The way in which the incentive fee payable to AIM is determined, which is calculated separately in two components as a percentage of the net investment income (subject to a performance threshold) and as a percentage of the realized gain on invested capital, may encourage our Investment Adviser to use leverage to increase the return on our investments. Under certain circumstances, the use of leverage may increase the likelihood of default, which would disfavor the holders of our common stock, including investors in offerings of common stock, securities convertible into our common stock or warrants representing rights to purchase our common stock or securities convertible into our common stock. In addition, AIM receives the incentive fee based, in part, upon net capital gains realized on our investments. Unlike the portion of the incentive fee based on net investment income, there is no performance threshold applicable to the portion of the incentive fee based on net capital gains. As a result, AIM may have a tendency to invest more in investments that are likely to result in capital gains as compared to income producing securities. Such a practice could result in our investing in more speculative securities than would otherwise be the case, which could result in higher investment losses, particularly during economic downturns.
The incentive fee payable by us to AIM also may create an incentive for AIM to invest on our behalf in instruments that have a deferred interest feature such as investments with PIK provisions. Under these investments, we would accrue the interest over the life of the investment but would typically not receive the cash income from the investment until the end of the term or upon the investment being called by the issuer. Our net investment income used to calculate the income portion of our incentive fee, however, includes accrued interest. The payment of incentive fees to AIM is made on accruals of expected cash interest. If a portfolio company defaults on a loan, it is possible that accrued interest previously used in the calculation of the incentive fee will become uncollectible. Thus, while a portion of this incentive fee would be based on income that we have not yet received in cash and with respect to which we do not have a formal claw-back right against our Investment Adviser per se, the amount of accrued income to the extent written off in any period will reduce the income in the period in which such write-off was taken and thereby reduce such period’s incentive fee payment. However, even if a loan is put on non-accrual status, its capitalized interest will not be reversed and may continue to be included in the calculation of the base management fee based on an estimation of the loan’s fair value.
We may invest, to the extent permitted by law, in the securities and instruments of other investment companies, including private funds, and, to the extent we so invest, will bear our ratable share of any such investment company’s expenses, including management and performance fees. We will also remain obligated to pay management and incentive fees to AIM with respect to the assets invested in the securities and instruments of other investment companies. With respect to each of these investments, each of our common stockholders will bear his or her share of the management and incentive fee of AIM as well as indirectly bearing the management and performance fees and other expenses of any investment companies in which we invest.
Our investments in foreign securities may involve significant risks in addition to the risks inherent in U.S. investments.
Our investment strategy contemplates that a portion of our investments may be in securities of foreign companies. Investing in foreign companies may expose us to additional risks not typically associated with investing in U.S. companies. These risks include changes in exchange control regulations, political and social instability, expropriation, imposition of foreign taxes, less liquid markets and less available information than is generally the case in the United States, higher transaction costs, less government supervision of exchanges, brokers and issuers, less developed bankruptcy laws, difficulty in enforcing contractual obligations, lack of uniform accounting and auditing standards and greater price volatility. These risks are likely to be more pronounced for investments in companies located in emerging markets and particularly for middle-market companies in these economies.
Although most of our investments are denominated in U.S. dollars, our investments that are denominated in a foreign currency are subject to the risk that the value of a particular currency may change in relation to one or more other currencies. Among the factors that may affect currency values are trade balances, the level of short-term interest rates, differences in relative values of similar assets in different currencies, long-term opportunities for investment and capital appreciation, and political developments. We may employ hedging techniques to minimize these risks, but we can offer no assurance that we will, in fact, hedge currency risk or, that if we do, such strategies will be effective.
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Hedging transactions may expose us to additional risks.
If we engage in hedging transactions, we may expose ourselves to risks associated with such transactions. We may utilize instruments such as forward contracts, currency options and interest rate swaps, caps, collars and floors to seek to hedge against fluctuations in the relative values of our portfolio positions from changes in currency exchange rates and market interest rates. Hedging against a decline in the values of our portfolio positions does not eliminate the possibility of fluctuations in the values of such positions or prevent losses if the values of such positions decline. However, such hedging can establish other positions designed to gain from those same developments, thereby offsetting the decline in the value of such portfolio positions. Such hedging transactions may also limit the opportunity for gain if the values of the underlying portfolio positions should increase. Moreover, it may not be possible to hedge against an exchange rate or interest rate fluctuation that is so generally anticipated that we are not able to enter into a hedging transaction at an acceptable price. Our ability to engage in hedging transactions may also be adversely affected by recent rules adopted by the CFTC.
While we may enter into transactions to seek to reduce currency exchange rate and interest rate risks, unanticipated changes in currency exchange rates or interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged may vary. Moreover, for a variety of reasons, we may not seek to establish a perfect correlation between such hedging instruments and the portfolio holdings being hedged. Any such imperfect correlation may prevent us from achieving the intended hedge and expose us to risk of loss. In addition, it may not be possible to hedge fully or perfectly against currency fluctuations affecting the value of securities denominated in non-U.S. currencies because the value of those securities is likely to fluctuate as a result of factors not related to currency fluctuations. Our ability to engage in hedging transactions may also be adversely affected by recent rules adopted by the CFTC.
New market structure requirements applicable to derivatives could significantly increase the costs of utilizing over-the-counter (“OTC”) derivatives.
The Dodd-Frank Act, as amended, made broad changes to the OTC derivatives market, granted significant new authority to the Commodity Futures Trading Commission, or CFTC, and the SEC to regulate OTC derivatives (swaps and security-based swaps) and participants in these markets.
These changes include, but are not limited to: requirements that many categories of the most liquid OTC derivatives (currently limited to specified interest rate swaps and index credit default swaps) be executed on qualifying, regulated exchanges and be submitted for clearing; real-time public and regulatory reporting of specified information regarding OTC derivative transactions; and enhanced documentation requirements and recordkeeping requirements. Margin requirements for uncleared OTC derivatives and position limits are also expected to be adopted by the CFTC and other regulators in the future. The CFTC has implemented mandatory clearing and exchange-trading of certain OTC derivatives contracts including many standardized interest rate swaps and credit default index swaps. The CFTC continues to approve contracts for central clearing. Exchange-trading and central clearing are expected to reduce counterparty credit risk by substituting the clearinghouse as the counterparty to a swap and increase liquidity, but exchange-trading and central clearing do not make swap transactions risk-free. Uncleared swaps, such as nondeliverable foreign currency forwards, are subject to certain margin requirements that mandate the posting and collection of minimum margin amounts. This requirement may result in the portfolio and its counterparties posting higher margin amounts for uncleared swaps than would otherwise be the case. Certain rules require centralized reporting of detailed information about many types of cleared and uncleared swaps. Reporting of swap data may result in greater market transparency, but may subject a portfolio to additional administrative burdens, and the safeguards established to protect trader anonymity may not function as expected.
While these changes are intended to mitigate systemic risk and to enhance transparency and execution quality in the OTC derivative markets, the impact of these changes is not known at this time. Furthermore, “financial end users,” such as us, that enter into OTC derivatives that are not cleared will, pending finalization of the applicable regulations, generally be required to provide margin to collateralize their obligations under such derivatives. Under current proposed rules, the level of margin that would be required to be collected in connection with uncleared OTC derivatives is in many cases substantially greater than the level currently required by market participants or clearinghouses.
Lastly, future CFTC or SEC rulemakings to implement the Dodd-Frank Act requirements could potentially limit or completely restrict our ability to use certain instruments as a part of our investment strategy, increase the costs of using these instruments or make them less effective. The SEC has also indicated that it may adopt new policies on the use of derivatives by registered investment companies. Such policies could affect the nature and extent of our use of derivatives.

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These changes could significantly increase the costs to us of utilizing OTC derivatives, reduce the level of exposure that we are able to obtain (whether for risk management or investment purposes) through OTC derivatives, and reduce the amounts available to us to make non-derivative investments. These changes could also impair liquidity in certain OTC derivatives and adversely affect the quality of execution pricing that we are able to obtain, all of which could adversely impact our investment returns. Furthermore, the margin requirements for cleared and uncleared OTC derivatives may require that AIM, in order to maintain its relief from the CFTC’s CPO registration requirements, limit our ability to enter into hedging transactions or to obtain synthetic investment exposures, in either case adversely affecting our ability to mitigate risk.
Our ability to enter into transactions involving derivatives and financial commitment transactions may be limited.
In October 2020, the SEC adopted a rulemaking regarding the ability of a BDC (or a registered investment company) to use derivatives and other transactions that create future payment or delivery obligations (except reverse repurchase agreements and similar financing transactions). Under the newly adopted rules, BDCs that use derivatives will be subject to a value-at-risk (“VaR”) leverage limit, a derivatives risk management program and testing requirements and requirements related to board reporting. These new requirements will apply unless the BDC qualifies as a “limited derivatives user,” as defined under the adopted rules. Under the new rule, a BDC may enter into an unfunded commitment agreement that is not a derivatives transaction, such as an agreement to provide financing to a portfolio company, if the BDC has, among other things, a reasonable belief, at the time it enters into such an agreement, that it will have sufficient cash and cash equivalents to meet its obligations with respect to all of its unfunded commitment agreements, in each case as it becomes due. Collectively, these requirements may limit our ability to use derivatives and/or enter into certain other financial contracts. We will not be required to comply with the new rule until August 19, 2022.
Proposed position aggregation requirements may restrict the swap positions that AIM may enter into.
The Dodd-Frank Act significantly expanded the scope of the CFTC’s authority and obligation to require reporting of, and adopt limits on, the size of positions that market participants may own or control in commodity futures and futures options contracts and swaps. The Dodd-Frank Act also narrowed existing exemptions from such position limits for a broad range of risk management transactions.
In accordance with the requirements of the Dodd-Frank Act, the CFTC is required to establish speculative position limits on additional listed futures and options on physical commodities and economically equivalent OTC derivatives; position limits applicable to swaps that are economically equivalent to United States listed futures and futures options contracts, including contracts on non-physical commodities, such as rates, currencies, equities and credit default swaps; and aggregate position limits for a broad range of derivatives contracts based on the same underlying commodity, including swaps and futures and futures options contracts.
The full impact of these recent changes is not known at this time. Individually and collectively, these changes could increase our costs of maintaining positions in commodity futures and futures option contracts and swaps and reduce the level of exposure we are able to obtain (whether for risk management or investment purposes) through commodity futures and futures option contracts and swaps. These changes could also impair liquidity in certain swaps and adversely affect the quality of execution pricing that we are able to obtain, all of which could adversely impact our investment returns.
The effects of various environmental regulations may negatively affect the aviation industry and some of our portfolio companies.
The effects of various environmental regulations may negatively affect the airline industry. This may adversely affect some of our portfolio companies. Governmental regulations regarding aircraft and engine noise and emissions levels apply based on where the relevant aircraft is registered and operated. For example, jurisdictions throughout the world have adopted noise regulations which require all aircraft to comply with noise level standards. In addition to the current requirements, the United States and the International Civil Aviation Organization (“ICAO”) have adopted a new, more stringent set of standards for noise levels which applies to engines manufactured or certified on or after January 1, 2006. Currently, U.S. regulations would not require any phase-out of aircraft that qualify with the older standards applicable to engines manufactured or certified prior to January 1, 2006, but the EU has established a framework for the imposition of operating limitations on aircraft that do not comply with the new standards and incorporated aviation-related emissions into the EU’s Emissions Trading Scheme (“ETS”) beginning in 2012.
In addition to more stringent noise restrictions, the United States and other jurisdictions are beginning to impose more stringent limits on nitrogen oxide, carbon monoxide and carbon dioxide emissions from engines, consistent with current ICAO standards. Concerns over global warming also could result in more stringent limitations on the operation of aircraft.
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The United States aviation industry is extensively regulated by government agencies, particularly the Federal Aviation Administration and the National Transportation Safety Board. New air travel regulations have been, and management anticipates will continue to be, implemented that could have a negative impact on airline and airport revenues. Continued increased regulations of the aviation industry, or a continued downturn in the aviation industry's economic situation, could have a material adverse effect on the Company.
European countries generally have relatively strict environmental regulations that can restrict operational flexibility and decrease aircraft productivity. The European Parliament has confirmed that all emissions from flights within the EU are subject to the ETS requirement, even those emissions that are emitted outside of the EU. The EU suspended the enforcement of the ETS requirements for international flights outside of the EU due to a proposal issued by the ICAO in October 2013 to develop a global program to reduce international aviation emissions. In 2016, the ICAO passed a resolution adopting the Carbon Offsetting and Reduction Scheme for International Aviation (“CORSIA”), which is a global, market-based emissions offset program to encourage carbon-neutral growth beyond 2020. A pilot phase is scheduled to begin in 2021 in which countries may voluntarily participate, and full mandatory participation is scheduled to begin in 2027. ICAO continues to develop details regarding implementation, but compliance with CORSIA will increase operating costs for affected portfolio companies. Any of these regulations could limit the economic life of the aircraft and engines, reduce their value, limit our portfolio companies’ ability to lease or sell the non-compliant aircraft and engines or, if engine modifications are permitted, require our portfolio companies to make significant additional investments in the aircraft and engines to make them compliant. In addition, compliance with current or future regulations, taxes or duties imposed to deal with environmental concerns could cause our portfolio companies to incur higher costs, thereby generating lower net revenues and resulting in an adverse impact on the financial condition of such portfolio companies.
Our investments in the healthcare and pharmaceutical services industry sector are subject to extensive government regulation and certain other risks particular to that industry.
We invest in healthcare and pharmaceutical services. Our investments in portfolio companies that operate in this sector are subject to certain significant risks particular to that industry. The laws and rules governing the business of healthcare companies and interpretations of those laws and rules are subject to frequent change. Broad latitude is given to the agencies administering those regulations. Existing or future laws and rules could force our portfolio companies engaged in healthcare to change how they do business, restrict revenue, increase costs, change reserve levels and change business practices. Healthcare companies often must obtain and maintain regulatory approvals to market many of their products, change prices for certain regulated products and consummate some of their acquisitions and divestitures. Delays in obtaining or failing to obtain or maintain these approvals could reduce revenue or increase costs. Policy changes on the local, state and federal level, such as the expansion of the government’s role in the healthcare arena and alternative assessments and tax increases specific to the healthcare industry or healthcare products as part of federal health care reform initiatives, could fundamentally change the dynamics of the healthcare industry. In particular, health insurance reform, including The Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010, or Health Insurance Reform Legislation, could have a significant effect on our portfolio companies in this industry sector. As Health Insurance Reform Legislation is implemented, our portfolio companies in this industry sector may be forced to change how they do business. We can give no assurance that these portfolio companies will be able to adapt successfully in response to these changes. Any of these factors could materially adversely affect the operations of a portfolio company in this industry sector and, in turn, impair our ability to timely collect principal and interest payments owed to us.
Risks Relating to our Debt Instruments
Our senior secured credit facility begins amortizing in December 2024 and any inability to renew, extend or replace the facility could adversely impact our liquidity and ability to find new investments or maintain distributions to our stockholders.
On December 22, 2020, the Company amended and restated the senior secured credit facility from the previous amendment, dated November 18, 2018. Lender commitments under the amended and restated agreement will remain $1.81 billion through November 19, 2022 and will decrease to $1.705 billion thereafter. The amended and restated agreement, among other things, (a) extended the expiration of the commitments from November 19, 2022 to December 22, 2024 (b) extended the stated maturity date from November 19, 2023 to December 22, 2025 and (c) amended the Minimum Shareholders’ Equity covenant to provide that the Company will not permit the Shareholders’ Equity to be less than the greater of (x) 30% of assets and (y) $705 million plus 25% of the net proceeds of sale of common equity interests after the effective date of the amended and restated agreement.
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The senior secured credit facility remains secured by substantially all of the assets in the Company’s portfolio, including cash and cash equivalents. Commencing December 31, 2024, the Company is required to repay, in twelve consecutive monthly installments of equal size, the outstanding amount under the senior secured credit facility as of December 22, 2024. In addition, the stated interest rate on the facility remains as a formula-based calculation based on a minimum borrowing base, resulting in a stated interest rate, depending on the type of borrowing, of (a) either LIBOR plus 1.75% per annum or LIBOR plus 2.00% per annum, or (b) either Alternate Base Rate plus 0.75% per annum or Alternate Base Rate plus 1% per annum. Alternate Base Rate means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate for such day plus 1/2 of 1% and (c) the rate per annum equal to 1% plus the rate appearing on Reuters Screen LIBOR01 Page at approximately 11:00 A.M., London time, on such day, for US Dollar deposits with a term of one month. As of March 31, 2021, the stated interest rate on the facility was LIBOR plus 2.00%. The Company is required to pay a commitment fee of 0.375% per annum on any unused portion of the senior secured credit facility and participation fees and fronting fees between 2.00% and 2.25% per annum on the letters of credit issued.
There can be no assurance that we will be able to renew, extend or replace the senior secured credit facility upon the termination of the lenders’ obligations to make new loans or the senior secured credit facility’s final maturity on terms that are favorable to us, if at all. Our ability to renew, extend or replace the senior secured credit facility will be constrained by then-current economic conditions affecting the credit markets. In the event that we are not able to renew, extend or replace the senior secured credit facility at the time of the termination of the lenders’ obligations to make new loans or the senior secured credit facility’s final maturity, this could have a material adverse effect on our liquidity and ability to fund new investments, our ability to make distributions to our stockholders and our ability to qualify as a RIC.
Our unsecured notes mature in 2025, and any inability to replace or repay our unsecured notes could adversely impact our liquidity and ability to fund new investments or maintain distributions to our stockholders.
On March 3, 2015, we issued $350 million aggregate principal amount of 5.250% senior unsecured notes due March 3, 2025 (the “2025 Notes”).

There can be no assurance that we will be able to replace the 2025 Notes upon their maturity on terms that are favorable to us, if at all. Our ability to replace the 2025 Notes will be constrained by then-current economic conditions affecting the credit markets. In the event that we are not able to replace or repay the 2025 Notes at the time of their maturity, this could have a material adverse effect on our liquidity and ability to fund new investments, our ability to make distributions to our stockholders and our ability to qualify as a RIC.
The trading market or market value of our debt securities may fluctuate.
Our publicly issued debt securities may or may not have an established trading market. We cannot assure you that a trading market for debt securities will ever develop or be maintained if developed. In addition to our creditworthiness, many factors may materially adversely affect the trading market for, and market value of, debt securities we may issue. These factors include, but are not limited to, the following:
the time remaining to the maturity of these debt securities;
the outstanding principal amount of debt securities with terms identical to these debt securities;
the ratings assigned by national statistical ratings agencies;
the general economic market environment;
the supply of debt securities trading in the secondary market, if any;
the redemption or repayment features, if any, of these debt securities;
the level, direction and volatility of market interest rates generally; and
market rates of interest higher or lower than rates borne by the debt securities.
You should also be aware that there may be a limited number of buyers if and when you decide to sell your debt securities. This too may materially adversely affect the market value of the debt securities or the trading market for the debt securities.

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Terms relating to redemption may materially adversely affect your return on any debt securities that we may issue.
If our noteholders’ debt securities are redeemable at our option, we may choose to redeem your debt securities at times when prevailing interest rates are lower than the interest rate paid on your debt securities. In addition, if our noteholders’ debt securities are subject to mandatory redemption, we may be required to redeem such debt securities also at times when prevailing interest rates are lower than the interest rate paid on such debt securities. In this circumstance, a noteholder may not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as the debt securities being redeemed.
Our credit ratings may not reflect all risks of an investment in our debt securities.
Our credit ratings are an assessment by third parties of our ability to pay our obligations. Consequently, real or anticipated changes in our credit ratings will generally affect the market value of our debt securities. Our credit ratings, however, may not reflect the potential impact of risks related to market conditions generally or other factors discussed above on the market value of or trading market for the publicly issued debt securities.
Risks Relating to an Investment in our Common Stock
Investing in our securities involves a high degree of risk and is highly speculative.
The investments we make in accordance with our investment objective may result in a higher amount of risk than alternative investment options and volatility or loss of principal. Our investments in portfolio companies may be highly speculative and aggressive, therefore, an investment in our securities may not be suitable for someone with a low risk tolerance.
There is a risk that investors in our equity securities may not receive distributions or that our distributions may not grow over time and that investors in our debt securities may not receive all of the interest income to which they are entitled.
We intend to make distributions on a quarterly basis to our stockholders out of assets legally available for distribution. We cannot assure you that we will achieve investment results that will allow us to make a specified level of cash distributions or year-to-year increases in cash distributions. In addition, due to the asset coverage test applicable to us as a BDC, we may in the future be limited in our ability to make distributions. Also, our revolving credit facility may limit our ability to declare dividends if we default under certain provisions or fail to satisfy certain other conditions. If we do not distribute a certain percentage of our income annually, we will suffer adverse tax consequences, including possible loss of the tax benefits available to us as a RIC. In addition, in accordance with U.S. generally accepted accounting principles and tax regulations, we include in income certain amounts that we have not yet received in cash, such as contractual payment-in-kind interest, which represents contractual interest added to the loan balance that becomes due at the end of the loan term, or the accrual of original issue or market discount. Since we may recognize income before or without receiving cash representing such income, we may have difficulty meeting the requirement to distribute at least 90% of our investment company taxable income to obtain tax benefits as a RIC.
As a RIC, we will be subject to a 4% non-deductible federal excise tax on certain undistributed income unless we distribute in a timely manner for each calendar year an amount at least equal to the sum of (1) 98% of our ordinary income for that calendar year, (2) 98.2% of our capital gain net income for the one-year period ending October 31 in that calendar year and (3) any income recognized, but not distributed, in preceding years. We will not be subject to excise taxes on amounts on which we are required to pay corporate income taxes (such as retained net capital gains). Finally, if more stockholders opt to receive cash distributions rather than participate in our dividend reinvestment plan, we may be forced to liquidate some of our investments and raise cash in order to make cash distribution payments.
Our shares may trade at discounts from net asset value or at premiums that are unsustainable over the long term.
Shares of BDCs may trade at a market price that is less than the net asset value that is attributable to those shares. This characteristic of closed-end investment companies is separate and distinct from the risk that our net asset value per share may decline. The possibility that our shares of common stock will trade at a discount from net asset value or at a premium that is unsustainable over the long term are separate and distinct from the risk that our net asset value will decrease. It is not possible to predict whether shares will trade at, above, or below net asset value.

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The market price of our securities may fluctuate significantly.
The market price and liquidity of the market for our securities may be significantly affected by numerous factors, some of which are beyond our control and may not be directly related to our operating performance. These factors include:
volatility in the market price and trading volume of securities of business development companies or other companies in our sector, which are not necessarily related to the operating performance of these companies;
changes in regulatory policies or tax guidelines, particularly with respect to RICs or business development companies;
the inclusion or exclusion of our common stock from certain indices;
changes in law, regulatory policies or tax guidelines, or interpretations thereof, particularly with respect to RICs or BDCs;
loss of RIC status;
changes in earnings or variations in operating results;
changes in the value of our portfolio of investments;
any shortfall in investment income or net investment income or any increase in losses from levels expected by investors or securities analysts;
departure of AIM’s key personnel;
operating performance of companies comparable to us;
short-selling pressure with respect to shares of our common stock or BDCs generally;
uncertainty surrounding the strength of the U.S. economic recovery;
concerns regarding volatility in the Chinese stock market and Chinese currency;
concerns regarding continued volatility of oil prices;
uncertainty between the U.S. and other countries with respect to trade policies, treaties and tariffs;
general economic trends and other external factors; and
loss of a major funding source.
We may be unable to invest the net proceeds raised from offerings on acceptable terms, which would harm our financial condition and operating results.
Until we identify new investment opportunities, we intend to either invest the net proceeds of future offerings in interest-bearing deposits or other short-term instruments or use the net proceeds from such offerings to reduce then-outstanding obligations under our credit facility. We cannot assure you that we will be able to find enough appropriate investments that meet our investment criteria or that any investment we complete using the proceeds from an offering will produce a sufficient return.
Sales of substantial amounts of our securities may have an adverse effect on the market price of our securities.
Sales of substantial amounts of our securities, or the availability of such securities for sale, could adversely affect the prevailing market prices for our securities. If this occurs and continues, it could impair our ability to raise additional capital through the sale of securities should we desire to do so.

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If you do not fully exercise your subscription rights in any rights offering of our common stock, your interest in us may be diluted and, if the subscription price is less than our net asset value per share, you may experience an immediate dilution of the aggregate net asset value of your shares.
In the event we issue subscription rights to acquire shares of our common stock, stockholders who do not fully exercise their subscription rights should expect that they will, at the completion of the rights offering, own a smaller proportional interest in us than would be the case if they fully exercised their rights. In addition, if the subscription price is less than the net asset value per share of our common stock, a stockholder who does not fully exercise its subscription rights may experience an immediate dilution of the aggregate net asset value of its shares as a result of the offering. We would not be able to state the amount of any such dilution prior to knowing the results of the offering. Such dilution could be substantial.
Stockholders may experience dilution in their ownership percentage if they do not participate in our dividend reinvestment plan.
All distributions declared in cash payable to stockholders that are participants in our dividend reinvestment plan are generally automatically reinvested in shares of our common stock. As a result, stockholders that do not participate in the dividend reinvestment plan may experience dilution over time. Stockholders who do not elect to receive distributions in shares of common stock may experience accretion to the net asset value of their shares if our shares are trading at a premium and dilution if our shares are trading at a discount. The level of accretion or discount would depend on various factors, including the proportion of our stockholders who participate in the plan, the level of premium or discount at which our shares are trading and the amount of the distribution payable to a stockholder.
Risks Relating to Issuance of our Preferred Stock
If we issue preferred stock, the net asset value and market value of our common stock may become more volatile.
We cannot assure you that the issuance of preferred stock would result in a higher yield or return to the holders of the common stock. The issuance of preferred stock would likely cause the net asset value and market value of the common stock to become more volatile. If the dividend rate on the preferred stock were to approach the net rate of return on our investment portfolio, the benefit of leverage to the holders of the common stock would be reduced. If the dividend rate on the preferred stock were to exceed the net rate of return on our portfolio, the leverage would result in a lower rate of return to the holders of common stock than if we had not issued preferred stock. Any decline in the net asset value of our investments would be borne entirely by the holders of common stock. Therefore, if the market value of our portfolio were to decline, the leverage would result in a greater decrease in net asset value to the holders of common stock than if we were not leveraged through the issuance of preferred stock. This greater net asset value decrease would also tend to cause a greater decline in the market price for the common stock.
We might be in danger of failing to maintain the required asset coverage of the preferred stock or of losing our ratings on the preferred stock or, in an extreme case, our current investment income might not be sufficient to meet the dividend requirements on the preferred stock. In order to counteract such an event, we might need to liquidate investments in order to fund a redemption of some or all of the preferred stock. In addition, we would pay (and the holders of common stock would bear) all costs and expenses relating to the issuance and ongoing maintenance of the preferred stock, including higher advisory fees if our total return exceeds the dividend rate on the preferred stock. Holders of preferred stock may have different interests than holders of common stock and may at times have disproportionate influence over our affairs.
The issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for our common stock by making an investment in the common stock less attractive. In addition, the dividends on any preferred stock we issue must be cumulative. Payment of dividends and repayment of the liquidation preference of preferred stock must take preference over any dividends or other payments to our common stockholders, and holders of preferred stock are not subject to any of our expenses or losses and are not entitled to participate in any income or appreciation in excess of their stated preference (other than convertible preferred stock that converts into common stock). In addition, under the 1940 Act, preferred stock constitutes a “senior security” for purposes of the 200% asset coverage test.

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Holders of any preferred stock we might issue would have the right to elect members of the Board of Directors and class voting rights on certain matters.
Holders of any preferred stock we might issue, voting separately as a single class, would have the right to elect two members of the Board of Directors at all times and in the event dividends become two full years in arrears would have the right to elect a majority of the directors until such arrearage is completely eliminated. In addition, preferred stockholders have class voting rights on certain matters, including changes in fundamental investment restrictions and conversion to open-end status, and accordingly can veto any such changes. Restrictions imposed on the declarations and payment of dividends or other distributions to the holders of our common stock and preferred stock, both by the 1940 Act and by requirements imposed by rating agencies or the terms of our credit facilities, might impair our ability to maintain our qualification as a RIC for federal income tax purposes. While we would intend to redeem our preferred stock to the extent necessary to enable us to distribute our income as required to maintain our qualification as a RIC, there can be no assurance that such actions could be effected in time to meet the tax requirements.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
As of March 31, 2021, we did not own any real estate or other physical properties materially important to our operations. Our administrative and principal executive offices are located at 3 Bryant Park, New York, NY 10036 and 9 West 57th Street, New York, NY 10019, respectively. We believe that our office facilities are suitable and adequate for our business as it is currently conducted.
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Item 3. Legal Proceedings
From time to time, we may become involved in various investigations, claims and legal proceedings that arise in the ordinary course of our business. Furthermore, third parties may try to seek to impose liability on us in connection with the activities of our portfolio companies. While we do not expect that the resolution of these matters if they arise would materially affect our business, financial condition or results of operations, resolution will be subject to various uncertainties and could result in the expenditure of significant financial and managerial resources.
On May 20, 2013, the Company was named as a defendant in a complaint by the bankruptcy trustee of DSI Renal Holdings and related companies (“DSI”). The complaint alleges, among other things, that the Company participated in a “fraudulent conveyance” involving a restructuring and subsequent sale of DSI in 2010 and 2011 and aided and abetted a breach of fiduciary duty. The complaint seeks, jointly and severally from all defendants, (1) damages of approximately $425 million plus interest, of which the Company’s share would be approximately $41 million plus interest, and the return of 9,000 shares of common stock of DSI obtained by the Company in the restructuring and sale and (2) punitive damages. At this point in time, the Company is unable to assess whether it may have any liability in this action. On July 20, 2017, the United States Bankruptcy Court for the District of Delaware, where the action is pending, granted in part and denied in part the Company’s (and other defendants’) motion to dismiss the complaint.
Discovery has concluded, and on April 30, 2019, defendants (including the Company) filed motions for partial summary judgment. On February 4, 2020, the court granted defendants’ summary judgment motion to cap exposure on fraudulent transfer claims at the amount of creditor claims in the estate; it denied as premature that motion with respect to common law claims. Defendants moved to reconsider that decision, which motion was denied. On March 30, 2020, the court granted two additional summary judgment motions relevant to the Company. With respect to the first motion, the court held that the trustee could not recover from defendants value that was never property of the debtor. With respect to the second motion, the Court held that the trustee could not recover from defendants payments that were made on account of debt. On December 2, 2020, the Court granted certain defendants’ motion for summary judgment on aiding and abetting breach of fiduciary duty, dismissing those claims against the Company. Claims of actual and constructive fraudulent transfer under the federal Bankruptcy Code and Delaware state law remain pending against the Company and its co‑defendants. The trustee has appealed that decision, as well as other summary judgment decisions. On January 12, 2021, following a status conference, District Court Judge Andrews withdrew his reference of the adversary proceeding to the bankruptcy court and scheduled a trial in April 2022. Judge Andrews held that Defendants could brief the issues of whether (1) the claims adjudication process should precede trial, and (2) the trustee is entitled to a jury trial. Those issues are now fully briefed, but have not yet been decided.
On November 27, 2019, Healthclaim Recovery LLC ("Healthclaim") (an entity formed by the adversary proceeding defendants, including the Company) filed objections to two creditors' claims. On January 9, 2020, the two creditors whose claims Healthclaim objected to and the Trustee filed motions to stay the Court's consideration of Healthclaim's objections. On February 25, 2020, the Court heard oral argument on the motions to stay and granted the creditors’ and Trustee’s motions and stayed consideration of Healthclaim’s objections.
Following a mediation on April 6-8, 2021, the parties executed a global settlement agreement on April 8, 2021 to settle all the claims in the litigation. On April 8, 2021, the parties notified the Bankruptcy Court and District Court that the parties had agreed to settle the claims in the litigation and that a settlement agreement would be submitted to the Bankruptcy Court for approval, and requested that the litigation in the adversary proceeding and related appeals pending in the District Court be held in abeyance pending that process. On April 13, 2021, the Trustee filed a motion in the Bankruptcy Court for approval of the settlement agreement. The Bankruptcy Court has not yet ruled on that motion.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Price Range of Common Stock and Stockholders
Our common stock is traded on the NASDAQ Global Select Market under the symbol “AINV.”
The following table sets forth, for the quarterly reporting periods indicated, the net asset value (“NAV”) per share of our common stock and the high and low sales price for our common stock, as reported on the NASDAQ Global Select Market, and distributions per share information:
NAV Per Share (1)Sales PricePremium (Discount) of High Sales Price to NAV (2)Premium (Discount) of Low Sales Price to NAV (2)Distributions Declared
HighLow
Year Ended March 31, 2021
Fourth quarter$15.88 $14.94 $10.40 (5.9)%(34.5)%$0.36 
Third quarter15.59 11.98 7.33 (23.2)%(53.0)%0.36 
Second quarter15.44 10.40 7.95 (32.6)%(48.5)%0.36 
First quarter15.29 11.94 5.25 (21.9)%(65.7)%0.45 
Year Ended March 31, 2020
Fourth quarter$15.70 $17.74 $5.20 13.0 %(66.9)%$0.45 
Third quarter18.27 18.33 15.18 0.3 %(16.9)%0.45 
Second quarter18.69 17.00 15.61 (9.1)%(16.5)%0.45 
First quarter19.00 16.52 15.12 (13.1)%(20.4)%0.45 
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(1)NAV per share is determined as of the last day in the relevant quarter and therefore may not reflect the net asset value per share on the date of the high and low sales prices. The net asset values shown are based on outstanding shares at the end of the relevant quarter.
(2)Calculated using the respective high or low sales price divided by the net asset value per share at the end of the relevant quarter.
While our common stock has from time to time traded in excess of our net asset value, there can be no assurance, however, that it will trade at such a premium (to NAV) in the future. The last reported closing market price of our common stock on May 19, 2021 was $14.59 per share. As of May 19, 2020, we had 45 stockholders of record.
Distributions
We intend to continue to make quarterly distributions to our stockholders. Our quarterly distributions, if any, will be determined by our Board of Directors. We expect that our distributions to stockholders generally will be from accumulated net investment income and from cumulative net realized capital gains, as applicable, although a portion may represent a return of capital.
We have elected to be taxed as a RIC under Subchapter M of the Code. To maintain our RIC status, we must distribute at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, out of the assets legally available for distribution. Although we intend to distribute realized net capital gains (i.e., net long-term capital gains in excess of short-term capital losses), if any, at least annually, out of the assets legally available for such distributions, we may in the future decide to retain such capital gains for investment. Currently, we have substantial net capital loss carryforwards and consequently do not expect to generate cumulative net capital gains in the foreseeable future.
We maintain an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a dividend, then stockholders’ cash distributions will be automatically reinvested in additional shares of our common stock, unless they specifically “opt out” of the dividend reinvestment plan so as to receive cash distributions.
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We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. In addition, due to the asset coverage test applicable to us as a BDC, we may in the future be limited in our ability to make distributions. Also, our revolving credit facility may limit our ability to declare distributions if we default under certain provisions or fail to satisfy certain other conditions. If we do not distribute a certain percentage of our income annually, we may suffer adverse tax consequences, including possible loss of the tax benefits available to us as a RIC.
In addition, in accordance with U.S. generally accepted accounting principles and tax regulations, we include in income certain amounts that we have not yet received in cash, such as contractual payment-in-kind interest, which represents contractual interest added to the loan balance that becomes due at the end of the loan term, or the accrual of original issue or market discount. Since we may recognize income before or without receiving cash representing such income, we may not be able to meet the requirement to distribute at least 90% of our investment company taxable income to obtain tax benefits as a RIC.
With respect to the distributions to stockholders, income from origination, structuring, closing, commitment and other upfront fees associated with investments in portfolio companies is treated as taxable income and accordingly, distributed to stockholders.
All distributions declared in cash payable to stockholders that are participants in our dividend reinvestment plan are generally automatically reinvested in shares of our common stock. Stockholders who do not elect to receive distributions in shares of common stock may experience accretion to the net asset value of their shares if our shares are trading at a premium and dilution if our shares are trading at a discount. The level of accretion or discount would depend on various factors, including the proportion of our stockholders who participate in the plan, the level of premium or discount at which our shares are trading and the amount of the dividend payable to a stockholder.
The following table lists the quarterly distributions per share from our common stock for the past two fiscal years:
Distributions Declared
Year Ended March 31, 2021
Fourth quarter$0.36 
Third quarter0.36 
Second quarter0.36 
First quarter0.45 
Year Ended March 31, 2020
Fourth quarter$0.45 
Third quarter0.45 
Second quarter0.45 
First quarter0.45 
Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
None.

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Issuer Purchases of Equity Securities
The Company adopted the following plans, approved by the Board of Directors, for the purpose of repurchasing its common stock in accordance with applicable rules specified in the 1934 Act (the “Repurchase Plans”):
Date of AdoptionMaximum Cost of Shares That May Be RepurchasedCost of Shares RepurchasedRemaining Cost of Shares That May Be Repurchased
August 6, 2015$50.0  million$50.0  million$— 
December 14, 201550.0  million50.0  million— 
September 14, 201650.0  million50.0  million— 
October 30, 201850.0  million50.0  million— 
February 6, 201950.0  million23.1  million26.9  million
Total as of March 31, 2021$250.0  million$223.1  million$26.9  million
The Repurchase Plans were designed to allow the Company to repurchase its shares both during its open window periods and at times when it otherwise might be prevented from doing so under applicable insider trading laws or because of self-imposed trading blackout periods. A broker selected by the Company will have the authority under the terms and limitations specified in an agreement with the Company to repurchase shares on the Company’s behalf in accordance with the terms of the Repurchase Plans. Repurchases are subject to SEC regulations as well as certain price, market volume and timing constraints specified in the Repurchase Plans. Pursuant to the Repurchase Plans, the Company may from time to time repurchase a portion of its shares of common stock and the Company is hereby notifying stockholders of its intention as required by applicable securities laws.
Under the Repurchase Plans described above, the Company allocated the following amounts to be repurchased in accordance with SEC Rule 10b5-1 (the “10b5-1 Repurchase Plans”):
Effective DateTermination DateAmount Allocated to 10b5-1 Repurchase Plans
September 15, 2015November 5, 2015$5.0  million
January 1, 2016
February 5, 201610.0  million
April 1, 2016May 19, 20165.0  million
July 1, 2016August 5, 201615.0  million
September 30, 2016November 8, 201620.0  million
January 4, 2017February 6, 201710.0  million
March 31, 2017May 19, 201710.0  million
June 30, 2017August 7, 201710.0  million
October 2, 2017November 6, 201710.0  million
January 3, 2018February 8, 201810.0  million
June 18, 2018August 9, 201810.0  million
September 17, 2018October 31, 201810.0  million
December 12, 2018February 7, 201910.0  million
February 25, 2019May 17, 201925.0  million
March 18, 2019May 17, 201910.0  million
June 4, 2019August 7, 201925.0  million
June 17, 2019August 7, 201920.0  million
September 16, 2019November 6, 201920.0  million
December 6, 2019February 5, 202025.0  million
December 16, 2019February 5, 202015.0  million
March 12, 2020March 19, 202020.0  million
March 30, 2021May 21, 202110.0  million
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The following table presents information with respect to the Company’s purchases of its common stock since adoption of the Repurchase Plans through March 31, 2021:
MonthTotal Number of Shares PurchasedAverage Price Paid Per Share*Total Number of Shares Purchased as Part of Publicly Announced PlansMaximum Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans
August 2015510,000 $19.71 510,000 $40.0  million
September 2015603,466 18.46 603,466 28.8  million
November 20151,116,666 18.10 1,116,666 8.6  million
December 2015627,443 17.58 627,443 47.6  million
January 2016670,708 14.91 670,708 37.6  million
June 2016362,933 16.73 362,933 31.5  million
July 201616,491 16.53 16,491 31.2  million
August 2016596,294 17.67 596,294 20.7  million
September 2016411,523 18.13 411,523 63.2  million
October 2016527,417 17.82 527,417 53.8  million
November 2016239,289 17.45 239,289 49.6  million
August 201733,333 17.96 33,333 49.0  million
September 2017186,767 17.98 186,767 45.7  million
October 2017144,867 17.96 144,867 43.1  million
November 201764,500 17.79 64,500 41.9  million
December 201750,100 17.89 50,100 41.0  million
January 2018577,386 17.32 577,386 31.0  million
February 201870,567 16.23 70,567 29.9  million
May 2018263,667 17.12 263,667 25.4  million
June 2018198,601 16.94 198,601 22.0  million
July 20188,867 16.75 8,867 21.9  million
August 2018502,767 17.11 502,767 13.3  million
September 2018444,467 16.54 444,467 5.9  million
October 2018160,800 16.46 160,800 53.3  million
November 2018595,672 15.81 595,672 43.9  million
December 2018741,389 13.49 741,359 33.9  million
February 201919,392 15.16 19,392 83.6  million
March 2019291,426 15.40 291,426 79.1  million
April 201944,534 15.23 44,534 78.4  million
May 2019298,026 15.93 298,026 73.6  million
June 2019607,073 15.97 607,073 63.9  million
July 201989,610 16.10 89,610 62.5  million
August 2019758,020 16.15 758,020 50.3  million
September 201932,371 16.26 32,371 49.7  million
October 2019495,464 15.65 495,464 42.0  million
November 20196,147 15.91 6,147 41.9  million
March 20201,286,565 11.62 1,286,565 26.9  million
Total13,654,608 $16.34 13,654,578 
____________________
* The average price per share is inclusive of commissions.
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Stock Performance Graph
This graph compares the return on our common stock with that of the Standard & Poor’s 500 Stock Index, the Russell 2000 Financial Services Index, and the S&P Small Cap 600 Financials Index, for the period March 31, 2016 through March 31, 2021. The graph assumes that, on March 31, 2016, a person invested $100 in each of the following: our common stock, the S&P 500 Index, the Russell 2000 Financial Services Index, and the S&P Small Cap 600 Financials Index. The graph measures total stockholder return, which takes into account both changes in stock price and distributions. It assumes that distributions paid are invested in like securities.
chart-19b91863d5c24236a771a.jpg
The graph and other information furnished under this Part II, Item 5 of this Annual Report on Form 10-K shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the 1934 Act. The stock price performance included in the above graph is not necessarily indicative of future stock price performance.

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Fee and Expenses
The following table is intended to assist you in understanding the costs and expenses that an investor in shares of our common stock will bear directly or indirectly based upon the assumptions set forth below. The following table and example should not be considered a representation of our future expenses. Actual expenses may be greater or less than shown. Except where the context suggests otherwise, whenever this From 10-K contains a reference to fees or expenses paid by “you,” “us” or “Apollo Investment,” or that “we” will pay fees or expenses, common stockholders will indirectly bear such fees or expenses as investors in Apollo Investment.
Stockholder transaction expenses:
Sales load (as a percentage of offering price)—%(1)
Offering expenses (as a percentage of offering price)—%(2)
Dividend reinvestment plan expenses—%(3)
Total common stockholder transaction expenses (as a percentage of offering price)None
Annual expenses (as percentage of net assets attributable to common stock) (4):
Management fees3.51%(5)
Incentive fees payable under investment advisory management agreement2.12%(6)
Interest and other debt expenses on borrowed funds5.34%(7)
Other expenses1.44%(8)
Total annual expenses12.42%(9)
Example
The following example demonstrates the projected dollar amount of total cumulative expenses that would be incurred over various periods with respect to a hypothetical investment in our common stock. These dollar amounts are based upon the assumption that our annual operating expenses (other than performance-based incentive fees) and leverage would remain at the levels set forth in the table above. Transaction expenses are not included in the following example. In the event that shares of our common stock to which this prospectus relates are sold to or through underwriters, a corresponding prospectus supplement and any related free writing prospectus will restate this example to reflect the applicable sales load.
1 year3 years5 years10 years
You would pay the following expenses on a $1,000 investment, assuming a 5% annual return$100 $285 $451 $794 
While the example assumes, as required by the SEC, a 5% annual return, our performance will vary and may result in a return greater or less than 5%. Assuming a 5% annual return, the incentive fee under the investment advisory management agreement may not be earned or payable and is not included in the example. This illustration assumes that we will not realize any capital gains computed net of all realized capital losses and gross unrealized capital depreciation in any of the indicated time periods. If we achieve sufficient returns on our investments, including through the realization of capital gains, to trigger an incentive fee of a material amount, our expenses, and returns to our investors, would be higher.
For example, if we assumed that we received our 5% annual return completely in the form of net realized capital gains on our investments, which results in a capital gains incentive fee earned, the projected dollar amount of total cumulative expenses set forth in the above illustration and the capital gains incentive fee would be as follows:
1 year3 years5 years10 years
You would pay the following expenses on a $1,000 investment, assuming a 5% annual return (all of which is subject to a capital gains incentive fee)$120 $333 $516 $866 
In addition, while the example assumes reinvestment of all dividends and distributions at net asset value, participants in our dividend reinvestment plan will receive a number of shares of our common stock, determined by dividing the total dollar
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amount of the dividend payable to a participant by the market price per share of our common stock at the close of trading on the valuation date for the dividend.

These examples and the expenses in the table above should not be considered a representation of our future expenses, and actual expenses may be greater or less than those shown.
(1)In the event that the securities are sold to or through underwriters, a corresponding prospectus supplement and any related free writing prospectus will disclose the applicable sales load. Purchases of shares of our common stock on the secondary market are not subject to sales charges but may be subject to brokerage commissions or other charges. The table does not include any sales load that stockholders may have paid in connection with their purchase of shares of our common stock.
(2)The related prospectus supplement and any related free writing prospectus will disclose the estimated amount of offering expenses, the offering price and the offering expenses borne by us as a percentage of the offering price.
(3)The expenses of the dividend reinvestment plan per share are included in “Other expenses.”
(4)“Net assets attributable to common stock” equals average net assets for the twelve month period ended March 31, 2021.
(5)Assumes management fees earned by our Investment Adviser, AIM, remain consistent with our current fee structure adjusted for new debt and equity issuances, if applicable. Calculated based on the twelve month average of gross assets for the year ended March 31, 2021.
Effective April 1, 2018, the base management fee is calculated initially at an annual rate of 1.50% (0.375% per quarter) of the lesser of (i) the average of the value of the Company’s gross assets (excluding cash or cash equivalents but including other assets purchased with borrowed amounts) at the end of each of the two most recently completed calendar quarters and (ii) the average monthly value (measured as of the last day of each month) of the Company’s gross assets (excluding cash or cash equivalents but including other assets purchased with borrowed amounts) during the most recently completed calendar quarter; provided, however, in each case, the base management fee is calculated at an annual rate of 1.00% (0.25% per quarter) of the average of the value of the Company’s gross assets (excluding cash or cash equivalents but including other assets purchased with borrowed amounts) that exceeds the product of (A) 200% and (B) the value of the Company’s net asset value at the end of the prior calendar quarter. For more detailed information about our computation of average total assets, please see Note 3 of our financial statements incorporated in this Form 10-K.
On January 16, 2019, we entered into a fee offset agreement with AIM in connection with revenue realized by AIM and its affiliates for the management of certain aircraft assets. We will receive an offsetting credit against total incentive fees otherwise due to AIM under the investment advisory management agreement. The amount offset will initially be 20% of the management fee revenue earned and incentive fee revenue realized by AIM and its affiliates in connection with managing aircraft assets on related insurance balance sheets (“New Balance Sheet Investments”), new aircraft managed account capital (“New Managed Accounts”) and new dedicated aircraft funds (“New Aircraft Funds”). Once the aggregate capital raised by New Aircraft Funds or New Managed Accounts and capital invested by the New Balance Sheet Investments exceeds $3 billion cumulatively, the fee offset will step down to 10% of the amount of incremental management fee revenue earned and incentive fee revenue realized by AIM and its affiliates. The fee offset will be in place for seven years, however the incentive fees realized by AIM and its affiliates after this seven-year period from applicable investments that were raised or made within the seven-year period will also be used to offset incentive fees payable to AIM by us. The offset will be limited to the amount of incentive fee payable by us to AIM and any unapplied fee offset which exceeds the incentive fees payable in a given quarter will carry forward to be credited against the incentive fees payable by us in subsequent quarters. For the year ended March 31, 2021, there was no fee offset.
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(6)Assumes that annual incentive fees earned by our Investment Adviser, AIM, remain consistent with our current fee structure adjusted for new debt and equity issuances, if applicable. Calculated based on the average of pre-incentive fee net investment income for the twelve month period ended March 31, 2021, excluding any potential impact from the “Incentive Fee Cap” which could result in a reduction in the incentive fee.
The Incentive Fee payable to our Investment Adviser is based on our performance and is not paid unless we achieve certain goals. It consists of two components, one based on income and the other based on capital gains, that are determined independent of each other, with the result that one component may be payable even if the other is not.
For a more detailed discussion of the calculation of this fee, see “Business—Investment Advisory Management Agreement” in this Form 10-K.
(7)Our interest and other debt expenses are based on borrowing levels and interest rates consistent with the levels during the year ended March 31, 2021. As of March 31, 2021, we had $1,469.2. million in borrowings outstanding, consisting of $1,119.2 million outstanding under our senior secured credit facility and $350.0 million aggregate principal amount of our 2025 Notes. As of March 31, 2021, the Company had $0.2 million in standby letters of credit issued through the senior secured credit facility. The amount available for borrowing under the senior secured credit facility is reduced by any standby letters of credit issued.
(8)Includes our estimated overhead expenses, including payments under the administration agreement based on our allocable portion of overhead and other expenses incurred by AIA in performing its obligations under the administration agreement. See “Business—Administrative Agreement” in this Form 10-K.
(9)“Total annual expenses” as a percentage of net assets attributable to common stock are higher than the total annual expenses percentage would be for a company that is not leveraged. We borrow money to leverage our net assets and increase our total assets. The SEC requires that the “Total annual expenses” percentage be calculated as a percentage of net assets (defined as total assets less indebtedness), rather than the total assets, including assets that have been funded with borrowed monies. If the “Total annual expenses” percentage were calculated instead as a percentage of total assets, our “Total annual expenses” would be 5.06% of total assets.

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Senior Securities
Information about our senior securities (including debt securities and other indebtedness) is shown in the following table as of each year ended March 31 over the past ten fiscal years. The report of our independent registered public accounting firm covering the total amount of senior securities outstanding as of March 31, 2021, 2020, 2019, 2018, 2017, 2016, 2015, 2014, 2013, and 2012 is included elsewhere in this annual report on Form 10-K.
Class and YearTotal Amount Outstanding (1)Asset Coverage Per Unit (2)Involuntary Liquidating Preference Per Unit (3)Estimated Market Value Per Unit (4)
Senior Secured Facility
Fiscal 2021$1,119,186 $1,705 $— N/A(5)
Fiscal 20201,449,402 1,567 — N/A(5)
Fiscal 2019638,888 2,153 — N/A(5)
Fiscal 2018285,216 2,770 — N/A(5)
Fiscal 2017200,923 2,709 — N/A(5)
Fiscal 2016637,904 2,235 — N/A(5)
Fiscal 2015384,648 2,288 — N/A(5)
Fiscal 2014602,261 2,496 — N/A(5)
Fiscal 2013536,067 2,451 — N/A(5)
Fiscal 2012539,337 2,670 — N/A(5)
Senior Secured Notes
Fiscal 2021$— $— $— — 
Fiscal 2020— — — — 
Fiscal 2019— — — —(6)
Fiscal 201816,000 2,770 — N/A(6)
Fiscal 201716,000 2,709 — N/A(6)
Fiscal 201645,000 2,235 — N/A(6)
Fiscal 2015270,000 2,288 — N/A
Fiscal 2014270,000 2,496 — N/A
Fiscal 2013270,000 2,451 — N/A
Fiscal 2012270,000 2,670 — N/A
2042 Notes
Fiscal 2021$— $— $— — 
Fiscal 2020— — — — 
Fiscal 2019— — — — 
Fiscal 2018— — — —(7)
Fiscal 2017150,000 2,709 — 101.44
Fiscal 2016150,000 2,235 — 100.04
Fiscal 2015150,000 2,288 — 99.59
Fiscal 2014150,000 2,496 — 92.11
Fiscal 2013150,000 2,451 — 97.43
Fiscal 2012— — — N/A
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Class and YearTotal Amount Outstanding (1)Asset Coverage Per Unit (2)Involuntary Liquidating Preference Per Unit (3)Estimated Market Value Per Unit (4)
2043 Notes
Fiscal 2021$— $— $— — 
Fiscal 2020— — — —(10)
Fiscal 2019150,000 2,153 — 103.80
Fiscal 2018150,000 2,770 — 101.36
Fiscal 2017150,000 2,709 — 104.12
Fiscal 2016150,000 2,235 — 101.16
Fiscal 2015150,000 2,288 — 99.74
Fiscal 2014150,000 2,496 — 89.88
Fiscal 2013— — — N/A
Fiscal 2012— — — N/A
2025 Notes
Fiscal 2021$350,000 $1,705 $— N/A
Fiscal 2020350,000 1,567 — N/A
Fiscal 2019350,000 2,153 — N/A
Fiscal 2018350,000 2,770 — N/A
Fiscal 2017350,000 2,709 — N/A
Fiscal 2016350,000 2,235 — N/A
Fiscal 2015350,000 2,288 — N/A
Fiscal 2014— — — N/A
Fiscal 2013— — — N/A
Fiscal 2012— — — N/A
Convertible Notes
Fiscal 2021$— $— $— — 
Fiscal 2020— — — — 
Fiscal 2019— — — — 
Fiscal 2018— — — — 
Fiscal 2017— — — — 
Fiscal 2016— — — —(8)
Fiscal 2015200,000 2,235 — 104.43
Fiscal 2014200,000 2,288 — 106.60
Fiscal 2013200,000 2,451 — 102.84
Fiscal 2012200,000 2,670 — 97.81(9)
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Class and YearTotal Amount Outstanding (1)Asset Coverage Per Unit (2)Involuntary Liquidating Preference Per Unit (3)Estimated Market Value Per Unit (4)
Total Debt Securities
Fiscal 2021$1,469,186 $1,705 $— N/A
Fiscal 20201,799,402 1,567 — N/A
Fiscal 20191,138,888 2,153 — N/A
Fiscal 2018801,216 2,770 — N/A
Fiscal 2017866,923 2,709 — N/A
Fiscal 20161,332,904 2,235 — N/A
Fiscal 20151,504,648 2,288 — N/A
Fiscal 20141,372,261 2,496 — N/A
Fiscal 20131,156,067 2,451 — N/A
Fiscal 20121,009,337 2,670 — N/A
____________________
(1)Total amount of each class of senior securities outstanding at the end of the period presented.
(2)The asset coverage ratio for a class of senior securities representing indebtedness is calculated as our total assets, less all liabilities and indebtedness not represented by senior securities, divided by senior securities representing indebtedness. This asset coverage ratio is multiplied by $1,000 to determine the Asset Coverage Per Unit.
(3)The amount to which such class of senior security would be entitled upon the involuntary liquidation of the issuer in preference to any security junior to it.
(4)Not applicable, except for with respect to the 2042 Notes, the 2043 Notes, and the Convertible Notes, as other senior securities do not have sufficient trading for an average market value per unit to be determined. The average market value per unit for each of the 2042 Notes, the 2043 Notes, and the Convertible Notes is based on the closing daily prices of such notes and is expressed per $100 of indebtedness (including for the 2042 Notes and the 2043 Notes, which were issued in $25 increments).
(5)Included in this amount is foreign currency debt obligations as outlined in Note 8 to the financial statements, which are incorporated this Form 10-K.
(6)On October 4, 2015, the Senior Secured Notes, which had an outstanding principal balance of $225,000, matured and were repaid in full. On September 29, 2016, the Senior Secured Notes, Series A, which had an outstanding principal balance of $29,000, matured and were repaid in full. On October 1, 2018, the Senior Secured Notes, Series B, which had an outstanding principal balance of $16,000, matured and were repaid in full.
(7)On October 16, 2017, the Company redeemed the entire $150 million aggregate principal amount outstanding of the 2042 Notes in accordance with the terms of the indenture governing the 2042 Notes, before its stated maturity.
(8)On January 15, 2016, the Convertible Notes, which had an outstanding principal balance of $200,000, matured and were repaid in full.
(9)Restrictive legends were removed in Fiscal 2012.
(10)On August 12, 2019, the Company redeemed the entire $150 million aggregate principal amount outstanding of the 2043 Notes in accordance with the terms of the indenture governing the 2043 Notes, before its stated maturity.
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Item 6. Selected Financial Data
The Part II, Item 6 is no longer required as the Company has elected to early adopt the change to Item 301 of Regulation S-K contained in SEC Release No. 33-10890.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the notes thereto contained elsewhere in this report. Some of the statements in this report constitute forward-looking statements, which relate to future events or our future performance or financial condition. The forward-looking statements contained herein involve risks and uncertainties, including statements as to:
our future operating results;
our business prospects and the prospects of our portfolio companies;
the impact of investments that we expect to make;
our contractual arrangements and relationships with third parties;
the dependence of our future success on the general economy and its impact on the industries in which we invest;
the ability of our portfolio companies to achieve their objectives;
our expected financings and investments;
the adequacy of our cash resources and working capital;
the current and future effects of the COVID-19 pandemic on us and our portfolio companies; and
the timing of cash flows, if any, from the operations of our portfolio companies.
We generally use words such as “anticipates,” “believes,” “expects,” “intends” and similar expressions to identify forward-looking statements. Our actual results could differ materially from those projected in the forward-looking statements for any reason, including any factors set forth in “Risk Factors” and elsewhere in this report.
We have based the forward-looking statements included in this report on information available to us on the date of this report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the Securities and Exchange Commission (“SEC”), including any annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
Overview
Apollo Investment Corporation (the “Company,” “Apollo Investment,” “AIC,” “we,” “us,” or “our”) was incorporated under the Maryland General Corporation Law in February 2004. We have elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). As such, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities of private or thinly traded public U.S. companies, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. In addition, for federal income tax purposes we have elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). Pursuant to this election and assuming we qualify as a RIC, we generally do not have to pay corporate-level federal income taxes on any income we distribute to our stockholders. We commenced operations on April 8, 2004 upon completion of our initial public offering that raised $870 million in net proceeds from selling 62 million shares of common stock at a price of $15.00 per share (20.7 million shares at a price of $45.00 per share adjusted for the one-for-three reverse stock split). Since then, and through March 31, 2021, we have raised approximately $2.21 billion in net proceeds from additional offerings of common stock and we have repurchased common stock for $223.1 million.

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Apollo Investment Management, L.P. (the “Investment Adviser” or “AIM”) is our investment adviser and an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (“AGM”). The Investment Adviser, subject to the overall supervision of our Board of Directors, manages the day-to-day operations of, and provides investment advisory services to the Company. AGM and other affiliates manage other funds that may have investment mandates that are similar, in whole or in part, with ours. AIM and its affiliates may determine that an investment is appropriate both for us and for one or more of those other funds. In such event, depending on the availability of such investment and other appropriate factors, AIM may determine that we should invest on a side-by-side basis with one or more other funds. We make all such investments subject to compliance with applicable regulations and interpretations, and our allocation procedures. Certain types of negotiated co-investments may be made only in accordance with the terms of the exemptive order (the “Order”) we received from the SEC permitting us to do so. Under the terms of the Order, a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors must be able to reach certain conclusions in connection with a co-investment transaction, including that (1) the terms of the proposed transaction are reasonable and fair to us and our stockholders and do not involve overreaching of us or our stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of our stockholders and is consistent with our Board of Directors’ approved criteria. In certain situations where co-investment with one or more funds managed by AIM or its affiliates is not covered by the Order, the personnel of AIM or its affiliates will need to decide which fund will proceed with the investment. Such personnel will make these determinations based on allocation policies and procedures, which are designed to reasonably ensure that investment opportunities are allocated fairly and equitably among affiliated funds over time and in a manner that is consistent with applicable laws, rules and regulations. The Order is subject to certain terms and conditions so there can be no assurance that we will be permitted to co-invest with certain of our affiliates other than in the circumstances currently permitted by regulatory guidance and the Order.
Apollo Investment Administration, LLC (the “Administrator” or “AIA”), an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. In addition to furnishing us with office facilities, equipment, and clerical, bookkeeping and recordkeeping services, AIA also oversees our financial records as well as prepares our reports to stockholders and reports filed with the SEC. AIA also performs the calculation and publication of our net asset value, the payment of our expenses and oversees the performance of various third-party service providers and the preparation and filing of our tax returns. Furthermore, AIA provides on our behalf managerial assistance to those portfolio companies to which we are required to provide such assistance.
COVID-19 Developments
In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) a pandemic, which has resulted in uncertainty and disruption in the global economy and financial markets. The global impact of the outbreak has been rapidly evolving, and as cases of COVID-19 have continued to be identified in additional countries, many countries have reacted by instituting quarantines and restrictions on travel, closing financial markets and/or restricting trading, and limiting operations of non-essential businesses. Such actions are creating disruption in global supply chains, and adversely impacting many industries. The outbreak has had and could continue to have an adverse impact on economic and market conditions and some economists, investment banks and The World Bank have indicated that current indicators point to a global recession that started in February 2020. While we are unable to accurately predict the full impact that COVID-19 will have on our results from operations, financial condition, liquidity and cash flows due to numerous uncertainties, including the duration and severity of the pandemic, containment measures and the availability of effective vaccines, our compliance with these measures has impacted our day-to-day operations and could disrupt our business and operations, as well as that of our portfolio companies, for an indefinite period of time.

Depending on the duration and extent of the disruption to the operations of our portfolio companies, we expect that certain portfolio companies will experience financial distress and possibly default on their financial obligations to us and their other capital providers. We also expect that some of our portfolio companies may significantly curtail business operations, furlough or lay off employees and terminate service providers, and defer capital expenditures if subjected to prolonged and severe financial distress, which would likely impair their business on a permanent basis. These developments would likely result in a decrease in the value of our investment in any such portfolio company.


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The COVID-19 pandemic and the related disruption and financial distress experienced by our portfolio companies may have material adverse effects on our investment income, particularly our interest income, received from our investments. In connection with the adverse effects of the COVID-19 pandemic, we may need to restructure our investments in some of our portfolio companies, which could result in reduced interest payments, an increase in the amount of PIK interest we receive, or result in permanent impairments on our investments. Our investment valuations are inherently less certain than they would be absent the current and potential impacts of COVID-19 and the values assigned as of this date may materially differ from the values that may ultimately be realized. The downturn in the aviation industry from COVID-19 has resulted in Merx Aviation recording impairment losses related to aircraft leasing and impacted its financial condition. This may result in the further unrealized depreciation in value on the Company’s investments in Merx. Further, any additional write downs in the value of our investments may reduce our net asset value. These events may also limit our investment origination pipeline and may increase our future funding costs.

A significant reduction in our net change in unrealized gains/losses may result due to decreases in the fair value of some of our portfolio company investments due to the immediate adverse economic effects of the COVID-19 pandemic and the continuing uncertainty surrounding its long-term impact. We believe that the COVID-19 pandemic represents an extraordinary circumstance that could materially impact the fair value of our investments. As a result, the fair value of our portfolio investments may be further negatively impacted after March 31, 2021 by continued duration of the adverse market, as well as circumstances and events that are not yet known.

We are also subject to financial risks, including changes in market interest rates. As of March 31, 2021, all of our debt portfolio investments bore interest at variable rates, which generally are LIBOR-based (or based on an equivalent applicable currency rate), and many of which are subject to certain floors. In connection with the COVID-19 pandemic, the U.S. Federal Reserve and other central banks have reduced certain interest rates and LIBOR has decreased. A prolonged reduction in interest rates will reduce our gross investment income and could result in a decrease in our net investment income if such decreases in LIBOR are not offset by a corresponding increase in the spread over LIBOR that we earn on any portfolio investments, a decrease in in our operating expenses, including with respect to our income incentive fee, or a decrease in the interest rate of our floating interest rate liabilities tied to LIBOR. See “Item 3. Quantitative and Qualitative Disclosures About Market Risk” for an analysis of the impact of hypothetical base rate changes in interest rates.
LIBOR Developments
On July 27, 2017, the Financial Conduct Authority (“FCA”) announced that it would phase out the London Interbank Offered Rate (“LIBOR”) as a benchmark by the end of 2021 and the FCA has indicated that market participants should not rely on LIBOR being available after 2021. As an alternative to LIBOR, for example, the U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, is considering replacing U.S.-dollar LIBOR with the Secured Overnight Financing Rate, a new index calculated by short-term repurchase agreements, backed by Treasury securities. Abandonment of or modifications to LIBOR could have adverse impacts on newly issued financial instruments and our existing financial instruments which reference LIBOR. Uncertainty as to the nature of alternative reference rates and as to potential changes or other reforms to LIBOR, or any changes announced with respect to such reforms, may result in a sudden or prolonged increase or decrease in the reported LIBOR rates and the value of LIBOR-based loans and securities, including those of other issuers we or our funds currently own or may in the future own. It remains uncertain how such changes would be implemented and the effects such changes would have on us, issuers of instruments in which we invest and financial markets generally.
The expected discontinuation of LIBOR could have a significant impact on our business. The dollar amount of our outstanding debt investments and borrowings that are linked to LIBOR with maturity dates after the anticipated discontinuation date of 2021 is material. We anticipate significant operational challenges for the transition away from LIBOR including, but not limited to, amending existing loan agreements with borrowers on investments that may have not been modified with fallback language and adding effective fallback language to new agreements in the event that LIBOR is discontinued before maturity. Beyond these challenges, we anticipate there may be additional risks to our current processes and information systems that will need to be identified and evaluated by us. Due to the uncertainty of the replacement for LIBOR, the potential effect of any such event on our cost of capital and net investment income cannot yet be determined. In addition, any further changes or reforms to the determination or supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on the market value of any LIBOR-linked securities, loans, and other financial obligations or extensions of credit held by or due to us and could have a material adverse effect on our business, financial condition and results of operations.

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Investments
Our investment objective is to generate current income and capital appreciation. We invest primarily in various forms of debt investments, including secured and unsecured debt, loan investments, and/or equity in private middle-market companies. We may also invest in the securities of public companies and in structured products and other investments such as collateralized loan obligations (“CLOs”) and credit-linked notes (“CLNs”). Our portfolio is comprised primarily of investments in debt, including secured and unsecured debt of private middle-market companies that, in the case of senior secured loans, generally are not broadly syndicated and whose aggregate tranche size is typically less than $250 million. Our portfolio also includes equity interests such as common stock, preferred stock, warrants or options.
Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to middle-market companies, the level of merger and acquisition activity for such companies, the general economic environment, the competitive environment for the types of investments we make and, more recently, market disruptions due to COVID-19. As a BDC, we must not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). As of March 31, 2021, non-qualifying assets represented approximately 16.0% of the total assets of the Company.
Revenue
We generate revenue primarily in the form of interest and dividend income from the securities we hold and capital gains, if any, on investment securities that we may acquire in portfolio companies. Our debt investments, whether in the form of mezzanine or senior secured loans, generally have a stated term of five to ten years and bear interest at a fixed rate or a floating rate usually determined on the basis of a benchmark, such as the London Interbank Offered Rate (“LIBOR”), the Euro Interbank Offered Rate (“EURIBOR”), the federal funds rate, or the prime rate. Interest on debt securities is generally payable quarterly or semiannually and while U.S. subordinated debt and corporate notes typically accrue interest at fixed rates, some of our investments may include zero coupon and/or step-up bonds that accrue income on a constant yield to call or maturity basis. In addition, some of our investments provide for payment-in-kind (“PIK”) interest or dividends. Such amounts of accrued PIK interest or dividends are added to the cost of the investment on the respective capitalization dates and generally become due at maturity of the investment or upon the investment being called by the issuer. We may also generate revenue in the form of commitment, origination, structuring fees, fees for providing managerial assistance and, if applicable, consulting fees, etc.
Expenses
For all investment professionals of AIM and their staff, when and to the extent engaged in providing investment advisory and management services to us, the compensation and routine overhead expenses of that personnel which is allocable to those services are provided and paid for by AIM. We bear all other costs and expenses of our operations and transactions, including those relating to:
investment advisory and management fees;
expenses incurred by AIM payable to third parties, including agents, consultants or other advisors, in monitoring our financial and legal affairs and in monitoring our investments and performing due diligence on our prospective portfolio companies;
calculation of our net asset value (including the cost and expenses of any independent valuation firm);
direct costs and expenses of administration, including independent registered public accounting and legal costs;
costs of preparing and filing reports or other documents with the SEC;
interest payable on debt, if any, incurred to finance our investments;
offerings of our common stock and other securities;
registration and listing fees;
fees payable to third parties, including agents, consultants or other advisors, relating to, or associated with, evaluating and making investments;
transfer agent and custodial fees;
taxes;
independent directors’ fees and expenses;
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marketing and distribution-related expenses;
the costs of any reports, proxy statements or other notices to stockholders, including printing and postage costs;
our allocable portion of the fidelity bond, directors and officers/errors and omissions liability insurance, and any other insurance premiums;
organizational costs; and
all other expenses incurred by us or the Administrator in connection with administering our business, such as our allocable portion of overhead under the administration agreement, including rent and our allocable portion of the cost of our Chief Financial Officer, Chief Legal Officer and Chief Compliance Officer and their respective staffs.
We expect our general and administrative operating expenses related to our ongoing operations to increase moderately in dollar terms. During periods of asset growth, we generally expect our general and administrative operating expenses to decline as a percentage of our total assets and increase during periods of asset declines. Incentive fees, interest expense and costs relating to future offerings of securities, among others, may also increase or reduce overall operating expenses based on portfolio performance, interest rate benchmarks, and offerings of our securities relative to comparative periods, among other factors.
Portfolio and Investment Activity
Our portfolio and investment activity during the years ended March 31, 2021 and March 31, 2020 was as follows:
Year Ended March 31,
(in millions)*20212020
Investments made in portfolio companies$617.1 $1,866.3 
Investments sold(101.1)(167.1)
Net activity before repaid investments516.0 1,699.1 
Investments repaid(896.9)(1,098.5)
Net investment activity$(380.8)$600.6 
Portfolio companies at beginning of period152 113 
Number of new portfolio companies14 60 
Number of exited portfolio companies(31)(21)
Portfolio companies at end of period135 152 
Number of investments made in existing portfolio companies75 87 
____________________
*Totals may not foot due to rounding.

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Our portfolio composition and weighted average yields as of March 31, 2021 and March 31, 2020 were as follows:
March 31, 2021March 31, 2020
Portfolio composition, at fair value:
First lien secured debt78 %81 %
Second lien secured debt10 %13 %
   Total secured debt88 %94 %
Unsecured debt%— 
Structured products and other%%
Preferred equity%%
Common equity/interests and warrants10 %%
Weighted average yields, at amortized cost (1):
First lien secured debt (2)7.8 %8.5 %
Second lien secured debt (2)9.9 %10.2 %
Secured debt portfolio (2)8.0 %8.7 %
Unsecured debt portfolio (2)5.3 %— 
Total debt portfolio (2)8.0 %8.7 %
Total portfolio (3)6.5 %8.0 %
Interest rate type, at fair value (4):
Fixed rate amount — — 
Floating rate amount$1.9  billion$2.2  billion
Fixed rate, as percentage of total— — 
Floating rate, as percentage of total 100 %100 %
Interest rate type, at amortized cost (4):
Fixed rate amount— — 
Floating rate amount$1.9  billion$2.3  billion
Fixed rate, as percentage of total— — 
Floating rate, as percentage of total100 %100 %
____________________
(1)An investor’s yield may be lower than the portfolio yield due to sales loads and other expenses.
(2)Exclusive of investments on non-accrual status.
(3)Inclusive of all income generating investments, non-income generating investments and investments on non-accrual status.
(4)The interest rate type information is calculated using the Company’s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status.
Since the initial public offering of Apollo Investment in April 2004 and through March 31, 2021, invested capital totaled $21.9 billion in 552 portfolio companies. Over the same period, Apollo Investment completed transactions with more than 100 different financial sponsors.
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Critical Accounting Policies
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, gains and losses. Changes in the economic environment, financial markets, credit worthiness of portfolio companies and any other parameters used in determining such estimates could cause actual results to differ materially. In addition to the discussion below, our critical accounting policies are further described in the notes to the financial statements.
Fair Value Measurements
The Company follows guidance in ASC 820, Fair Value Measurement (“ASC 820”), where fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are determined within a framework that establishes a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the information available. The inputs or methodology used for valuing assets or liabilities may not be an indication of the risks associated with investing in those assets or liabilities.
ASC 820 classifies the inputs used to measure these fair values into the following hierarchy:
Level 1: Quoted prices in active markets for identical assets or liabilities, accessible by us at the measurement date.
Level 2: Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.
Level 3: Unobservable inputs for the asset or liability.
In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each investment. The level assigned to the investment valuations may not be indicative of the risk or liquidity associated with investing in such investments. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may differ materially from the values that would be received upon an actual disposition of such investments.
As of March 31, 2021, $2.45 billion or 100.0% of the Company’s investments were classified as Level 3. The high proportion of Level 3 investments relative to our total investments is directly related to our investment philosophy and target portfolio, which consists primarily of long-term secured debt, as well as unsecured and mezzanine positions of private middle-market companies. A fundamental difference exists between our investments and those of comparable publicly traded fixed income investments, namely high-yield bonds, and this difference affects the valuation of our private investments relative to comparable publicly traded instruments.
Senior secured loans, or senior loans, are higher in the capital structure than high-yield bonds, and are typically secured by assets of the borrowing company. This improves their recovery prospects in the event of default and affords senior loans a structural advantage over high-yield bonds. Many of the Company’s investments are also privately negotiated and contain covenant protections that limit the issuer to take actions that could harm us as a creditor. High-yield bonds typically do not contain such covenants.
Given the structural advantages of capital seniority and covenant protection, the valuation of our private debt portfolio is driven more by investment specific credit factors than movements in the broader debt capital markets. Each security is evaluated individually and as indicated below, we value our private investments based upon a multi-step valuation process, including valuation recommendations from independent valuation firms.
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Investment Valuation Process
Under procedures established by our Board of Directors, we value investments, including certain secured debt, unsecured debt, and other debt securities with maturities greater than 60 days, for which market quotations are readily available, at such market quotations (unless they are deemed not to represent fair value). We attempt to obtain market quotations from at least two brokers or dealers (if available, otherwise from a principal market maker, primary market dealer or other independent pricing service). We utilize mid-market pricing as a practical expedient for fair value unless a different point within the range is more representative. If and when market quotations are deemed not to represent fair value, we typically utilize independent third party valuation firms to assist us in determining fair value. Accordingly, such investments go through our multi-step valuation process as described below. In each case, our independent valuation firms consider observable market inputs together with significant unobservable inputs in arriving at their valuation recommendations for such investments. Investments purchased within the quarter before the valuation date and debt investments with remaining maturities of 60 days or less may each be valued at cost with interest accrued or discount accreted/premium amortized to the date of maturity (although they are typically valued at available market quotations), unless such valuation, in the judgment of our Investment Adviser, does not represent fair value. In this case, such investments shall be valued at fair value as determined in good faith by or under the direction of our Board of Directors, including using market quotations where available. Investments that are not publicly traded or whose market quotations are not readily available are valued at fair value as determined in good faith by or under the direction of our Board of Directors. Such determination of fair values may involve subjective judgments and estimates.
With respect to investments for which market quotations are not readily available or when such market quotations are deemed not to represent fair value, our Board of Directors has approved a multi-step valuation process each quarter, as described below:
1.Our quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of our Investment Adviser who are responsible for the portfolio investment.
2.Preliminary valuation conclusions are then documented and discussed with senior management of our Investment Adviser.
3.Independent valuation firms are engaged by our Board of Directors to conduct independent appraisals by reviewing our Investment Adviser’s preliminary valuations and then making their own independent assessment.
4.The Audit Committee of the Board of Directors reviews the preliminary valuation of our Investment Adviser and the valuation prepared by the independent valuation firms and responds, if warranted, to the valuation recommendation of the independent valuation firms.
5.The Board of Directors discusses valuations and determines in good faith the fair value of each investment in our portfolio based on the input of our Investment Adviser, the applicable independent valuation firm, and the Audit Committee of the Board of Directors.
6.For Level 3 investments entered into within the current quarter, the cost (purchase price adjusted for accreted original issue discount/amortized premium) or any recent comparable trade activity on the security investment shall be considered to reasonably approximate the fair value of the investment, provided that no material change has since occurred in the issuer’s business, significant inputs or the relevant environment.
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Investments determined by these valuation procedures which have a fair value of less than $1 million during the prior fiscal quarter may be valued based on inputs identified by the Investment Adviser without the necessity of obtaining valuation from an independent valuation firm, if once annually an independent valuation firm using the procedures described herein provides a valuation. Investments in all asset classes are valued utilizing a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that we may take into account in fair value pricing our investments include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, seniority of investment in the investee company’s capital structure, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, our principal market (as the reporting entity) and enterprise values, among other factors. When readily available, broker quotations and/or quotations provided by pricing services are considered in the valuation process of independent valuation firms. During the year ended March 31, 2021, there were no significant changes to the Company’s valuation techniques and related inputs considered in the valuation process.
Investment Income Recognition
The Company records interest and dividend income, adjusted for amortization of premium and accretion of discount, on an accrual basis. Some of our loans and other investments, including certain preferred equity investments, may have contractual PIK interest or dividends. PIK income computed at the contractual rate is accrued into income and reflected as receivable up to the capitalization date. Certain PIK investments offer issuers the option at each payment date of making payments in cash or in additional securities. When additional securities are received, they typically have the same terms, including maturity dates and interest rates as the original securities issued. On these payment dates, the Company capitalizes the accrued interest or dividends receivable (reflecting such amounts as the basis in the additional securities received). PIK generally becomes due at maturity of the investment or upon the investment being called by the issuer. At the point the Company believes PIK is not expected to be realized, the PIK investment will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest or dividends are reversed from the related receivable through interest or dividend income, respectively. The Company does not reverse previously capitalized PIK interest or dividends. Upon capitalization, PIK is subject to the fair value estimates associated with their related investments. PIK investments on non-accrual status are restored to accrual status if the Company believes that PIK is expected to be realized.
Investments that are expected to pay regularly scheduled interest and/or dividends in cash are generally placed on non-accrual status when principal or interest/dividend cash payments are past due 30 days or more and/or when it is no longer probable that principal or interest/dividend cash payments will be collected. Such non-accrual investments are restored to accrual status if past due principal and interest or dividends are paid in cash, and in management’s judgment, are likely to continue timely payment of their remaining interest or dividend obligations. Interest or dividend cash payments received on non-accrual designated investments may be recognized as income or applied to principal depending upon management’s judgment.
Loan origination fees, original issue discount (“OID”), and market discounts are capitalized and accreted into interest income over the respective terms of the applicable loans using the effective interest method or straight-line, as applicable. Upon the prepayment of a loan, prepayment premiums, any unamortized loan origination fees, OID, or market discounts are recorded as interest income. Other income generally includes amendment fees, administrative fees, management fees, bridge fees, and structuring fees which are recorded when earned.
The Company records as dividend income the accretable yield from its beneficial interests in structured products such as CLOs based upon a number of cash flow assumptions that are subject to uncertainties and contingencies. Such assumptions include the rate and timing of principal and interest receipts (which may be subject to prepayments and defaults) of the underlying pools of assets. These assumptions are updated on at least a quarterly basis to reflect changes related to a particular security, actual historical data, and market changes. A structured product investment typically has an underlying pool of assets. Payments on structured product investments are payable solely from the cash flows from such assets. As such, any unforeseen event in these underlying pools of assets might impact the expected recovery and future accrual of income.
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Expenses
Expenses include management fees, performance-based incentive fees, interest expense, insurance expenses, administrative service fees, legal fees, directors’ fees, audit and tax service expenses, third-party valuation fees and other general and administrative expenses. Expenses are recognized on an accrual basis.
Net Realized Gains (Losses) and Net Change in Unrealized Gains (Losses)
We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized gains or losses previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized gain (loss) reflects the net change in portfolio investment values during the reporting period, including the reversal of previously recorded unrealized gains or losses.
Within the context of these critical accounting policies, we are not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported.
Results of Operations
For information regarding results of operations for the year ended March 31, 2019, see the Company's Form 10-K for the fiscal year ended March 31, 2020.

Operating results for the years ended March 31, 2021 and 2020 were as follows:
Year Ended March 31,
(in millions)*20212020
Investment Income



Interest income (excluding Payment-in-kind (“PIK”) interest income)$204.0 $249.6 
Dividend income3.8 8.8 
PIK interest income6.5 10.9 
Other income2.5 7.6 
Total investment income$216.7 $276.9 
Expenses
Management and performance-based incentive fees, net of amounts waived$36.4 $42.3 
Interest and other debt expenses, net of reimbursements55.4 73.3 
Administrative services expense, net of reimbursements4.5 6.0 
Other general and administrative expenses10.5 10.0 
Net Expenses$106.7 $131.6 
Net Investment Income$110.0 $145.3 
Net Realized and Change in Unrealized Gains (Losses)



Net realized gains (losses)$(21.5)$(6.3)
Net change in unrealized gains (losses)23.3 (255.0)
Net Realized and Change in Unrealized Gains (Losses)$1.8 $(261.3)
Net Increase (Decrease) in Net Assets Resulting from Operations$111.9 $(116.0)
Net Investment Income on Per Average Share Basis (1)$1.69 $2.16 
Earnings per share — basic (1)$1.71 $(1.73)
____________________
*Totals may not foot due to rounding.
(1)Based on the weighted average number of shares outstanding for the period presented.

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Total Investment Income
For the year ended March 31, 2021 as compared to the year ended March 31, 2020
The decrease in total investment income of $60.2 million for the year ended March 31, 2021 compared to the year ended March 31, 2020 was primarily driven by the decrease in total interest income (including PIK) of $50.0 million. The decrease in total interest income (including PIK) was due to a decrease in the average yield for the total debt portfolio, from 9.4% for the year ended March 31, 2020 to 8.4% for the year ended March 31, 2021, and a lower income-bearing investment portfolio. Furthermore, there was a decrease in prepayment fees and income recognized from the acceleration of discount, premium, or deferred fees on repaid investments, from $9.2 million for the year ended March 31, 2020 to $7.9 million for the year ended March 31, 2021. The decrease in dividend income of $5.0 million was due to a decrease in dividends received from Merx Aviation Finance, LLC, which totaled $2.5 million for the year ended March 31, 2020 compared to $0.0 million for year ended March 31, 2021, and MSEA Tankers LLC, which totaled $4.7 million for the year ended March 31, 2020 compared to $1.7 million for year ended March 31, 2021. Furthermore, there was a decrease in other income of $5.1 million primarily due to lower bridge and syndication fees.
Net Expenses
For the year ended March 31, 2021 as compared to the year ended March 31, 2020
The decrease in net expenses of $24.9 million for the year ended March 31, 2021 compared to the year ended March 31, 2020 was primarily due to the decrease in interest and other debt expenses of $17.9 million. The decrease of interest and other debt expenses was due to the change in net leverage, from 1.71x for the year ended March 31, 2020 to 1.36x for the year ended March 31, 2021, and a decrease in the weighted average interest cost, from 4.42% for the year ended March 31, 2020 to 3.04% for the year ended March 31, 2021. The decrease in management and performance-based incentive fees (net of amounts waived) of $5.9 million was due to a decrease in the investment portfolio and an incentive fee cap for fees paid in prior periods. Furthermore, there was an increase of $0.5 million in other general and administrative expenses, which was primarily due to an increase in valuation fees.
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Net Realized Gains (Losses)
During the year ended March 31, 2021, we recognized gross realized gains of $7.7 million and gross realized losses of $29.2 million, resulting in net realized losses of $21.5 million. Significant realized gains (losses) for the year ended March 31, 2021 are summarized below:
(in millions)Net Realized Gain (Loss)
AMP Solar Group, Inc.$4.2 
PIB Group2.1 
KLO Holdings, LLC(8.5)
ZPower, LLC(6.1)
Garden Fresh(2.5)
Learfield Communications(1.9)
Accelerate Parent Corp. (American Tire)(1.7)
FiscalNote(1.4)
During the year ended March 31, 2020, we recognized gross realized gains of $18.2 million and gross realized losses of $24.5 million, resulting in net realized losses of $6.3 million. Significant realized gains (losses) for the year ended March 31, 2020 are summarized below:
(in millions)Net Realized Gain (Loss)
Asset Repackaging Trust Six B.V. (Israel Electric)$7.0 
Renew Financial LLC (f/k/a Renewable Funding, LLC)2.8 
SquareTwo (CA Holdings, Collect America, Ltd.)1.2 
NFA Group1.0 
Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC)(9.0)
Crowne Automotive(6.4)
Solarplicity Group Limited (f/k/a AMP Solar UK)(4.7)

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Net Change in Unrealized Gains (Losses)
During the year ended March 31, 2021, we recognized gross unrealized gains of $101.8 million and gross unrealized losses of $78.4 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized gains of $23.3 million. Additional significant changes in unrealized gains (losses) for the year ended March 31, 2021 are summarized below:
(in millions)Net Change in Unrealized Gain (Loss)
KLO Holdings, LLC$11.9 
NFA Group5.4 
ZPower, LLC4.8 
MYCOM4.1 
CARE Fertility3.4 
ChyronHego Corporation3.3 
CT Technologies Intermediate Holdings, Inc3.0 
Lanai Holdings III, Inc. (Patterson Medical)2.4 
Mannkind Corporation2.4 
McLarens2.4 
Spotted Hawk(11.6)
Dynamic Product Tankers (Prime), LLC(11.1)
Merx Aviation Finance, LLC(8.7)
Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC)(8.6)
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.)(6.6)
Ambrosia Buyer Corp.(4.4)
Paper Source(2.5)
Renew Financial LLC (f/k/a Renewable Funding, LLC)(2.0)
AVAD, LLC(1.7)
Sequential Brands Group, Inc.(1.6)

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During the year ended March 31, 2020, we recognized gross unrealized gains of $16.6 million and gross unrealized losses of $271.7 million, including the impact of transferring unrealized to realized gains (losses), resulting in net change in unrealized losses of $255.0 million. Additional significant changes in unrealized gains (losses) for the year ended March 31, 2020 are summarized below:
(in millions)Net Change in Unrealized Gain (Loss)
Crowne Automotive$6.8 
AMP Solar Group, Inc.2.5 
Sprint Industrial Holdings, LLC.2.2 
BioClinica Holding I, LP1.1 
Spotted Hawk(63.2)
Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC)(32.4)
Merx Aviation Finance, LLC(25.8)
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.)(25.6)
Renew Financial LLC (f/k/a Renewable Funding, LLC)(15.6)
KLO Holdings, LLC(10.7)
MYCOM(7.0)
Asset Repackaging Trust Six B.V. (Israel Electric)(6.2)
ZPower, LLC(4.7)
Solarplicity Group Limited (f/k/a AMP Solar UK)(4.7)
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Liquidity and Capital Resources
The Company’s liquidity and capital resources are generated and generally available through periodic follow-on equity and debt offerings, our Senior Secured Facility (as defined in Note 8 to the financial statements), our senior secured notes, our senior unsecured notes, investments in special purpose entities in which we hold and finance particular investments on a non-recourse basis, as well as from cash flows from operations, investment sales of liquid assets and repayments of senior and subordinated loans and income earned from investments. For liquidity and capital resources information for the year ended March 31, 2019, see the Company's Form 10-K for the fiscal year ended March 31, 2020.
We believe that our current cash and cash equivalents on hand, our short-term investments, proceeds from the sale of our 2025 Notes, our available borrowing capacity under our Senior Secured Facility and our anticipated cash flows from operations will be adequate to meet our cash needs for our daily operations for at least the next twelve months. This "Liquidity and Capital Resources" section should be read in conjunction with "Our Response to COVID-19" above.
Cash Equivalents
The Company defines cash equivalents as securities that are readily convertible into known amounts of cash and near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only securities with a maturity of three months or less from the date of purchase would qualify, with limited exceptions. The Company deems that certain money market funds, U.S. Treasury bills, repurchase agreements and other high-quality, short-term debt securities would qualify as cash equivalents (See Note 2 to the financial statements.) At the end of each fiscal quarter, we consider taking proactive steps utilizing cash equivalents with the objective of enhancing our investment flexibility during the following quarter, pursuant to Section 55 of the 1940 Act. More specifically, we may purchase U.S. Treasury bills from time-to-time on the last business day of the quarter and typically close out that position on the following business day, settling the sale transaction on a net cash basis with the purchase, subsequent to quarter end. Apollo Investment may also utilize repurchase agreements or other balance sheet transactions, including drawing down on our Senior Secured Facility, as we deem appropriate. The amount of these transactions or such drawn cash for this purpose is excluded from total assets for purposes of computing the asset base upon which the management fee is determined.
Debt
See Note 8 to the financial statements for information on the Company’s debt.
The following table shows the contractual maturities of our debt obligations as of March 31, 2021:
Payments Due by Period
(in millions)TotalLess than 1 Year1 to 3 Years3 to 5 YearsMore than 5 Years
Senior Secured Facility (1)$1,119.2 $— $— $1,119.2 $— 
2025 Notes350.0 — — 350.0 — 
Total Debt Obligations$1,469.2 $— $— $1,469.2 $— 
____________________
(1)As of March 31, 2021, aggregate lender commitments under the Senior Secured Facility totaled $1.81 billion and have $690.6 million of unused capacity. As of March 31, 2021, there were $0.2 million of letters of credit issued under the Senior Secured Facility as shown as part of total commitments in Note 10 to the financial statements.
Stockholders’ Equity
See Note 9 to the financial statements for information on the Company’s public offerings and share repurchase plans.
Distributions
Distributions paid to stockholders during the years ended March 31, 2021 and 2020 totaled $105.7 million ($1.62 per share) and $121.8 million ($1.80 per share), respectively. For income tax purposes, distributions made to stockholders are reported as ordinary income, capital gains, non-taxable return of capital, or a combination thereof. Although the tax character of distributions paid to stockholders through March 31, 2021 may include return of capital, the exact amount cannot be determined at this point. The final determination of the tax character of distributions will not be made until we file our tax return for the tax year ended March 31, 2021. Tax characteristics of all distributions will be reported to stockholders on Form 1099 after the end of the calendar year. Our quarterly distributions, if any, will be determined by our Board of Directors.
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To maintain our RIC status, we must distribute at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, at least annually, out of the assets legally available for distribution. Although we currently intend to distribute realized net capital gains (i.e., net long-term capital gains in excess of short-term capital losses), if any, at least annually, out of the assets legally available for such distributions, we may in the future decide to retain such capital gains for investment. Currently, we have substantial net capital loss carryforwards and consequently do not expect to generate cumulative net capital gains in the foreseeable future.
We maintain an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a dividend, then stockholders’ cash dividends will be automatically reinvested in additional shares of our common stock, unless they specifically “opt out” of the dividend reinvestment plan so as to receive cash dividends.
We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. In addition, due to the asset coverage test applicable to us as a BDC, we may in the future be limited in our ability to make distributions. Also, our revolving credit facility may limit our ability to declare dividends if we default under certain provisions or fail to satisfy certain other conditions. If we do not distribute a certain percentage of our income annually, we may suffer adverse tax consequences, including possible loss of the tax benefits available to us as a RIC. In addition, in accordance with GAAP and tax regulations, we include in income certain amounts that we have not yet received in cash, such as contractual PIK, which represents contractual interest added to the loan balance that becomes due at the end of the loan term, or the accrual of original issue or market discount. Since we may recognize income before or without receiving cash representing such income, we may not be able to meet the requirement to distribute at least 90% of our investment company taxable income to obtain tax benefits as a RIC.
With respect to the distributions to stockholders, income from origination, structuring, closing, commitment and other upfront fees associated with investments in portfolio companies is treated as taxable income and accordingly, distributed to stockholders.
PIK Income
For the years ended March 31, 2021 and 2020, PIK income totaled $6.5 million and $10.9 million on total investment income of $216.7 million and $276.9 million, respectively. In order to maintain the Company’s status as a RIC, this non-cash source of income must be paid out to stockholders annually in the form of distributions, even though the Company has not yet collected the cash. See Note 5 to the financial statements for more information on the Company’s PIK income.
Related Party Transactions
See Note 3 to the financial statements for information on the Company’s related party transactions.







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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are subject to financial market risks, including changes in interest rates and the valuations of our investment portfolio. Uncertainty with respect to the economic effects of the COVID-19 outbreak has introduced significant volatility in the financial markets, and the effects of this volatility could materially impact our market risks, including those listed below. For additional information concerning the COVID-19 pandemic and its potential impact on our business and our operating results, see Part II - Other information, Item 1A. Risk Factors.
Investment valuation risk
Because there is not a readily available market value for most of the investments in our portfolio, we value substantially all of our portfolio investments at fair value as determined in good faith by our board of directors based on, among other things, the input of our management and audit committee and independent valuation firms that have been engaged at the direction of our board of directors to assist in the valuation of each portfolio investment without a readily available market quotation (with certain de minimis exceptions). Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of our investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that we may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which we have recorded it. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the valuations currently assigned. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” and “—Fair Value Measurements” as well as Notes 2 and 5 to our financial statements for the year ended March 31, 2021, for more information relating to our investment valuation.
Interest Rate Risk
Interest rate sensitivity refers to the change in our earnings that may result from changes in the level of interest rates. Because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.

As of March 31, 2021, all of our debt portfolio investments bore interest at variable rates, which generally are LIBOR-based (or based on an equivalent applicable currency rate) and typically have durations of one to six months after which they reset to current market interest rates, and many of which are subject to certain floors. Further, our Senior Secured Facility bears interest at LIBOR rates with no interest rate floors, while the 2025 Notes bears interest at a fixed rate. On July 27, 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. Potential changes, or uncertainty related to such potential changes, may adversely affect the market for LIBOR-based securities, including our portfolio of LIBOR-indexed, floating-rate debt securities, or the cost of our borrowings. Please see Part II - Other information, Item 1A. Risk Factors, “The interest rates of some of our floating-rate loans to our portfolio companies may be priced using a spread over LIBOR, which may be phased out in the future”.

We regularly measure our exposure to interest rate risk. We assess interest rate risk and manage our interest rate exposure on an ongoing basis by comparing our interest rate sensitive assets to our interest rate sensitive liabilities. Based on that review, we determine whether or not any hedging transactions are necessary to mitigate exposure to changes in interest rates.


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The following table shows the estimated annual impact on net investment income of base rate changes in interest rates (considering interest rate flows for variable rate instruments) to our loan portfolio and outstanding debt as of March 31, 2021, assuming no changes in our investment and borrowing structure:
Basis Point Change
Net Investment IncomeNet Investment Income Per Share
 Up 200 basis points $0.8  million$0.012 
 Up 100 basis points (5.0) million(0.077)
 Up 50 basis points (3.9) million(0.059)
 Down 25 basis points 0.4  million0.006 
We may hedge against interest rate fluctuations from time-to-time by using standard hedging instruments such as futures, options and forward contracts subject to the requirements of the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of lower interest rates with respect to our portfolio of investments.
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Item 8. Financial Statements and Supplementary Data
Index to Financial Statements
84


Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, and for performing an assessment of the effectiveness of internal control over financial reporting as of March 31, 2021. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Management performed an assessment of the effectiveness of the Company’s internal control over financial reporting as of March 31, 2021 based upon criteria in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on our assessment, management determined that the Company’s internal control over financial reporting was effective as of March 31, 2021 based on the criteria on Internal Control — Integrated Framework issued by COSO.
The effectiveness of the Company’s internal control over financial reporting as of March 31, 2021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.
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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Apollo Investment Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Apollo Investment Corporation (the “Company”) as of March 31, 2021 and 2020, and the related statements of operations, changes in net assets and cash flows for each of the three years in the period ended March 31, 2021, including the related notes (collectively referred to as the “financial statements”). We also have audited the Company's internal control over financial reporting as of March 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2021 and 2020, and the results of its operations, changes in its net assets and its cash flows for each of the three years in the period ended March 31, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
We have also previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the statements of assets and liabilities, including the schedules of investments, as of March 31, 2019, 2018, 2017, 2016, 2015, 2014, 2013 and 2012, and the related statements of operations, changes in net assets and cash flows for the years ended March 31, 2019, 2018, 2017, 2016, 2015, 2014, 2013 and 2012 (none of which are presented herein), and we expressed unqualified opinions on those financial statements. In our opinion, the information set forth in the senior securities table of the Company for each of the ten years in the period ended March 31, 2021, appearing on pages 62-64, is fairly stated, in all material respects, in relation to the financial statements from which it has been derived.
Basis for Opinions
The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on the Company’s financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2021 and 2020 by correspondence with the custodian, administrative agents and portfolio companies. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

86


Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Valuation of Level 3 Investments
As described in Notes 2 and 5 to the financial statements, level 3 investments represent 100% of the $2,449 million of investments held as of March 31, 2021. Management values its level 3 investments through a multi-step valuation process. As a part of that multi-step valuation process, the Board of Directors and the Audit Committee of the Board of Directors review the valuation models and assumptions prepared by the investment professionals of the Company’s investment advisor and valuations prepared by independent third-party valuation firms. The Company’s level 3 investments are valued using market quotations when readily available, if and when market quotations are unavailable or deemed not representative of fair value, the level 3 investments are valued using a market approach, an income approach, or both approaches, as determined to be appropriate by management. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) discounted to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that management may take into account in fair value pricing investments include observable market inputs together with significant unobservable inputs, including relevant comparable company multiples, discount rates, residual values, commodity prices, expected volatility, recoverable amounts, recent transactions, sales proceeds, transaction prices and implied illiquidity discounts.
The principal considerations for our determination that performing procedures relating to the valuation of level 3 investments is a critical audit matter are the significant judgment by management to determine the fair value of these level 3 investments, which included significant unobservable inputs related to comparable company multiples, discount rates and residual values. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing audit procedures and evaluating the audit evidence obtained related to the comparable company multiples, discount rates and residual values. In addition, the audit effort involved the use of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained.

87


Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included testing the effectiveness of controls relating to the valuation of level 3 investments, including controls over the Company’s methods, data and significant unobservable inputs. These procedures also included, among others, testing the completeness, accuracy, reliability, and relevance of key data and calculations used in the models and the involvement of professionals with specialized skill and knowledge to assist in either (i) testing management’s process, which entails evaluating the appropriateness of the methodology applied by management and the reasonableness of significant unobservable inputs used in the methodology, specifically comparable company multiples, discount rates, and residual values for certain investments, as applicable; or (ii) developing an independent fair value range for the investments, and comparison of the fair value range to the fair value estimates prepared by management for certain investments.
/s/ PricewaterhouseCoopers LLP

New York, New York
May 20, 2021

We have served as the Company’s auditor since 2004.
88



APOLLO INVESTMENT CORPORATION
STATEMENTS OF ASSETS AND LIABILITIES
(In thousands, except share and per share data)
March 31, 2021March 31, 2020
Assets
Investments at fair value:
Non-controlled/non-affiliated investments (cost — $1,871,073 and $2,298,548, respectively)$1,844,627 $2,191,327 
Non-controlled/affiliated investments (cost — $133,428 and $135,346, respectively)50,874 60,241 
Controlled investments (cost — $711,898 and $655,719, respectively)553,650 533,865 
Cash and cash equivalents50,180 37,301 
Foreign currencies (cost — $4,462 and $6,369, respectively)
4,444 6,375 
Receivable for investments sold1,351 978 
Interest receivable13,135 19,151 
Dividends receivable3,793 5,034 
Deferred financing costs21,528 16,054 
Prepaid expenses and other assets907 732 
Total Assets$2,544,489 $2,871,058 
Liabilities
Debt$1,465,371 $1,794,617 
Payable for investments purchased— — 
Distributions payable23,493 29,367 
Management and performance-based incentive fees payable8,666 10,289 
Interest payable2,096 2,887 
Accrued administrative services expense794 2,796 
Other liabilities and accrued expenses7,739 6,787 
Total Liabilities$1,508,159 $1,846,743 
Commitments and contingencies (Note 10)
Net Assets$1,036,330 $1,024,315 
Net Assets
Common stock, $0.001 par value (130,000,000 shares authorized; 65,259,176 and 65,259,176 shares issued and outstanding, respectively)
$65 $65 
Capital in excess of par value2,099,876 2,099,876 
Accumulated under-distributed (over-distributed) earnings(1,063,611)(1,075,626)
Net Assets$1,036,330 $1,024,315 
Net Asset Value Per Share$15.88 $15.70 
See notes to financial statements.
89


APOLLO INVESTMENT CORPORATION
STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Year Ended March 31,
202120202019
Investment Income
Non-controlled/non-affiliated investments:
Interest income (excluding Payment-in-kind (“PIK”) interest income)$178,277 $201,908 $164,186 
Dividend income753 331 
PIK interest income5,447 7,208 3,365 
Other income2,472 7,609 8,135 
Non-controlled/affiliated investments:
Interest income (excluding PIK interest income)118 484 — 
Dividend income1,308 1,286 1,198 
PIK interest income15 515 — 
Other income— — — 
Controlled investments:
Interest income (excluding PIK interest income)25,624 47,212 58,868 
Dividend income1,691 7,150 14,100 
PIK interest income1,044 3,213 5,220 
Other income— — — 
Total Investment Income$216,749 $276,916 $255,076 
Expenses
Management fees$36,434 $40,360 $35,733 
Performance-based incentive fees— 1,983 21,190 
Interest and other debt expenses55,416 73,398 58,319 
Administrative services expense4,765 6,335 6,772 
Other general and administrative expenses10,495 9,999 11,378 
Total expenses107,110 132,075 133,392 
Management and performance-based incentive fees waived— — (5,542)
Management fee offset rebate(25)— — 
Expense reimbursements(362)(433)(523)
Net Expenses$106,723 $131,642 $127,327 
Net Investment Income$110,026 $145,274 $127,749 
Net Realized and Change in Unrealized Gains (Losses)
Net realized gains (losses):
Non-controlled/non-affiliated investments$(13,113)$(6,028)$(22,109)
Non-controlled/affiliated investments(4,285)(731)2,007 
Controlled investments— — — 
Option contracts — — (29,995)
Foreign currency transactions(4,108)4,816 64 
Extinguishment of debt— (4,375)— 
Net realized gains (losses)(21,506)(6,318)(50,033)
Net change in unrealized gains (losses):
Non-controlled/non-affiliated investments69,431 (80,303)(5,454)
Non-controlled/affiliated investments3,894 (57,714)(12,403)
Controlled investments(36,393)(116,183)(11,571)
Option contracts— — 19,145 
Foreign currency translations(13,591)(820)4,513 
Net change in unrealized gains (losses)23,341 (255,020)(5,770)
Net Realized and Change in Unrealized Gains (Losses)$1,835 $(261,338)$(55,803)
Net Increase (Decrease) in Net Assets Resulting from Operations$111,861 $(116,064)$71,946 
Earnings (Loss) Per Share — Basic$1.71 $(1.73)$1.02 
See notes to financial statements.
90


APOLLO INVESTMENT CORPORATION
STATEMENTS OF CHANGES IN NET ASSETS
(In thousands, except share data)
Year Ended March 31,
202120202019
Operations
Net investment income$110,026 $145,274 $127,749 
Net realized gains (losses)(21,506)(6,318)(50,033)
Net change in unrealized gains (losses)23,341 (255,020)(5,770)
Net Increase (Decrease) in Net Assets Resulting from Operations$111,861 $(116,064)$71,946 
Distributions to Stockholders
Distribution of net investment income$(99,846)$(120,107)$(112,042)
Distribution of return of capital— — (14,533)
Net Increase (Decrease) in Net Assets Resulting from Distributions to Stockholders$(99,846)$(120,107)$(126,575)
Capital Share Transactions
Repurchase of common stock$— $(52,141)$(50,830)
Net Increase (Decrease) in Net Assets Resulting from Capital Share Transactions$— $(52,141)$(50,830)
Net Assets
Net increase (decrease) in net assets during the period$12,015 $(288,312)$(105,459)
Net assets at beginning of period1,024,315 1,312,627 1,418,086 
Net Assets at End of Period$1,036,330 $1,024,315 $1,312,627 
Capital Share Activity
Shares repurchased during the period— (3,617,810)(3,227,046)
Shares issued and outstanding at beginning of period65,259,176 68,876,986 72,104,032 
Shares Issued and Outstanding at End of Period65,259,176 65,259,176 68,876,986 
See notes to financial statements.
91


APOLLO INVESTMENT CORPORATION
STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended March 31,
202120202019
Operating Activities
Net increase (decrease) in net assets resulting from operations$111,861 $(116,064)$71,946 
Net realized (gains) losses21,506 6,318 50,033 
Net change in unrealized (gains) losses(23,341)255,020 5,770 
Net amortization of premiums and accretion of discounts on investments(11,174)(9,458)(6,430)
Accretion of discount on notes593 595 593 
Amortization of deferred financing costs5,074 5,015 4,842 
Increase in gains/(losses) from foreign currency transactions(4,071)4,816 64 
PIK interest and dividends capitalized(6,774)(20,083)(6,412)
Changes in operating assets and liabilities:
Purchases of investments(617,096)(1,866,949)(1,319,211)
Proceeds from sales and repayments of investments990,451 1,256,910 1,083,139 
Purchases of option contracts— — — 
Proceeds from option contracts— — — 
Net settlement of option contracts— — (9,002)
Decrease (increase) in interest receivable6,040 5,110 (2,012)
Decrease (increase) in dividends receivable1,241 (1,286)(1,198)
Decrease (increase) in prepaid expenses and other assets(175)(396)83 
Increase (decrease) in management and performance-based incentive fees payable(1,623)1,409 (7,705)
Increase (decrease) in interest payable(791)(2,931)508 
Increase (decrease) in accrued administrative services expense(2,002)(187)476 
Increase (decrease) in other liabilities and accrued expenses952 (299)1,884 
Net Cash Used in/Provided by Operating Activities$470,671 $(482,460)$(132,632)
Financing Activities
Issuances of debt$185,481 $1,450,431 $973,250 
Payments of debt(529,290)(790,778)(631,000)
Financing costs paid and deferred(10,171)(844)(9,908)
Repurchase of common stock— (52,141)(50,830)
Distributions paid(105,720)(121,781)(127,980)
Net Cash Used in/Provided Financing Activities$(459,700)$484,887 $153,532 
Cash, Cash Equivalents, Foreign Currencies and Collateral on Option Contracts
Net increase (decrease) in cash, cash equivalents, foreign currencies and collateral on option contracts during the period$10,971 $2,427 $20,900 
Effect of foreign exchange rate changes on cash and cash equivalents(23)60 (60)
Cash, cash equivalents, foreign currencies and collateral on option contracts at beginning of period43,676 41,189 20,349 
Cash, Cash Equivalents, Foreign Currencies and Collateral on Option Contracts at the End of Period$54,624 $43,676 $41,189 
Supplemental Disclosure of Cash Flow Information
Cash interest paid$50,478 $70,748 $52,436 
Non-Cash Activity
PIK income$6,506 $10,936 $8,585 
See notes to financial statements.
92

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
Advertising, Printing & Publishing
FingerPaint Marketing
KL Charlie Acquisition CompanyFirst Lien Secured Debt7.25% (3M L+625, 1.00% Floor)12/30/26$18,653 $18,292 $18,467 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/30/262,190(29)(22)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded12/30/264,380(29)(44)(8)(9)
(21)(23)
KL Charlie Co-Invest, L.P.Common Equity - Common StockN/AN/A218,978 Shares219 239 (9)(13)
(25)
18,453 18,640 
Simplifi Holdings, Inc.
Simplifi Holdings, Inc.First Lien Secured Debt7.25% (6M L+625, 1.00% Floor)08/02/2538,44037,919 37,867 (9)
First Lien Secured Debt - Revolver8.50% (P+525)08/02/251,4401,440 1,418 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded08/02/25960(40)(14)(8)(9)
(21)(23)
39,319 39,271 
Total Advertising, Printing & Publishing$57,772 $57,911 
Aerospace & Defense
Erickson Inc
Erickson IncFirst Lien Secured Debt - Revolver9.00% (3M L+750, 1.50% Floor)04/28/22$30,469 $30,469 $30,012 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded04/28/224,091(101)(61)(8)(9)
(21)(23)
First Lien Secured Debt - Letters of Credit7.50%04/23/21 - 11/23/221,440— (21)(8)(9)
(23)
Total Aerospace & Defense$30,368 $29,930 
Automotive
Crowne Automotive
Vari-Form Group, LLCFirst Lien Secured Debt11.00% (7.00% Cash plus 4.00% PIK)02/02/23$5,860 $901 $293 (9)(14)
Vari-Form Inc.First Lien Secured Debt11.00% (7.00% Cash plus 4.00% PIK)02/02/232,110391 105 (9)(14)
1,292 398 
K&N Parent, Inc.
K&N Parent, Inc.Second Lien Secured Debt9.75% (3M L+875, 1.00% Floor)10/21/2423,76523,549 21,982 
Truck-Lite Co., LLC
TL Lighting Holdings, LLCCommon Equity - EquityN/AN/A350 Shares350 345 (9)(13)
Truck-Lite Co., LLCFirst Lien Secured Debt7.25% (3M L+625, 1.00% Floor)12/14/2628,58528,029 28,088 (9)
First Lien Secured Debt - Revolver7.25% (3M L+625, 1.00% Floor)12/13/241,5261,526 1,508 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/13/241,432(53)(17)(8)(9) (21)(23)
First Lien Secured Debt - Letters of Credit6.25%11/30/21 - 12/21/2194— (1)(8)(9) (23)
29,852 29,923 
Total Automotive$54,693 $52,303 
See notes to financial statements.
93

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
Aviation and Consumer Transport
Merx Aviation Finance, LLC
Merx Aviation Finance, LLC (5)First Lien Secured Debt - Revolver10.00%10/31/23$190,500 $190,500 $190,500 (23)
First Lien Secured Debt - Letter of Credit2.25%07/13/21177— — (23)
Common Equity - Membership InterestsN/AN/AN/A120,300 125,061 (25)
310,800 315,561 
Primeflight
PrimeFlight Aviation Services, Inc.First Lien Secured Debt6.50% (1M L+550, 1.00% Floor)05/09/2417,47817,229 17,088 (9)
Total Aviation and Consumer Transport$328,029 $332,649 
Beverage, Food & Tobacco
Bolthouse Farms
Wm. Bolthouse Farms, Inc.Common Equity - Common StockN/AN/A1,000,000 Shares$1,001 $1,070 (13)
Eagle Foods
Eagle Foods Family Group, LLCFirst Lien Secured Debt7.50% (3M L+650, 1.00% Floor)06/14/2423,45823,317 23,224 (9)
First Lien Secured Debt - Revolver7.50% (3M L+650, 1.00% Floor)06/14/23750750 742 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded06/14/233,000(19)(30)(8)(9)
(21)(23)
24,048 23,936 
Florida Food Products, Inc.
Florida Food Products, Inc.First Lien Secured Debt7.50% (3M L+650, 1.00% Floor)09/08/2522,70522,345 22,592 (9)
First Lien Secured Debt8.25% (3M L+725, 1.00% Floor)09/08/252,9772,795 2,977 (9)
Florida Food Products, LLCFirst Lien Secured Debt - Revolver7.50% (3M L+650, 1.00% Floor)09/06/23479479 477 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded09/06/231,233(21)(6)(8)(9)
(21)(23)
25,598 26,040 
Orgain, Inc.
Butterfly Fighter Co-Invest, L.P.Common Equity - Membership InterestsN/AN/A1,000,000 Shares1,005 1,275 (13)
TNT Crust LLC
TNT Crust LLCFirst Lien Secured Debt7.75% (3M L+675, 1.00% Floor)11/06/2320,47320,223 20,166 (9)
First Lien Secured Debt - Revolver7.75% (3M L+675, 1.00% Floor)11/06/23325325 320 (9)(23)
First Lien Secured Debt - Revolver7.75% (1M L+675, 1.00% Floor)11/06/23813813 801 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded11/06/232,114(36)(32)(8)(9)
(21)(23)
Common Equity - Series A UnitsN/AN/A244 Shares30 276 (9)(13)
21,355 21,531 
See notes to financial statements.
94

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
Turkey Hill
IC Holdings LLCCommon Equity - Series A UnitsN/AN/A169 Shares169 351 (9)(13)
THLP CO. LLCFirst Lien Secured Debt7.00% (12M L+600, 1.00% Floor)05/30/252,7872,763 2,759 (9)
First Lien Secured Debt8.25% (P+500)05/30/251(9)
First Lien Secured Debt7.00% (2M L+600, 1.00% Floor)05/30/2519,56219,290 19,366 (9)
First Lien Secured Debt - Revolver8.25% (P+500)05/31/242,3602,360 2,336 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded05/31/242,135(57)(21)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded05/30/252,809(39)(28)(8)(9)
(21)(23)
24,487 24,764 
Total Beverage, Food & Tobacco$97,494 $98,616 
Business Services
Access Information
Access CIG, LLCSecond Lien Secured Debt7.87% (1M L+775)02/27/26$15,900 $15,807 $15,709 
Ambrosia Buyer Corp.
Ambrosia Buyer Corp.Second Lien Secured Debt9.00%08/28/2521,42920,536 12,795 (14)
AML Rightsource
Gabriel Partners, LLCFirst Lien Secured Debt7.25% (6M L+625, 1.00% Floor)09/21/2610,1769,945 9,971 (9)
First Lien Secured Debt - Revolver7.25% (6M L+625, 1.00% Floor)09/21/26443443 435 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded09/21/26222(15)(4)(8)(9)
(21)(23)
10,373 10,402 
Claritas
Claritas, LLCFirst Lien Secured Debt7.00% (3M L+600, 1.00% Floor)12/21/233,7463,724 3,708 (9)
First Lien Secured Debt - Revolver7.00% (3M L+600, 1.00% Floor)12/21/23129129 128 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/21/23902(6)(9)(8)(9)
(21)(23)
3,847 3,827 
Continuum
Continuum Global Solutions, LLCFirst Lien Secured Debt - Revolver6.50% (1M L+550, 1.00% Floor)02/15/225,3175,317 5,224 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded02/15/2214,683(142)(257)(8)(9)
(21)(23)
Preferred Equity - Preferred EquityN/AN/A775 Shares78 78 (9)(13)
5,253 5,045 
Education Personnel
Arthur Bidco LimitedFirst Lien Secured Debt6.00% (1M GBPL+550, 0.50% Floor)08/31/24£4,035 5,162 5,309 (9)(17)
First Lien Secured Debt - Revolver6.00% (1M GBPL+550, 0.50% Floor)08/31/24£1,471 1,881 1,933 (9)(17)
(23)
7,043 7,242 
Electro Rent Corporation
Electro Rent CorporationSecond Lien Secured Debt10.00% (3M L+900, 1.00% Floor)01/31/2534,23533,672 33,722 (9)
See notes to financial statements.
95

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
Elo Touch
TGG TS Acquisition CompanyFirst Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/14/231,750— (33)(8)(21)
(23)
Ensemble Health
EHL Merger Sub, LLCFirst Lien Secured Debt - Unfunded Revolver0.25% Unfunded08/01/244,155(254)(140)(8)(21)
(23)
Jacent
Jacent Strategic MerchandisingFirst Lien Secured Debt6.75% (3M L+575, 1.00% Floor)04/23/2422,35222,146 21,896 (9)
First Lien Secured Debt - Revolver6.75% (3M L+575, 1.00% Floor)04/23/242,5672,567 2,514 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded04/23/24933(32)(19)(8)(9)
(21)(23)
Common Equity - Common StockN/AN/A5,000 Shares500 313 (9)(13)
JSM Equity Investors, L.P.Preferred Equity - Class P Partnership UnitsN/AN/A114 Shares11 11 (9)(13)
(25)
25,192 24,715 
Jones & Frank
JF Acquisition, LLCFirst Lien Secured Debt6.50% (12M L+550, 1.00% Floor)07/31/2413,13912,963 12,965 (9)
First Lien Secured Debt6.50% (3M L+550, 1.00% Floor)07/31/24169167 167 (9)
First Lien Secured Debt - Revolver6.50% (1M L+550, 1.00% Floor)07/31/24628628 619 (9)(23)
First Lien Secured Debt - Revolver6.50% (12M L+550, 1.00% Floor)07/31/24628628 619 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded07/31/24314(21)(4)(8)(9)
(21)(23)
14,365 14,366 
MAKS
Trident Bidco LimitedFirst Lien Secured Debt6.50% (6M L+550, 1.00% Floor)11/08/2534,56233,765 34,013 (9)(17)
McLarens
Margaux Acquisition Inc.First Lien Secured Debt6.75% (3M L+575, 1.00% Floor)12/19/2423,05422,766 22,876 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/19/241,601(20)(12)(8)(9)
(21)(23)
Margaux UK Finance LimitedFirst Lien Secured Debt6.75% (3M GBPL+575, 1.00% Floor)12/19/24£7,183 8,965 9,835 (9)(17)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/19/24£541 (8)(6)(8)(9)
(17)(21)(23)
31,703 32,693 
Naviga
Naviga Inc. (fka Newscycle Solutions, Inc.)First Lien Secured Debt8.00% (3M L+700, 1.00% Floor)12/29/2211,02410,910 10,914 (9)
First Lien Secured Debt - Revolver8.00% (1M L+700, 1.00% Floor)12/29/22240240 238 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/29/22260(4)(3)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded12/29/221,282(15)(13)(8)(9)
(21)(23)
11,131 11,136 
PSI Services, LLC
Lifelong Learner Holdings, LLCFirst Lien Secured Debt6.75% (3M L+575, 1.00% Floor)10/19/2632,53632,005 31,420 (9)
First Lien Secured Debt - Revolver6.75% (3M L+575, 1.00% Floor)10/20/251,0391,039 1,009 (9)(23)
See notes to financial statements.
96

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded10/20/251,946(45)(57)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded10/19/262,388(19)(82)(8)(9)
(21)(23)
32,980 32,290 
RA Outdoors, LLC (Active Outdoors)
RA Outdoors, LLCFirst Lien Secured Debt5.75% (6M L+475, 1.00% Floor)09/11/246,5256,461 6,460 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded09/09/221,200(7)— (9)(21)
(23)
Second Lien Secured Debt9.75% (6M L+875, 1.00% Floor)09/11/2531,95031,504 31,311 (9)
37,958 37,771 
Soliant
Soliant Health, Inc.Common Equity - Membership InterestsN/AN/A300 Shares300 374 (9)(13)
Soliant Holdings, LLCFirst Lien Secured Debt6.50% (1M L+550, 1.00% Floor)12/31/2616,27416,007 16,274 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/31/241,936(29)— (9)(21) (23)
16,278 16,648 
Transplace Holdings, Inc.
Transplace Holdings, Inc.Second Lien Secured Debt9.75% (3M L+875, 1.00% Floor)10/06/258,5998,476 8,513 
US Legal Support
US Legal Support Investment Holdings, LLCCommon Equity - Series A-1 UnitsN/AN/A631,972 Shares632 474 (9)(13)
USLS Acquisition, Inc.First Lien Secured Debt6.75% (3M L+575, 1.00% Floor)12/02/2424,25023,948 22,785 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/02/241,508(20)(93)(8)(9)
(21)(23)
First Lien Secured Debt - Letters of Credit5.75%05/23/21 - 12/31/21100— (6)(8)(9)
(23)
First Lien Secured Debt - Unfunded Delayed Draw0.50% Unfunded12/02/24670(7)(24)(8)(9)
(21)(23)
24,553 23,136 
Total Business Services$332,678 $323,850 
Chemicals, Plastics & Rubber
Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC)
Carbonfree Chemicals Holdings LLC (4)Common Equity - Common Equity / InterestN/AN/A2,288 Shares$45,391 $25,424 (13)(16)
(25)
Carbonfree Chemicals SA LLC (4)Common Equity - Class B UnitsN/AN/A3,152 Shares32,434 — (3)(13)
(16)(25)
77,825 25,424 
Niacet Corporation
Hare Bidco, Inc.Second Lien Secured Debt9.75% (1M E+875, 1.00% Floor)08/01/2411,351 12,165 13,307 
Westfall Technik, Inc.
Westfall Technik, Inc.First Lien Secured Debt7.25% (1M L+625, 1.00% Floor)09/13/2415,77715,588 15,355 (9)
First Lien Secured Debt - Revolver7.25% (1M L+625, 1.00% Floor)09/13/241,7501,750 1,702 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded09/13/24269(23)(7)(8)(9)
(21)(23)
17,315 17,050 
Total Chemicals, Plastics & Rubber$107,305 $55,781 
See notes to financial statements.
97

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
Construction & Building
Englert
Gutter Buyer, Inc.First Lien Secured Debt7.25% (1M L+625, 1.00% Floor)03/06/25$28,629 $28,267 $28,022 (9)
First Lien Secured Debt - Revolver8.50% (P+525)03/06/24409409 401 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded03/06/242,279(40)(43)(8)(9)
(21)(23)
First Lien Secured Debt - Letter of Credit6.25%07/01/2139— (1)(8)(9)
(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded03/06/2555(33)(1)(8)(9)
(21)(23)
Gutter Holdings, LPCommon Equity - Common StockN/AN/A500 Shares500 1,128 (9)(13)
Total Construction & Building$29,103 $29,506 
Consumer Goods – Durable
A&V
A&V Holdings Midco, LLCFirst Lien Secured Debt6.38% (3M L+538, 1.00% Floor)03/10/27$10,854 $10,514 $10,550 
First Lien Secured Debt - Unfunded Revolver0.375% Unfunded03/10/251,505(107)(89)(8)(21)
(23)
10,407 10,461 
KDC
KDC US HoldingsFirst Lien Secured Debt - Revolver3.11% (1M L+300)12/21/232,6962,696 2,635 (23)
First Lien Secured Debt - Unfunded Revolver0.38% Unfunded12/21/233,270— (74)(8)(21)
(23)
First Lien Secured Debt - Letter of Credit3.00%11/06/21 - 03/16/2250— (1)(8)(23)
First Lien Secured Debt - Letters of Credit3.00%02/05/22£— — (23)
2,696 2,560 
KLO Holdings, LLC
1244311 B.C. Ltd. (4)First Lien Secured Debt6.00% (1M L+500, 1.00% Floor)09/25/252,9932,993 2,857 (17)
First Lien Secured Debt6.00% (3M L+500 PIK, 1.00% Floor)09/25/251,0161,016 965 (17)
Common Equity - Common StockN/AN/A1,000,032 Shares1,000 1,719 (2)(13)
(17)(25)
9357-5991 Quebec Inc. (4)First Lien Secured Debt11.25% (3M L+775 Cash plus 2.00% PIK)04/07/223,945— — (14)
5,009 5,541 
Liqui-Box
Liqui-Box Holdings, Inc.First Lien Secured Debt - Revolver5.50% (3M L+450, 1.00% Floor)02/26/251,6611,661 1,660 (23)
First Lien Secured Debt - Revolver6.75% (P+350)02/26/25190190 190 (23)
First Lien Secured Debt - Revolver5.50% (1M L+450, 1.00% Floor)
02/26/25475475 474 (23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded02/26/251,161(28)(1)(8)(21)
(23)
First Lien Secured Debt - Letter of Credit4.50%06/30/2142 — — (23)
First Lien Secured Debt - Letters of Credit4.50%09/27/21 - 12/31/2432— — (23)
2,298 2,323 
See notes to financial statements.
98

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
NSi Industries
Wildcat BuyerCo, Inc.First Lien Secured Debt6.25% (3M L+525, 1.00% Floor)02/27/267,1746,878 7,074 
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded02/27/26717(13)(10)(8)(21)
(23)
First Lien Secured Debt - Letter of Credit5.25%08/30/218— — (23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded02/27/262,029(29)(28)(8)(21)
(23)
Wildcat Parent LPCommon Equity - Common StockN/AN/A1,070 Shares107 141 (13)
6,943 7,177 
Sorenson Holdings, LLC
Sorenson Holdings, LLCCommon Equity - Membership InterestsN/AN/A587 Shares— 484 (10)(13)
Total Consumer Goods – Durable$27,353 $28,546 
Consumer Goods – Non-durable
3D Protein
Protein For Pets Opco, LLCFirst Lien Secured Debt5.50% (3M L+450, 1.00% Floor)11/28/25$11,487 $11,322 $11,429 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded05/31/242,219(37)(11)(8)(9)
(21)(23)
11,285 11,418 
Beauty Industry Group (BIG)
BIG Buyer, LLCFirst Lien Secured Debt7.50% (6M L+650, 1.00% Floor)11/20/2319,42819,121 19,247 (9)
First Lien Secured Debt - Revolver7.50% (1M L+650, 1.00% Floor)11/20/23722722 708 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded11/20/231,083(29)(22)(8)(9)
(21)(23)
19,814 19,933 
Dan Dee
Project Comfort Buyer, Inc.First Lien Secured Debt8.00% (3M L+700, 1.00% Floor)02/01/2522,43522,003 21,457 (9)
First Lien Secured Debt8.00% (12M L+700, 1.00% Floor)02/01/253,8483,789 3,680 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded02/01/243,462(59)(161)(8)(9)
(21)(23)
Preferred Equity - Preferred EquityN/AN/A461,538 Shares462 212 (9)(13)
26,195 25,188 
LashCo
Lash OpCo, LLCFirst Lien Secured Debt9.25% (P+600)03/18/2610,2239,988 9,943 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded09/18/25697(16)(19)(8)(9)
(21)(23)
9,972 9,924 
Olaplex
Olaplex, Inc.First Lien Secured Debt7.50% (1M L+650, 1.00% Floor)01/08/2612,30012,104 12,210 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded01/08/252,300(35)(19)(8)(9)
(21)(23)
12,069 12,191 
Sequential Brands Group, Inc.
Sequential Brands Group, Inc.Second Lien Secured Debt9.75% (1M L+875, 1.00% Floor)02/07/2412,83712,777 10,536 (17)
Total Consumer Goods – Non-durable$92,112 $89,190 
See notes to financial statements.
99

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
Consumer Services
Clarus Commerce
Marlin DTC-LS Midco 2, LLCFirst Lien Secured Debt7.50% (6M L+650, 1.00% Floor)07/01/25$19,127 $18,817 $18,744 
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded07/01/25685(8)(14)(8)(21)
(23)
18,809 18,730 
First Heritage
First Heritage Credit, LLCFirst Lien Secured Debt4.87% (1M L+475)04/02/2218,00017,945 17,883 (9)
First Lien Secured Debt - Revolver5.62% (1M L+550)04/02/22747747 743 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded04/02/223,003(13)(18)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.50% Unfunded04/02/228,250(33)(54)(8)(9)
(21)(23)
18,646 18,554 
Go Car Wash
Go Car Wash Management Corp.First Lien Secured Debt6.75% (1M L+575, 1.00% Floor)12/31/261,8381,808 1,796 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/31/26417(5)(9)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.50% Unfunded12/31/262,742(17)(62)(8)(9)
(21)(23)
1,786 1,725 
Lending Point
LendingPoint LLCFirst Lien Secured Debt11.50% (3M L+1050, 1.00% Floor)12/30/2511,37511,267 11,253 (9)
First Lien Secured Debt - Revolver6.75% (3M L+575, 1.00% Floor)12/30/251,000991 989 (9)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded12/30/256,125(58)(66)(8)(9)
(21)(23)
12,200 12,176 
Nutrisystem
Nutrisystem, Inc.First Lien Secured Debt7.50% (1M L+650, 1.00% Floor)12/08/258,8008,634 8,663 
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/08/25200(4)(3)(8)(21)
(23)
8,630 8,660 
Only About Children
Nemo (BC) Bidco Pty LtdFirst Lien Secured Debt7.75% (1M BBSW+675, 1.00% Floor)04/06/24A$6,768 4,938 4,949 (17)
First Lien Secured Debt - Unfunded Delayed Draw3.04% Unfunded04/06/24A$232 (6)(7)(8)(17)
(21)(23)
4,932 4,942 
Paper Source
Paper Source, Inc.First Lien Secured Debt8.00% (3M L+700, 1.00% Floor)05/22/2411,32211,179 8,831 (9)
First Lien Secured Debt11.00% (1M L+1000, 1.00% Floor)06/30/211,6911,691 1,691 (9)
First Lien Secured Debt13.00% (3M L+1200, 1.00% Floor)02/26/21556556 434 (9)(11)
First Lien Secured Debt - Revolver8.00% (3M L+700, 1.00% Floor)05/22/243,0823,044 2,404 (9)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded06/30/211,597(75)— (9)(21) (23)
See notes to financial statements.
100

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
Preferred Equity - Preferred EquityN/AN/A658 Shares— — (9)(13) (25)
Common Equity - Class A Common StockN/AN/A20,548 Shares— — (9)(13) (25)
16,395 13,360 
Pinstripe Holdings, LLC
Pinstripe Holdings, LLCFirst Lien Secured Debt7.00% (1M L+600, 1.00% Floor)01/17/256,8606,773 6,798 
The Club Company
Eldrickco LimitedFirst Lien Secured Debt6.75% (6M GBPL+625 PIK, 0.50% Floor)11/21/25£10,976 13,797 14,336 (9)(17)
First Lien Secured Debt - Revolver6.75% (6M GBPL+625 PIK, 0.50% Floor)05/21/25£356 410 464 (9)(17)
(23)
First Lien Secured Debt - Unfunded Delayed Draw1.93% Unfunded11/21/25£3,934 (85)(253)(8)(9)
(17)(21)(23)
14,122 14,547 
US Auto
U.S. Auto Finance, Inc.First Lien Secured Debt6.25% (3M L+525, 1.00% Floor)04/17/2411,84211,875 11,810 (9)
First Lien Secured Debt - Revolver7.00% (3M L+600, 1.00% Floor)04/17/246,7346,734 6,715 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded04/17/246,600(36)(18)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.50% Unfunded04/17/248,222(21)— (9)(21)
(23)
18,552 18,507 
Total Consumer Services$120,845 $117,999 
Diversified Investment Vehicles, Banking, Finance, Real Estate
Celink
Compu-Link CorporationFirst Lien Secured Debt - Unfunded Revolver0.50% Unfunded06/11/24$2,273 $(33)$(27)(8)(9)
(21)(23)
Peer Advisors, LLCFirst Lien Secured Debt6.50% (1M L+550, 1.00% Floor)06/11/2419,03418,759 18,809 (9)
18,726 18,782 
Exeter Property Group, LLC
Exeter Property Group, LLCFirst Lien Secured Debt4.62% (1M L+450)08/28/244,5504,508 4,550 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded08/28/24192(2)— (9)(21)
(23)
4,506 4,550 
Flock Financial, LLC
Flock SPV I, LLCFirst Lien Secured Debt7.50% (1M L+650, 1.00% Floor)08/30/2214,53314,505 14,388 (9)(17)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded08/30/221,333(5)(13)(8)(9)
(17)(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.50% Unfunded08/30/224,133(38)(41)(8)(9)
(17)(21)(23)
14,462 14,334 
Golden Bear
Golden Bear 2016-R, LLC (4)Structured Products and Other - Membership Interests09/20/42N/A16,812 11,289 (3)(17)
See notes to financial statements.
101

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
Purchasing Power, LLC
Purchasing Power Funding I, LLCFirst Lien Secured Debt - Revolver7.50% (1M L+650, 1.00% Floor)01/24/248,3838,384 8,334 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.40% Unfunded01/24/24729— (4)(8)(9)
(21)(23)
8,384 8,330 
Ten-X, LLC
Ten-X, LLCFirst Lien Secured Debt - Revolver3.36% (1M L+325)09/29/224,6804,554 4,485 (23)
Total Diversified Investment Vehicles, Banking, Finance, Real Estate$67,444 $61,770 
Education
NFA Group
SSCP Spring Bidco LimitedFirst Lien Secured Debt6.75% (6M GPBL+625, 0.50% Floor)07/30/25£30,000 $36,161 $41,159 (9)(17)
Total Education$36,161 $41,159 
Energy – Electricity
Renew Financial LLC (f/k/a Renewable Funding, LLC)
AIC SPV Holdings II, LLC (4)Preferred Equity - Preferred StockN/AN/A143 Shares$534 $498 (15)(17)
(25)
Renew Financial LLC (f/k/a Renewable Funding, LLC) (4)Preferred Equity - Series B Preferred StockN/AN/A1,505,868 Shares8,343 42 (13)(25)
Preferred Equity - Series D Preferred StockN/AN/A436,689 Shares5,568 28 (13)(25)
Preferred Equity - Series E Preferred StockN/AN/A441,576 Shares1,902 5,106 (13)(17)
(25)
Renew JV LLC (4)Common Equity - Membership InterestsN/AN/A671,194 Shares671 776 (13)(17)
(25)
17,018 6,450 
Solarplicity Group Limited (f/k/a AMP Solar UK)
Solarplicity UK Holdings LimitedFirst Lien Secured Debt4.00%03/08/23£5,562 7,637 2,534 (14)(17)
Preferred Equity - Preferred StockN/AN/A4,286 Shares5,623 — (2)(13)
(17)
Common Equity - Ordinary SharesN/AN/A2,825 Shares— (2)(13)
(17)
13,264 2,534 
Total Energy – Electricity$30,282 $8,984 
Energy – Oil & Gas
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.)
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.) (5)Second Lien Secured Debt10.00% PIK03/29/21$41,121 $36,926 $8,111 (11)(14)
Common Equity - Common StockN/AN/A5,000,000 Shares30,078 — (13)(25)
67,004 8,111 
Pelican
Pelican Energy, LLC (4)Common Equity - Membership InterestsN/AN/A1,444 Shares16,764 2,170 (13)(16)
(17)(25)
See notes to financial statements.
102

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
Spotted Hawk
SHD Oil & Gas, LLC (5)First Lien Secured Debt - Tranche A Note14.00% (8.00% Cash plus 6.00%
PIK)
07/31/2147,51144,059 9,899 (14)
First Lien Secured Debt - Tranche B Note14.00% PIK07/31/2189,43444,380 — (14)
First Lien Secured Debt - Tranche C Note12.00%07/31/2124,72824,728 25,470 
Common Equity - Series A UnitsN/AN/A7,600,000 Shares1,411 — (13)(16)
(25)
114,578 35,369 
Total Energy – Oil & Gas$198,346 $45,650 
Environmental Industries
Ortega National Parks
Ortega National Parks, LLCFirst Lien Secured Debt6.25% (6M L+525, 1.00% Floor)10/31/25$11,603 $11,429 $11,132 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded10/31/251,366(31)(55)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded10/31/256,202(51)(252)(8)(9)
(21)(23)
Total Environmental Industries$11,347 $10,825 
Healthcare & Pharmaceuticals
Akoya
Akoya Biosciences, Inc.First Lien Secured Debt7.85% (1M L+635, 1.50% Floor)10/27/25$9,750 $9,746 $9,735 (9)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded10/27/251,500(7)(2)(8)(9)
(21)(23)
9,739 9,733 
AmeriVet
Amerivet Partners Management, Inc.First Lien Secured Debt6.25% (3M L+525, 1.00% Floor)06/05/241,5171,500 1,514 (9)
First Lien Secured Debt6.25% (6M L+525, 1.00% Floor)06/05/2426,88326,509 26,827 (9)
First Lien Secured Debt6.25% (2M L+525, 1.00% Floor)06/05/24912901 911 (9)
First Lien Secured Debt - Revolver7.50% (P+425)06/05/24524524 523 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded06/05/24282(11)(1)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.50% Unfunded06/05/244,519(72)(9)(8)(9)
(21)(23)
Amerivet Partners Parent LPCommon Equity - Class D Partnership UnitsN/AN/A13 Shares125 192 (9)(13)
29,476 29,957 
Analogic
Analogic CorporationFirst Lien Secured Debt6.25% (1M L+525, 1.00% Floor)06/22/2418,03317,789 17,762 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded06/22/231,826(20)(27)(8)(9)
(21)(23)
17,769 17,735 
BioClinica Holding I, LP
BioClinica Holding I, LPSecond Lien Secured Debt9.25% (1M L+825, 1.00% Floor)10/21/2424,61224,359 24,501 
BK Medical
BK Medical Holding Company, Inc.First Lien Secured Debt6.25% (1M L+525, 1.00% Floor)06/22/247,2317,179 7,187 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded06/22/24783(5)(2)(8)(9)
(21)(23)
7,174 7,185 
See notes to financial statements.
103

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
CARE Fertility
Royton Bidco LimitedFirst Lien Secured Debt6.75% (6M GBPL+625, 0.50% Floor)05/09/25£15,510 19,796 21,093 (9)(17)
First Lien Secured Debt6.75% (1M GBPL+625, 0.50% Floor)05/09/25£2,147 2,701 2,920 (9)(17)
First Lien Secured Debt - Unfunded Delayed Draw2.19% Unfunded05/09/25£2,265 (59)(45)(8)(9)
(17)(21)(23)
22,438 23,968 
Cerus
Cerus CorporationFirst Lien Secured Debt7.25% (1M L+545, 1.80% Floor)03/01/2416,50016,452 16,830 (9)(17)
First Lien Secured Debt - Revolver5.55% (1M L+375, 1.80% Floor)03/01/24125125 127 (9)(17)
(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded03/01/24875(1)— (9)(17)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded03/01/244,500(13)— (9)(17)
(21)(23)
16,563 16,957 
Dohmen Life Science Services
LSCS Holdings, IncSecond Lien Secured Debt8.51% (6M L+825)03/16/2619,81819,530 19,285 
Emmes Corporation
Emmes Blocker, Inc.Common Equity - Common StockN/AN/A306 Shares306 475 (9)(13)
The Emmes Company, LLCFirst Lien Secured Debt6.00% (6M L+500, 1.00% Floor)03/03/2512,00011,882 11,760 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded03/03/252,449(24)(49)(8)(9)
(21)(23)
12,164 12,186 
Genesis Healthcare, Inc.
Genesis Healthcare, Inc.First Lien Secured Debt - Unfunded Revolver0.50% Unfunded03/08/2385,870(305)(1,511)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw2.00% Unfunded03/06/236,087— (91)(8)(9)
(21)(23)
(305)(1,602)
Gossamer
GB001, Inc.First Lien Secured Debt9.00% (1M L+700, 2.00% Floor)01/01/256,0005,995 6,120 (9)(17)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded01/01/2524,000(156)— (9)(17)
(21)(23)
5,839 6,120 
Health & Safety Institute
HSI Halo Acquisition, Inc.First Lien Secured Debt6.75% (3M L+575, 1.00% Floor)08/31/268,9818,886 8,852 (9)
First Lien Secured Debt - Revolver6.75% (1M L+575, 1.00% Floor)08/30/25135135 134 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded08/30/25677(6)(7)(8)(9)
(21)(23)
Common Equity - Common StockN/AN/A500 Shares500 517 (9)(13)
9,515 9,496 
See notes to financial statements.
104

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
IMA Group
IMA Group Management Company, LLCFirst Lien Secured Debt6.50% (6M L+550, 1.00% Floor)05/30/24458454 439 
First Lien Secured Debt6.50% (3M L+550, 1.00% Floor)05/30/244,6164,587 4,432 
First Lien Secured Debt - Revolver6.50% (1M L+550, 1.00% Floor)05/30/24289287 277 (23)
5,328 5,148 
Kindeva
Kindeva Drug Delivery L.P.First Lien Secured Debt7.00% (3M L+600, 1.00% Floor)05/01/261,8201,781 1,804 (9)
First Lien Secured Debt - Revolver7.00% (1M L+600, 1.00% Floor)05/01/255050 50 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded05/01/25117(3)(1)(8)(9)
(21)(23)
1,828 1,853 
KureSmart
Clearway Corporation (f/k/a NP/Clearway Holdings, Inc.)Common Equity - Common StockN/AN/A133 Shares133 162 (9)(13)
Kure Pain Holdings, Inc.First Lien Secured Debt6.50% (1M L+550, 1.00% Floor)08/27/2421,88021,656 21,493 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded08/27/242,654(27)(47)(8)(9)
(21)(23)
21,762 21,608 
Lanai Holdings III, Inc. (Patterson Medical)
Lanai Holdings III, Inc.Second Lien Secured Debt11.50% (1M L+1050 PIK, 1.00% Floor)08/28/2319,56419,385 19,079 
Mannkind Corporation
Mannkind CorporationFirst Lien Secured Debt8.75% (1M L+675, 2.00% Floor)08/01/2417,33317,218 17,888 (9)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded08/01/248,667(29)— (9)(21)
(23)
WarrantsN/AN/A444,936 Shares76 1,492 (9)(13)
17,265 19,380 
Maxor National Pharmacy Services, LLC
Maxor National Pharmacy Services, LLCFirst Lien Secured Debt6.50% (3M L+550, 1.00% Floor)11/22/2323,63823,379 23,590 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded11/22/221,558(13)(1)(8)(9)
(21)(23)
23,366 23,589 
Medical Guardian
Medical Guardian, LLCFirst Lien Secured Debt8.75% (1M L+825, 0.50% Floor)12/31/2428,57128,142 28,374 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/31/245,714(86)(39)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.50% Unfunded12/31/245,714(114)(39)(8)(9)
(21)(23)
27,942 28,296 
Midwest Vision
Midwest Vision Partners Management, LLCFirst Lien Secured Debt7.25% (6M L+625, 1.00% Floor)01/12/275,7045,594 5,647 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded01/12/27612(12)(6)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded01/12/273,670(35)(37)(8)(9)
(21)(23)
5,547 5,604 
See notes to financial statements.
105

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
Orchard
Orchard Therapeutics plcFirst Lien Secured Debt7.00% (1M L+600, 1.00% Floor)05/24/248,3338,307 8,400 (9)(17)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded05/24/2416,667(53)— (9)(17)
(21)(23)
8,254 8,400 
Ovation Fertility
FPG Services, LLCFirst Lien Secured Debt6.50% (3M L+550, 1.00% Floor)06/13/2513,90113,713 13,762 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded06/13/242,105(27)(21)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded06/13/253,768(37)(38)(8)(9)
(21)(23)
13,649 13,703 
Partner Therapeutics, Inc
Partner Therapeutics, IncFirst Lien Secured Debt7.65% (1M L+665, 1.00% Floor)01/01/2310,0009,934 9,975 (9)
Preferred Equity - Preferred EquityN/AN/A55,556 Shares333 416 (9)(13)
WarrantsN/AN/A33,333 Shares135 103 (9)(13)
10,402 10,494 
PHS
PHS Buyer, Inc.First Lien Secured Debt6.25% (3M L+525, 1.00% Floor)01/31/2510,20310,055 9,947 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded01/31/252,000(29)(50)(8)(9)
(21)(23)
10,026 9,897 
Radius Health
Radius Health, Inc.First Lien Secured Debt7.75% (1M L+575, 2.00% Floor)06/01/2429,00028,636 28,623 (9)(17)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded06/01/241,000(2)(1)(8)(9)
(17)(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded06/01/244,833— — (9)(17)
(21)(23)
28,634 28,622 
RHA Health Services
Pace Health Companies, LLCFirst Lien Secured Debt5.50% (3M L+450, 1.00% Floor)08/02/243,9143,874 3,902 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded08/02/24395(7)(1)(8)(9)
(21)(23)
First Lien Secured Debt - Letter of Credit4.50%12/10/21105— — (9)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded08/02/24575(27)(2)(8)(9)
(21)(23)
3,840 3,899 
Rigel Pharmaceuticals
Rigel Pharmaceuticals, Inc.First Lien Secured Debt7.15% (1M L+565, 1.50% Floor)09/01/246,0006,012 6,049 (9)
RiteDose Holdings I, Inc.
RiteDose Holdings I, Inc.First Lien Secured Debt7.50% (1M L+650, 1.00% Floor)09/13/2313,33313,155 13,333 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded09/13/232,000(27)— (9)(21)
(23)
13,128 13,333 
Total Healthcare & Pharmaceuticals$390,629 $394,475 
See notes to financial statements.
106

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
High Tech Industries
Acronis AG
Acronis AGFirst Lien Secured Debt7.85% (1M L+635, 1.50% Floor)12/18/24$21,000 $20,922 $20,895 (9)(17)
American Megatrends
AMI US Holdings Inc.First Lien Secured Debt6.50% (1M L+550, 1.00% Floor)04/01/2521,65121,362 21,833 (9)
First Lien Secured Debt - Revolver5.61% (1M L+550)04/01/242,0932,093 2,093 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded04/01/24814(35)— (9)(21)
(23)
23,420 23,926 
Calero Holdings, Inc.
Telesoft Holdings, LLCFirst Lien Secured Debt6.75% (3M L+575, 1.00% Floor)12/16/2522,50022,101 22,104 
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/16/252,273(40)(40)(8)(21)
(23)
22,061 22,064 
ChyronHego Corporation
ChyronHego Corporation (5)First Lien Secured Debt6.00% (3M L+350 Cash plus 1.50% PIK, 1.00% Floor)12/31/2284,20281,644 81,676 
First Lien Secured Debt - Revolver6.00% (3M L+500, 1.00% Floor)12/31/222,4062,406 2,334 (23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/31/223,594— (108)(8)(21)
(23)
Preferred Equity - Preferred EquityN/AN/A7,800 Shares6,000 6,151 (13)(25)
90,050 90,053 
Digital.ai
Digital.ai Software Holdings, Inc.First Lien Secured Debt8.00% (3M L+700, 1.00% Floor)02/10/2722,58121,919 22,242 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded02/10/272,419(71)(36)(8)(9)
(21)(23)
21,848 22,206 
GoHealth
Norvax, LLCFirst Lien Secured Debt7.50% (3M L+650, 1.00% Floor)09/15/2531,34130,753 31,654 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded09/13/243,182(55)— (9)(21)
(23)
30,698 31,654 
International Cruise & Excursion Gallery, Inc.
International Cruise & Excursion Gallery, Inc.First Lien Secured Debt6.25% (3M L+525, 1.00% Floor)06/06/2514,58714,411 13,350 
LabVantage Solutions
LabVantage Solutions Inc.First Lien Secured Debt8.50% (1M L+750, 1.00% Floor)09/30/217,2567,236 7,256 
LabVantage Solutions LimitedFirst Lien Secured Debt8.50% (1M E+750, 1.00% Floor)09/30/218,053 8,642 9,465 (17)
15,878 16,721 
See notes to financial statements.
107

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
Magnitude Software
New Amsterdam Software BidCo LLCFirst Lien Secured Debt6.00% (3M L+500, 1.00% Floor)05/01/266,7966,697 6,694 (9)
First Lien Secured Debt6.00% (3M E+500, 1.00% Floor)05/01/26730 807 845 (9)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded05/01/262,250(16)(34)(8)(9)
(21)(23)
7,488 7,505 
MYCOM
Magnate Holding Corp.First Lien Secured Debt7.75% (3M L+625 Cash plus 1% PIK, 0.50% Floor)12/16/2418,11217,959 15,575 (9)(17)
First Lien Secured Debt - Revolver7.75% (3M L+625 Cash plus 1% PIK, 0.50% Floor)12/14/232,9702,970 2,554 (9)(17)
(23)
First Lien Secured Debt - Unfunded Revolver2.19% Unfunded12/14/23221(27)(31)(8)(9)
(17)(21)(23)
First Lien Secured Debt - Letter of Credit6.25%04/22/21140— (20)(8)(9)
(17)(23)
20,902 18,078 
Omnitracs, LLC
Omnitracs, LLCFirst Lien Secured Debt - Unfunded Revolver0.375% Unfunded03/23/233,750(133)(263)(8)(21)
(23)
Pro Vigil
Pro-Vigil Holding Company, LLCFirst Lien Secured Debt9.50% (1M L+850, 1.00% Floor)01/13/258,0007,774 7,760 (9)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded01/13/252,000(33)(60)(8)(9)
(21)(23)
7,741 7,700 
Schlesinger Group
Schlesinger Global, LLCFirst Lien Secured Debt8.00% (3M L+600 Cash plus 1.00% PIK, 1.00% Floor)07/12/259,0668,885 8,857 (9)
First Lien Secured Debt8.00% (3M L+600 Cash plus 1.00% PIK, 1.00% Floor)07/12/25841825 822 (9)
9,710 9,679 
Simeio
Simeio Group Holdings, Inc.First Lien Secured Debt6.25% (1M L+525, 1.00% Floor)01/30/268,5678,464 8,422 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded01/30/261,731(21)(29)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.75% Unfunded01/30/264,615(28)(83)(8)(9)
(21)(23)
8,415 8,310 
Sirsi Corporation
Sirsi CorporationFirst Lien Secured Debt5.75% (1M L+475, 1.00% Floor)03/15/246,4596,401 6,362 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded03/15/24429(4)(6)(8)(9)
(21)(23)
6,397 6,356 
Sontiq, Inc.
Sontiq, Inc.First Lien Secured Debt8.50% (3M L+750, 1.00% Floor)03/02/2614,16713,888 13,883 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded03/02/26833(14)(17)(8)(9)
(21)(23)
13,874 13,866 
See notes to financial statements.
108

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
Springbrook
Springbrook Holding Company, LLCFirst Lien Secured Debt6.75% (3M L+575, 1.00% Floor)12/23/269,7559,618 9,613 
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/23/261,463(21)(21)(8)(21)
(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded12/23/263,659(29)(53)(8)(21)
(23)
9,568 9,539 
Tax Slayer
MEP-TS Midco, LLCFirst Lien Secured Debt7.50% (6M L+650, 1.00% Floor)12/31/2613,51413,256 13,379 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/31/261,452(28)(15)(8)(9)
(21)(23)
13,228 13,364 
Telnyx
Telnyx LLCFirst Lien Secured Debt7.75% (1M L+625, 1.50% Floor)10/21/255,2505,216 5,250 (9)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded10/21/254,750(43)— (9)(21)
(23)
5,173 5,250 
Total High Tech Industries$341,651 $340,253 
Insurance
PGM Holdings Corporation
Turbo Buyer, Inc.First Lien Secured Debt6.50% (6M L+550, 1.00% Floor)12/02/25$13,912 $13,638 $13,786 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/02/25923(18)(8)(8)(9)
(21)(23)
13,620 13,778 
Relation Insurance
AQ Sunshine, Inc.First Lien Secured Debt7.25% (3M L+625, 1.00% Floor)04/15/252,6172,580 2,619 (9)
First Lien Secured Debt7.25% (6M L+625, 1.00% Floor)04/15/2518,52418,273 18,542 (9)
First Lien Secured Debt - Revolver7.25% (6M L+625, 1.00% Floor)04/15/24471471 472 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded04/15/24668(14)— (9)(21)
(23)
First Lien Secured Debt - Letter of Credit6.25%04/30/2138— — (9)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded04/15/254,611(186)— (9)(21)
(23)
21,124 21,633 
Total Insurance$34,744 $35,411 
Manufacturing, Capital Equipment
AVAD, LLC
AVAD Canada Ltd.First Lien Secured Debt - RevolverN/A10/02/23$284 $274 $283 (9)(23)
AVAD, LLCFirst Lien Secured Debt - RevolverN/A10/02/233,7442,537 1,639 (9)(23)
Surf Opco, LLCFirst Lien Secured Debt - Revolver5.00% (1M L+400, 1.00% Floor)03/16/261,6671,667 1,667 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded03/16/2615,000— — (9)(21) (23)
Preferred Equity - Class P-1 PreferredN/AN/A33,333 Shares3,333 6,667 (9)(16)
(25)
See notes to financial statements.
109

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
Preferred Equity - Class P-2 PreferredN/AN/A85,164 Shares8,516 3,328 (9)(16)
(25)
Common Equity - Class A-1 CommonN/AN/A3,333 Shares— 215 (9)(16)
(25)
16,327 13,799 
Kauffman
Kauffman Holdco, LLCCommon Equity - Common StockN/AN/A250,000 Shares250 51 (9)(13)
Kauffman Intermediate, LLCFirst Lien Secured Debt7.50% (3M L+650, 1.00% Floor)05/08/2516,66516,436 15,960 (9)
First Lien Secured Debt - Revolver7.50% (1M L+650, 1.00% Floor)05/08/257878 74 (9)(23)
First Lien Secured Debt - Revolver7.50% (3M L+650, 1.00% Floor)05/08/25388388 372 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded05/08/251,165(35)(49)(8)(9)
(21)(23)
First Lien Secured Debt - Letter of Credit6.50%07/25/21155— (7)(8)(9)
(23)
17,117 16,401 
MedPlast Holdings Inc.
MedPlast Holdings Inc.Second Lien Secured Debt7.86% (1M L+775)07/02/268,0007,947 7,619 
Total Manufacturing, Capital Equipment$41,391 $37,819 
Media – Diversified & Production
New Wave Entertainment
NW Entertainment, Inc.First Lien Secured Debt10.00% (3M L+700 Cash plus 2.00% PIK, 1.00% Floor)08/16/24$26,450 $26,101 $25,130 (9)(19)
First Lien Secured Debt - Revolver8.00% (3M L+700, 1.00% Floor)08/16/243,0613,021 2,909 (9)(19)
(23)
29,122 28,039 
Nitro World Entertainment
NWE OPCO LPFirst Lien Secured Debt8.50% (1M L+650, 2.00% Floor)12/19/224,8154,801 4,790 (9)
Sonar Entertainment
Sonar Entertainment, Inc.First Lien Secured Debt8.85% (1M L+760, 1.25% Floor)11/15/216,8496,824 5,651 (9)(19)
First Lien Secured Debt - Revolver8.85% (1M L+760, 1.25% Floor)11/15/213,3043,304 2,726 (9)(19)
(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded11/15/2119,527(83)— (9)(21)
(23)
10,045 8,377 
Total Media – Diversified & Production$43,968 $41,206 
Retail
IPS
SI Holdings, Inc.First Lien Secured Debt6.75% (3M L+575, 1.00% Floor)07/25/25$31,324 $30,862 $30,757 (9)
First Lien Secured Debt - Revolver6.75% (3M L+575, 1.00% Floor)07/25/24853853 842 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded07/25/242,560(45)(34)(8)(9)
(21)(23)
31,670 31,565 
See notes to financial statements.
110

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
Rapid Displays
Rapid Displays Acquisition CorporationFirst Lien Secured Debt6.00% (3M L+500, 1.00% Floor)07/01/2510,30510,161 10,305 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded07/01/252,308(16)— (9)(21)
(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded07/01/251,154(12)— (9)(21)
(23)
10,133 10,305 
Total Retail$41,803 $41,870 
Telecommunications
IPC Corporation
IPC CorporationFirst Lien Secured Debt5.21% (3M L+500)08/06/21$10,000 $9,989 $9,301 (9)
IPC Information Systems UK Holdings LimitedFirst Lien Secured Debt8.00% (3M L+650, 1.50% Floor)08/06/211,4051,393 1,360 (9)(17)
11,382 10,661 
Securus Technologies Holdings, Inc.
Securus Technologies Holdings, Inc.Second Lien Secured Debt9.25% (6M L+825, 1.00% Floor)11/01/2512,87812,804 11,139 
Total Telecommunications$24,186 $21,800 
Transportation – Cargo, Distribution
Dynamic Product Tankers (Prime), LLC
Dynamic Product Tankers, LLC (5)Unsecured Debt5.31% (6M L+500)07/31/24$22,000 $22,000 $22,000 (17)
Common Equity - Class A UnitsN/AN/AN/A49,806 25,528 (13)(17)
(24)(25)
71,806 47,528 
Heniff and Superior
Heniff Holdco, LLCFirst Lien Secured Debt6.75% (3M L+575, 1.00% Floor)12/03/2630,76430,242 30,023 (9)
First Lien Secured Debt - Revolver6.75% (1M L+575, 1.00% Floor)12/03/242,5182,518 2,480 (9)(23)
First Lien Secured Debt - Revolver6.75% (3M L+575, 1.00% Floor)12/03/241,0471,047 1,030 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/03/245(58)— (9)(21)
(23)
First Lien Secured Debt - Letter of Credit5.75%02/06/22355— (5)(8)(9)
(23)
33,749 33,528 
MSEA Tankers LLC
MSEA Tankers LLC (5)Common Equity - Class A UnitsN/AN/AN/A57,660 57,028 (17)(18)
(25)
Total Transportation – Cargo, Distribution$163,215 $138,084 
Wholesale
Banner Solutions
Banner Buyer, LLCFirst Lien Secured Debt6.75% (1M L+575, 1.00% Floor)10/31/25$396 $393 $393 (9)
First Lien Secured Debt6.75% (12M L+575, 1.00% Floor)10/31/2512,41412,247 12,314 (9)
First Lien Secured Debt - Revolver6.75% (1M L+575, 1.00% Floor)10/31/25387387 384 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded10/31/251,548(26)(12)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.75% Unfunded10/31/255,097(37)(41)(8)(9)
(21)(23)
See notes to financial statements.
111

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity DatePar/Shares (12)Cost (28)Fair Value (1)(29)
Banner Parent Holdings, IncCommon Equity - Common StockN/AN/A5,164 Shares516 526 (9)(13)
Total Wholesale$13,480 $13,564 
Total Investments before Cash Equivalents$2,716,399$2,449,151
J.P. Morgan U.S. Government Money Market Fund$50,180$50,180$50,180(22)
Total Investments after Cash Equivalents$2,766,579$2,499,331(6)(7)
____________________
(1)Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (See Note 2 to the financial statements).
(2)Preferred and ordinary shares in Solarplicity UK Holdings Limited are GBP denominated equity investments. Common shares in 1244311 B.C. Ltd. are CAD denominated equity investments.
(3)Denotes investments in which the Company owns greater than 25% of the equity, where the governing documents of each entity preclude the Company from exercising a controlling influence over the management or policies of such entity. The Company does not have the right to elect or appoint more than 25% of the directors or another party has the right to elect or appoint more directors than the Company and has the right to appoint certain members of senior management. Therefore, the Company has determined that these entities are not controlled affiliates. As of March 31, 2021, we had a 100% equity ownership interest in Golden Bear 2016-R, LLC, a collateralized loan obligation and 31% ownership in Carbonfree Chemicals SA LLC.





















See notes to financial statements.
112

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
(4)Denotes investments in which we are an “Affiliated Person,” as defined in the 1940 Act, due to holding the power to vote or owning 5% or more of the outstanding voting securities of the investment but not controlling the company. Fair value as of March 31, 2020 and March 31, 2021 along with transactions during the year ended March 31, 2021 in these affiliated investments are as follows:
Name of IssuerFair Value at March 31, 2020Gross Additions ●Gross Reductions ■Net Change in Unrealized Gains (Losses)Fair Value at March 31, 2021Net Realized Gains (Losses)Interest/Dividend/Other Income
1244311 B.C. Ltd., Common Stock$— $1,000 $— $719 $1,719 $— $— 
1244311 B.C. Ltd., Term Loan— 1,016 — (51)965 — 31 
1244311 B.C. Ltd., Term Loan— 3,000 (7)(136)2,857 — 91 
KLO Acquisition LLC, Term Loan— 30 (4,838)4,808 — (4,808)— 
9357-5991 Quebec Inc., Term Loan— 2,118 (8,653)6,535 — (3,653)— 
AIC SPV Holdings II, LLC, Preferred Stock442 — — 56 498 — 102 
AMP Solar Group, Inc., Class A Common Unit8,736 — (10,000)1,264 — 4,176 — 
Carbonfree Caustic SPE LLC, Term Loan13,111 — (13,111)— — — — 
Carbonfree Chemicals Holdings LLC, Common Equity / Interest15,105 14,541 (36)(4,186)25,424 — — 
Carbonfree Chemicals SA LLC, Class B Units— 17,057 (26)(17,031)— — — 
Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC), Term Loan4,389 — (17,057)12,668 — — 11 
Golden Bear 2016-R, LLC, Membership Interests9,748 83 — 1,458 11,289 — 1,206 
Pelican Energy, LLC, Membership Interests2,411 — (58)(183)2,170 — — 
Renew Financial LLC (f/k/a Renewable Funding, LLC), Series B Preferred Stock3,284 — — (3,242)42 — — 
Renew Financial LLC (f/k/a Renewable Funding, LLC), Series D Preferred Stock2,101 — — (2,073)28 — — 
Renew Financial LLC (f/k/a Renewable Funding, LLC), Series E Preferred Stock— 1,902 — 3,204 5,106 — — 
Renew JV LLC, Membership Interests914 — (222)84 776 — — 
$60,241 $40,747 $(54,008)$3,894 $50,874 $(4,285)$1,441 
____________________
● Gross additions includes increases in the basis of investments resulting from new portfolio investments, payment-in-kind interest or dividends, the accretion of discounts, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.
■ Gross reductions include decreases in the basis of investments resulting from principal collections related to investment repayments or sales, the amortization of premiums, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.
See notes to financial statements.
113

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
(5)Denotes investments in which we are deemed to exercise a controlling influence over the management or policies of a company, as defined in the 1940 Act, due to beneficially owning, either directly or through one or more controlled companies, more than 25% of the outstanding voting securities of the investment. Fair value as of March 31, 2020 and March 31, 2021 along with transactions during the year ended March 31, 2021 in these controlled investments are as follows:
Name of IssuerFair Value at March 31, 2020Gross Additions ●Gross Reductions ■Net Change in Unrealized Gains (Losses)Fair Value at March 31, 2021Net Realized Gains (Losses)Interest/Dividend/Other Income
Majority Owned Company
ChyronHego Corporation, Preferred Equity$— $6,000 $— $151 $6,151 $— $— 
ChyronHego Corporation, Term Loan— 81,644 — 32 81,676 — 429 
ChyronHego Corporation, Revolver— 2,406 — (180)2,226 — 1,161 
Dynamic Product Tankers, LLC, Class A Units36,457 — — (10,928)25,528 — — 
Dynamic Product Tankers, LLC, First Lien Term Loan42,000 130 (42,000)(130)— — 1,391 
Dynamic Product Tankers, LLC, Unsecured Debt— 22,000 — — 22,000 — 738 
Dynamic Product Tankers, LLC, Letters of Credit— — — — — — — 
Merx Aviation Finance, LLC, Membership Interests28,447 105,300 — (8,686)125,061 — — 
Merx Aviation Finance, LLC, Revolver305,300 10,500 (125,300)— 190,500 — 19,796 
Merx Aviation Finance, LLC, Letters of Credit— — — — — — — 
MSEA Tankers LLC, Class A Units59,735 — (4,289)1,582 57,028 — 1,691 
Controlled Company
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.), Second Lien Term Loan14,711 — — (6,600)8,111 — — 
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.), Common Stock— — — — — — — 
SHD Oil & Gas, LLC, Series A Units— — — — — — — 
SHD Oil & Gas, LLC, Tranche A Note22,495 — (939)(11,656)9,899 — — 
SHD Oil & Gas, LLC, Tranche B Note— — — — — — — 
SHD Oil & Gas, LLC, Tranche C Note24,720 728 — 22 25,470 — 3,153 
$533,865 $228,708 $(172,528)$(36,393)$553,650 $— $28,359 
____________________
● Gross additions includes increases in the basis of investments resulting from new portfolio investments, payment-in-kind interest or dividends, the accretion of discounts, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.
■ Gross reductions include decreases in the basis of investments resulting from principal collections related to investment repayments or sales, the amortization of premiums, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.
    As of March 31, 2021, the Company had a 78%, 85%, 47%, 100%, 98% and 38% equity ownership interest in ChyronHego Corporation, Dynamic Product Tankers, LLC; Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.); Merx Aviation Finance, LLC; MSEA Tankers, LLC; and SHD Oil & Gas, LLC (f/k/a Spotted Hawk Development LLC), respectively.
See notes to financial statements.
114

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)

(6)Aggregate gross unrealized gain and loss for federal income tax purposes is $62,170 and $391,419, respectively. Net unrealized loss is $329,249 based on a tax cost of $2,828,580.
(7)Substantially all securities are pledged as collateral to our multi-currency revolving credit facility (the “Senior Secured Facility” as defined in Note 8 to the financial statements). As such, these securities are not available as collateral to our general creditors.
(8)The negative fair value is the result of the commitment being valued below par.
(9)These are co-investments made with the Company’s affiliates in accordance with the terms of the exemptive order the Company received from the Securities and Exchange Commission (the “SEC”) permitting us to do so. (See Note 3 to the financial statements for discussion of the exemptive order from the SEC.)
(10)Other than the investments noted by this footnote, the fair value of the Company’s investments is determined using unobservable inputs that are significant to the overall fair value measurement. See Note 2 to the financial statements for more information regarding ASC 820, Fair Value Measurements (“ASC 820”).
(11)The maturity date for these investments are expected to be extended past March 31, 2021. The final terms of the extension are still under negotiation between the Company and the respective portfolio company.
(12)Par amount is denominated in USD unless otherwise noted, Euro (“€”), British Pound (“£”), Canadian Dollar (“C$”), and Australian Dollar (“A$”) .
(13)Non-income producing security.
(14)Non-accrual status (See Note 2 to the financial statements).
(15)The underlying investments of AIC SPV Holdings II, LLC is a securitization in which the Company has a 14.25% ownership interest in the residual tranche.
(16)AIC Spotted Hawk Holdings, LLC, AIC SHD Holdings, LLC, AIC Pelican Holdings, LLC and AP Surf Investments, LLC are wholly-owned special purpose vehicles which only hold investments of the underlying portfolio companies and have no other significant assets or liabilities. AIC Spotted Hawk Holdings, LLC holds equity and debt investments in SHD Oil & Gas, LLC. AIC SHD Holdings LLC holds equity investments in SHD Oil & Gas, LLC. and equity investments in both Carbonfree Chemicals Holdings, LLC and Carbonfree Chemicals SA, LLC. AIC Pelican Holdings, LLC holds an equity investment in Pelican Energy, LLC. AP Surf Investments, LLC holds equity investments in Surf Opco, LLC.
(17)Investments that the Company has determined are not “qualifying assets” under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets. The status of these assets under the 1940 Act is subject to change. The Company monitors the status of these assets on an ongoing basis. As of March 31, 2021, non-qualifying assets represented approximately 15.98% of the total assets of the Company.
(18)As of March 31, 2021, MSEA Tankers, LLC had various classes of limited liability interests outstanding of which the Company holds Class A-1 and Class A-2 units which are identical except that Class A-1 unit is voting and Class A-2 unit is non-voting. The units entitle the Company to appoint two out of three managers to the board of managers.
(19)Denoted security is currently accruing additional penalty interest above the stated rate.
(20)Generally, the interest rate on floating interest rate investments is at benchmark rate plus spread. The borrower has an option to choose the benchmark rate, such as the London Interbank Offered Rate (“LIBOR”), the Euro Interbank Offered Rate (“EURIBOR”), the federal funds rate or the prime rate. The spread may change based on the type of rate used. The terms in the Schedule of Investments disclose the actual interest rate in effect as of the reporting period. LIBOR loans are typically indexed to 30-day, 60-day, 90-day or 180-day LIBOR rates (1M L, 2M L, 3M L or 6M L, respectively), EURIBOR loans are typically indexed to 90-day EURIBOR rates (3M E), Bank Bill Swap rates are typically index to 90-day Bank Bill Swap rates (3M BBSW), GBP LIBOR loans are typically indexed to 90-day GBP LIBOR rates (3M GBP L) and EUR LIBOR loans are typically indexed to 90-day EUR LIBOR rates (3M E L) at the borrower’s option. LIBOR and EURIBOR loans may be subject to interest floors. As of March 31, 2021, rates for 1M L, 2M L, 3M L, 6M L, 1M E, 3M E, 1M BBSW, 3M BBSW, 1M GBP L, 3M GBP L, and Prime are 0.11%, 0.13%, 0.19%, 0.21%, (0.56%), (0.54%), 0.01%, 0.04%, 0.05%, 0.09% and 3.25%, respectively.
(21)The rates associated with these undrawn committed revolvers and delayed draw term loans represent rates for commitment and unused fees.
(22)This security is included in the Cash and Cash Equivalents on the Statements of Assets and Liabilities.

See notes to financial statements.
115

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
(23)As of March 31, 2021, the Company had the following commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to issue letters of credit through a financial intermediary on behalf of certain portfolio companies. Such commitments are subject to the satisfaction of certain conditions set forth in the documents governing these loans and letters of credit and there can be no assurance that such conditions will be satisfied. See Note 10 to the financial statements for further information on revolving and delayed draw loan commitments, including commitments to issue letters of credit, related to certain portfolio companies.
Name of IssuerTotal CommitmentDrawn CommitmentLetters of CreditUndrawn Commitment
A&V Holdings Midco, LLC$1,505 $— $— $1,505 
Akoya Biosciences, Inc.1,500 — — 1,500 
Amerivet Partners Management, Inc.5,325 524 — 4,801 
AMI US Holdings Inc.2,907 2,093 — 814 
Analogic Corporation1,826 — — 1,826 
AQ Sunshine, Inc.5,787 471 38 5,278 
Arthur Bidco Limited*2,029 2,029 — — 
AVAD Canada Ltd.284 284 — — 
AVAD, LLC3,744 3,744 — — 
Banner Buyer, LLC7,032 387 — 6,645 
BIG Buyer, LLC1,805 722 — 1,083 
BK Medical Holding Company, Inc.783 — — 783 
Cerus Corporation5,500 125 — 5,375 
ChyronHego Corporation6,000 2,406 — 3,594 
Claritas, LLC1,031 129 — 902 
Compu-Link Corporation2,273 — — 2,273 
Continuum Global Solutions, LLC20,000 5,317 — 14,683 
Eagle Foods Family Group, LLC3,750 750 — 3,000 
EHL Merger Sub, LLC4,155 — — 4,155 
Eldrickco Limited*5,919 491 — 5,428 
Erickson Inc36,000 30,469 1,440 4,091 
Exeter Property Group, LLC192 — — 192 
First Heritage Credit, LLC12,000 747 — 11,253 
Flock SPV I, LLC5,467 — — 5,467 
Florida Food Products, LLC1,712 479 — 1,233 
FPG Services, LLC5,874 — — 5,874 
Gabriel Partners, LLC665 443 — 222 
GB001, Inc.24,000 — — 24,000 
Genesis Healthcare, Inc.91,957 — — 91,957 
Go Car Wash Management Corp.3,158 — — 3,158 
Gutter Buyer, Inc.2,782 409 39 2,334 
Heniff Holdco, LLC3,925 3,565 355 
HSI Halo Acquisition, Inc.812 135 — 677 
IMA Group Management Company, LLC289 289 — — 
Jacent Strategic Merchandising3,500 2,567 — 933 
JF Acquisition, LLC1,569 1,255 — 314 
Kauffman Intermediate, LLC1,786 466 155 1,165 
KDC US Holdings*6,021 2,696 55 3,270 
Kindeva Drug Delivery L.P.167 50 — 117 
KL Charlie Acquisition Company6,569 — — 6,569 
Kure Pain Holdings, Inc.2,654 — — 2,654 
See notes to financial statements.
116

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Name of IssuerTotal CommitmentDrawn CommitmentLetters of CreditUndrawn Commitment
Lash OpCo, LLC697 — — 697 
LendingPoint LLC7,125 1,000 — 6,125 
Lifelong Learner Holdings, LLC5,373 1,039 — 4,334 
Liqui-Box Holdings, Inc.*3,568 2,326 81 1,161 
Magnate Holding Corp.3,331 2,970 140 221 
Mannkind Corporation8,667 — — 8,667 
Margaux Acquisition Inc.1,601 — — 1,601 
Margaux UK Finance Limited*747 — — 747 
Marlin DTC-LS Midco 2, LLC685 — — 685 
Maxor National Pharmacy Services, LLC1,558 — — 1,558 
Medical Guardian, LLC11,429 — — 11,429 
MEP-TS Midco, LLC1,452 — — 1,452 
Merx Aviation Finance, LLC190,677 190,500 177 — 
Nemo (BC) Bidco Pty Ltd*177 — — 177 
New Amsterdam Software BidCo LLC2,250 — — 2,250 
Norvax, LLC3,182 — — 3,182 
Nutrisystem, Inc.200 — — 200 
NW Entertainment, Inc.3,061 3,061 — — 
Olaplex, Inc.2,300 — — 2,300 
Omnitracs, LLC3,750 — — 3,750 
Orchard Therapeutics plc16,667 — — 16,667 
Ortega National Parks, LLC7,568 — — 7,568 
Pace Health Companies, LLC1,075 — 105 970 
Paper Source, Inc.4,679 3,082 — 1,597 
PHS Buyer, Inc.2,000 — — 2,000 
Project Comfort Buyer, Inc.3,462 — — 3,462 
Protein For Pets Opco, LLC2,219 — — 2,219 
Purchasing Power Funding I, LLC9,113 8,384 — 729 
RA Outdoors, LLC1,200 — — 1,200 
Radius Health, Inc.5,833 — — 5,833 
Rapid Displays Acquisition Corporation3,462 — — 3,462 
RiteDose Holdings I, Inc.2,000 — — 2,000 
Royton Bidco Limited*3,125 — — 3,125 
SI Holdings, Inc.3,413 853 — 2,560 
Simeio Group Holdings, Inc.6,346 — — 6,346 
Simplifi Holdings, Inc.2,400 1,440 — 960 
Sirsi Corporation429 — — 429 
Soliant Holdings, LLC1,936 — — 1,936 
Sonar Entertainment, Inc.22,831 3,304 — 19,527 
Springbrook Holding Company, LLC5,122 — — 5,122 
Telesoft Holdings, LLC2,273 — — 2,273 
Telnyx LLC4,750 — — 4,750 
Ten-X, LLC4,680 4,680 — — 
TGG TS Acquisition Company1,750 — — 1,750 
The Emmes Company, LLC2,449 — — 2,449 
See notes to financial statements.
117

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Name of IssuerTotal CommitmentDrawn CommitmentLetters of CreditUndrawn Commitment
THLP CO. LLC7,304 2,360 — 4,944 
TNT Crust LLC3,252 1,138 — 2,114 
Truck-Lite Co., LLC3,052 1,526 94 1,432 
Turbo Buyer, Inc.923 — — 923 
U.S. Auto Finance, Inc.21,556 6,734 — 14,822 
USLS Acquisition, Inc.2,278 — 100 2,178 
Westfall Technik, Inc.2,019 1,750 — 269 
Wildcat BuyerCo, Inc.2,754 — 2,746 
Naviga Inc. (fka Newscycle Solutions, Inc.)1,782 240 — 1,542 
Surf Opco, LLC16,667 1,667 — 15,000 
Digital.ai Software Holdings, Inc.2,419 — — 2,419 
Midwest Vision Partners Management, LLC4,281 — — 4,281 
Pro-Vigil Holding Company, LLC2,000 — — 2,000 
Sontiq, Inc.833 — — 833 
Total Commitments$737,986 $301,096 $2,787 $434,103 
____________________
* These investments are in a foreign currency and the total commitment has been converted to USD using the March 31, 2021 exchange rate.
(24)As of March 31, 2021, Dynamic Product Tankers, LLC had various classes of limited liability interests outstanding of which the Company holds Class A-1 and Class A-3 units which are identical except that Class A-1 unit is voting and Class A-3 unit is non-voting. The units entitle the Company to appoint three out of five managers to the board of managers.
See notes to financial statements.
118

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)

(25)Securities that are exempt from registration under the Securities Act of 1933 (the “Securities Act”), and may be deemed to be “restricted securities” under the Securities Act. As of March 31, 2021, the aggregate fair value of these securities is $259,991 or 25% of the Company's net assets. The acquisition dates of the restricted securities are as follows:
IssuerInvestment TypeAcquisition Date
1244311 B.C. Ltd.Common Equity - Common Stock9/30/2020
AIC SPV Holdings II, LLCPreferred Equity - Preferred Stock6/1/2017
Carbonfree Chemicals Holdings LLCCommon Equity - Common Equity / Interest11/19/2019
Carbonfree Chemicals SA LLCCommon Equity - Class B Units11/19/2019
ChyronHego CorporationPreferred Equity - Preferred Equity12/29/2020
Dynamic Product Tankers, LLCCommon Equity - Class A Units4/3/2015
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.)Common Equity - Common Stock3/29/2016
JSM Equity Investors, L.P.Preferred Equity - Class P Partnership Units6/30/2020
KL Charlie Co-Invest, L.P.Common Equity - Common Stock12/29/2020
Merx Aviation Finance, LLCCommon Equity - Membership Interests5/22/2013
MSEA Tankers LLCCommon Equity - Class A Units12/12/2014
Paper Source, Inc.Preferred Equity - Preferred Equity9/11/2020
Paper Source, Inc.Common Equity - Class A Common Stock10/30/2020
Pelican Energy, LLCCommon Equity - Membership Interests2/16/2016
Renew Financial LLC (f/k/a Renewable Funding, LLC)Preferred Equity - Series E Preferred Stock12/23/2020
Renew Financial LLC (f/k/a Renewable Funding, LLC)Preferred Equity - Series D Preferred Stock10/1/2015
Renew Financial LLC (f/k/a Renewable Funding, LLC)Preferred Equity - Series B Preferred Stock4/9/2014
Renew JV LLCCommon Equity - Membership Interests3/20/2017
SHD Oil & Gas, LLCCommon Equity - Series A Units11/18/2016
Surf Opco, LLCPreferred Equity - Class P-1 Preferred3/17/2021
Surf Opco, LLCPreferred Equity - Class P-2 Preferred3/17/2021
Surf Opco, LLCCommon Equity - Class A-1 Common3/17/2021
See notes to financial statements.
119

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
(26)The following shows the composition of the Company’s portfolio at cost by control designation, investment type and industry as of March 31, 2021:
IndustryFirst Lien - Secured DebtSecond Lien - Secured DebtUnsecured DebtStructured Products and OtherPreferred EquityCommon Equity/InterestsWarrantsTotal
Non-Controlled / Non-Affiliated Investments
 Advertising, Printing & Publishing $57,553 $— $— $— $— $219 $— $57,772 
 Aerospace & Defense 30,368 — — — — — — 30,368 
 Automotive 30,794 23,549 — — — 350 — 54,693 
 Aviation and Consumer Transport 17,229 — — — — — — 17,229 
 Beverage, Food & Tobacco 95,289 — — — — 2,205 97,494 
 Business Services 221,162 109,995 — — 89 1,432 — 332,678 
 Chemicals, Plastics & Rubber 17,315 12,165 — — — — — 29,480 
 Construction & Building 28,603 — — — — 500 — 29,103 
 Consumer Goods – Durable 22,237 — — — — 107 — 22,344 
 Consumer Goods – Non-Durable 78,873 12,777 — — 462 — — 92,112 
 Consumer Services 120,845 — — — — — — 120,845 
 Diversified Investment Vehicles, Banking, Finance, Real Estate 50,632 — — — — — — 50,632 
 Education 36,161 — — — — — — 36,161 
 Energy – Electricity 7,637 — — — 5,623 — 13,264 
 Environmental Industries 11,347 — — — — — — 11,347 
 Healthcare & Pharmaceuticals 325,747 63,274 — — 333 1,064 211 390,629 
 High Tech Industries 251,601 — — — — — — 251,601 
 Insurance 34,744 — — — — — — 34,744 
 Manufacturing, Capital Equipment 21,345 7,947 — — 11,849 250 — 41,391 
 Media – Diversified & Production 43,968 — — — — — — 43,968 
 Retail 41,803 — — — — — — 41,803 
 Telecommunications 11,382 12,804 — — — — — 24,186 
 Transportation – Cargo, Distribution 33,749 — — — — — — 33,749 
Wholesale12,964 — — — — 516 — 13,480 
Total Non-Controlled / Non-Affiliated Investments$1,603,348 $242,511 $— $— $18,356 $6,647 $211 $1,871,073 
Non-Controlled / Affiliated Investments
Chemicals, Plastics & Rubber$— $— $— $— $— $77,825 $— $77,825 
Consumer Goods – Durable4,009 — — — — 1,000 — 5,009 
Diversified Investment Vehicles, Banking, Finance, Real Estate— — — 16,812 — — — 16,812 
Energy – Electricity— — — — 16,347 671 — 17,018 
Energy – Oil & Gas— — — — — 16,764 — 16,764 
Manufacturing, Capital Equipment— — — — — — — — 
Total Non-Controlled / Affiliated Investments$4,009 $— $— $16,812 $16,347 $96,260 $— $133,428 
See notes to financial statements.
120

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
IndustryFirst Lien - Secured DebtSecond Lien - Secured DebtUnsecured DebtStructured Products and OtherPreferred EquityCommon Equity/InterestsWarrantsTotal
Controlled Investments
Aviation and Consumer Transport$190,500 $— $— $— $— $120,300 $— $310,800 
Energy – Oil & Gas113,167 36,926 — — — 31,489 — 181,582 
High Tech Industries84,050 — — — 6,000 — — 90,050 
Transportation – Cargo, Distribution— — 22,000 — — 107,466 — 129,466 
Total Controlled Investments$387,717 $36,926 $22,000 $— $6,000 $259,255 $— $711,898 
Total$1,995,074 $279,437 $22,000 $16,812 $40,703 $362,162 $211 $2,716,399 


See notes to financial statements.
121

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)

(27)The following shows the composition of the Company’s portfolio at fair value by control designation, investment type and industry as of March 31, 2021:
IndustryFirst Lien - Secured DebtSecond Lien - Secured DebtUnsecured DebtStructured Products and OtherPreferred EquityCommon Equity/InterestsWarrantsTotal % of Net Assets
Non-Controlled / Non-Affiliated Investments
 Advertising, Printing & Publishing $57,672 $— $— $— $— $239 $— $57,911 5.6 %
 Aerospace & Defense 29,930 — — — — — — 29,930 3.0 %
 Automotive 29,976 21,982 — — — 345 — 52,303 5.0 %
 Aviation and Consumer Transport 17,088 — — — — — — 17,088 1.6 %
 Beverage, Food & Tobacco 95,644 — — — — 2,972 — 98,616 9.6 %
 Business Services 220,550 102,050 — — 89 1,161 — 323,850 31.2 %
 Chemicals, Plastics & Rubber 17,050 13,307 — — — — — 30,357 3.0 %
 Construction & Building 28,378 — — — — 1,128 — 29,506 2.8 %
 Consumer Goods – Durable 22,380 — — — — 625 — 23,005 2.2 %
 Consumer Goods – Non-durable 78,442 10,536 — — 212 — — 89,190 8.6 %
 Consumer Services 117,999 — — — — — — 117,999 11.4 %
 Diversified Investment Vehicles, Banking, Finance, Real Estate 50,481 — — — — — — 50,481 4.9 %
 Education 41,159 — — — — — — 41,159 4.0 %
 Energy – Electricity 2,534 — — — — — — 2,534 0.2 %
 Environmental Industries 10,825 — — — — — — 10,825 1.0 %
 Healthcare & Pharmaceuticals 328,253 62,865 — — 416 1,346 1,595 394,475 38.1 %
 High Tech Industries 250,200 — — — — — — 250,200 24.1 %
 Insurance 35,411 — — — — — — 35,411 3.4 %
 Manufacturing, Capital Equipment 19,939 7,619 — — 9,995 266 — 37,819 3.6 %
 Media – Diversified & Production 41,206 — — — — — — 41,206 4.0 %
 Retail 41,870 — — — — — — 41,870 4.0 %
 Telecommunications 10,661 11,139 — — — — — 21,800 2.1 %
 Transportation – Cargo, Distribution 33,528 — — — — — — 33,528 3.2 %
 Wholesale 13,038 — — — — 526 — 13,564 1.3 %
Total Non-Controlled / Non-Affiliated Investments$1,594,214 $229,498 $— $— $10,712 $8,608 $1,595 $1,844,627 177.9 %
% of Net Assets153.8 %22.1 %— %— %1.0 %0.8 %0.2 %177.9 %
See notes to financial statements.
122

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
IndustryFirst Lien - Secured DebtSecond Lien - Secured DebtUnsecured DebtStructured Products and OtherPreferred EquityCommon Equity/InterestsWarrantsTotal % of Net Assets
Non-Controlled / Affiliated Investments
Chemicals, Plastics & Rubber$— $— $— $— $— $25,424 $— $25,424 2.5 %
Consumer Goods – Durable3,822 — — — — 1,719 — 5,541 0.5 %
Diversified Investment Vehicles, Banking, Finance, Real Estate— — — 11,289 — — — 11,289 1.1 %
Energy – Electricity— — — — 5,674 776 — 6,450 0.6 %
Energy – Oil & Gas— — — — — 2,170 — 2,170 0.2 %
Manufacturing, Capital Equipment— — — — — — — — — %
Total Non-Controlled / Affiliated Investments$3,822 $— $— $11,289 $5,674 $30,089 $— $50,874 4.9 %
% of Net Assets0.4 %— %— %1.1 %0.5 %2.9 %— %4.9 %
Controlled Investments
Aviation and Consumer Transport$190,500 $— $— $— $— $125,061 $— $315,561 30.4 %
Energy – Oil & Gas35,369 8,111 — — — — — 43,480 4.2 %
High Tech Industries83,902 — — — 6,151 — — 90,053 8.7 %
Transportation – Cargo, Distribution— — 22,000 — — 82,556 — 104,556 10.1 %
Total Controlled Investments$309,771 $8,111 $22,000 $— $6,151 $207,617 $— $553,650 53.4 %
% of Net Assets29.9 %0.8 %2.1 %— %0.6 %20.0 %— %53.4 %
Total$1,907,807 $237,609 $22,000 $11,289 $22,537 $246,314 $1,595 $2,449,151 236.2 %
% of Net Assets184.1 %22.9 %2.1 %1.1 %2.1 %23.7 %0.2 %236.2 %















See notes to financial statements.
123

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2021
(In thousands, except share data)
Industry ClassificationPercentage of Total Investments (at Fair Value) as of March 31, 2021
Healthcare & Pharmaceuticals16.1%
High Tech Industries13.9%
Aviation and Consumer Transport13.6%
Business Services13.2%
Transportation – Cargo, Distribution5.6%
Consumer Services4.8%
Beverage, Food & Tobacco4.0%
Consumer Goods – Non-durable3.6%
Diversified Investment Vehicles, Banking, Finance, Real Estate2.5%
Advertising, Printing & Publishing2.4%
Chemicals, Plastics & Rubber2.3%
Automotive2.1%
Energy – Oil & Gas1.9%
Retail1.7%
Media – Diversified & Production1.7%
Education1.7%
Manufacturing, Capital Equipment1.5%
Insurance1.5%
Aerospace & Defense1.2%
Construction & Building1.2%
Consumer Goods – Durable1.2%
Telecommunications0.9%
Wholesale0.6%
Environmental Industries0.4%
Energy – Electricity0.4%
Total Investments100.0%
See notes to financial statements.
124

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)

Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
Advertising, Printing & Publishing
Learfield Communications
A-L Parent LLCSecond Lien Secured Debt8.25% (1M L+725, 1.00% Floor)12/02/24$5,536 $5,503 $4,882 
Simplifi Holdings, Inc.
Simplifi Holdings, Inc.First Lien Secured Debt7.20% (3M L+575, 1.00% Floor)08/02/2538,829 38,188 37,164 (9)
First Lien Secured Debt - Revolver7.20% (1M L+575, 1.00% Floor)08/02/251,200 1,200 1,148 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded08/02/251,200 (49)(51)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.50% Unfunded08/02/256,091 (57)(187)(8)(9)
(21)(23)
39,282 38,074 
Total Advertising, Printing & Publishing$44,785 $42,956 
Aerospace & Defense
Erickson Inc
Erickson IncFirst Lien Secured Debt - Revolver9.41% (3M L+750, 1.50% Floor)04/28/22$31,812 $31,812 $31,096 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded04/28/227,425 (233)(167)(8)(9)
(21)(23)
First Lien Secured Debt - Letters of Credit7.50%04/30/20 - 07/15/221,263 — (27)(8)(9)
(23)
31,579 30,902 
PAE Holding Corporation
PAE Holding CorporationSecond Lien Secured Debt10.50% (1M L+950, 1.00% Floor)10/20/2313,637 13,462 12,353 
Total Aerospace & Defense$45,041 $43,255 
Automotive
Accelerate Parent Corp. (American Tire)
Accelerate Parent Corp.Common Equity/Interests - Common StockN/AN/A1,664,046 Shares1,714 250 (13)(19)
Arlington
Arlington Industries Group LimitedFirst Lien Secured Debt5.75% (1M E+525, 0.50% Floor)03/29/243,189 3,572 3,309 (9)(17)
First Lien Secured Debt5.87% (1M GBPL+525, 0.50% Floor)03/29/24£7,818 9,972 9,204 (9)(17)
First Lien Secured Debt - Unfunded Revolver1.25% Unfunded03/29/24£2,700 (57)(191)(8)(9)
(17)(21)
(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded03/29/24£1,300 (28)(77)(8)(9)
(17)(21)
(23)
13,459 12,245 
Crowne Automotive
Vari-Form Group, LLCFirst Lien Secured DebtL+11.00% (7.00% Cash plus 4.00% PIK)02/02/235,859 937 762 (9)(13)
(14)
Vari-Form Inc.First Lien Secured DebtL+11.00% (7.00% Cash plus 4.00% PIK)02/02/232,110 391 274 (9)(13)
(14)
1,328 1,036 
K&N Parent, Inc.
K&N Parent, Inc.Second Lien Secured Debt9.82% (3M L+875, 1.00% Floor)10/21/2423,765 23,489 22,220 
See notes to financial statements.
125

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
Truck-Lite Co., LLC
Truck-Lite Co., LLCFirst Lien Secured Debt7.32% (6M L+625, 1.00% Floor)12/14/2625,148 24,573 24,446 (9)
First Lien Secured Debt - Revolver7.25% (1M L+625, 1.00% Floor)12/13/241,308 1,308 1,277 (9)(23)
First Lien Secured Debt - Revolver7.32% (6M L+625, 1.00% Floor)12/13/24654 654 638 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/13/241,005 (67)(24)(8)(9)
(21)(23)
First Lien Secured Debt - Letters of Credit7.25%11/30/20 - 12/21/2085 — (2)(8)(9)
(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded12/14/263,707 (84)(103)(8)(9)
(21)(23)
TL Lighting Holdings, LLCCommon Equity/Interests - Class A Common UnitsN/AN/A350 Shares350 241 (9)(13)
26,734 26,473 
Total Automotive$66,724 $62,224 
Aviation and Consumer Transport
Merx Aviation Finance, LLC
Merx Aviation Finance, LLC (5)First Lien Secured Debt - Revolver12.00%10/31/23$305,300 $305,300 $305,300 (23)
First Lien Secured Debt - Letter of Credit2.25%07/13/20177 — — (23)
Common Equity/Interests - Membership InterestsN/AN/AN/A15,000 28,447 
320,300 333,747 
PrimeFlight
PrimeFlight Aviation Services, Inc.First Lien Secured Debt6.50% (1M L+550, 1.00% Floor)05/09/2413,367 13,184 12,790 (9)
First Lien Secured Debt7.02% (1M L+550, 1.00% Floor)05/09/241,375 1,362 1,316 (9)
First Lien Secured Debt - Unfunded Delayed Draw0.50% Unfunded05/09/242,842 (85)(122)(8)(9)
(21)(23)
14,461 13,984 
Total Aviation and Consumer Transport$334,761 $347,731 
Beverage, Food & Tobacco
Bolthouse Farms
Wm. Bolthouse Farms, Inc.Common Equity/Interests - Common StockN/AN/A1,000,000 Shares$1,000 $940 (13)
Eagle Foods
Eagle Foods Family Group, LLCFirst Lien Secured Debt8.68% (6M L+675, 1.00% Floor)06/14/24$24,562 24,369 23,703 (9)
First Lien Secured Debt - Revolver7.75% (1M L+675, 1.00% Floor)06/14/23167 167 161 (9)(23)
First Lien Secured Debt - Revolver7.75% (3M L+675, 1.00% Floor)06/14/23333 333 322 (9)(23)
First Lien Secured Debt - Revolver7.95% (3M L+675, 1.00% Floor)06/14/23167 167 161 (9)(23)
First Lien Secured Debt - Revolver8.36% (6M L+675, 1.00% Floor)06/14/23667 667 643 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded06/14/232,417 (27)(85)(8)(9)
(21)(23)
25,676 24,905 
See notes to financial statements.
126

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
Florida Food Products, Inc.
Florida Food Products, Inc.First Lien Secured Debt8.20% (3M L+675, 1.00% Floor)09/08/2522,938 22,492 22,594 (9)
Florida Food Products, LLCFirst Lien Secured Debt - Revolver7.75% (1M L+675, 1.00% Floor)09/06/23240 240 236 (9)(23)
First Lien Secured Debt - Revolver8.20% (3M L+675, 1.00% Floor)09/06/231,473 1,443 1,450 (9)(23)
24,175 24,280 
Orgain, Inc.
Butterfly Fighter Co-Invest, L.P.Common Equity/Interests - Membership InterestsN/AN/A1,000,000 Shares1,000 1,000 (13)
TNT Crust LLC
TNT Crust LLCFirst Lien Secured Debt7.75% (1M L+675, 1.00% Floor)11/06/2320,618 20,318 20,102 (9)
First Lien Secured Debt8.01% (1M L+675, 1.00% Floor)11/06/234,878 4,785 4,756 (9)
First Lien Secured Debt - Revolver7.75% (1M L+675, 1.00% Floor)11/06/23748 748 729 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded11/06/232,504 (50)(63)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded11/06/23976 (43)(24)(8)(9)
(21)(23)
Common Equity/Interests - Series A UnitsN/AN/A244 Shares30 275 (9)(13)
25,788 25,775 
Turkey Hill
IC Holdings LLCCommon Equity/Interests - Series A UnitsN/AN/A169 Shares169 153 (9)(13)
THLP CO. LLCFirst Lien Secured Debt6.50% (1M L+550, 1.00% Floor)05/30/2519,562 19,225 19,268 (9)
First Lien Secured Debt - Revolver7.75% (P+450)05/31/242,247 2,247 2,213 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded05/31/242,247 (75)(34)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded05/30/255,618 (33)(84)(8)(9)
(21)(23)
21,533 21,516 
Total Beverage, Food & Tobacco$99,172 $98,416 
Business Services
Access Information
Access CIG, LLCSecond Lien Secured Debt9.53% (3M L+775)02/27/26$15,900 $15,789 $15,299 
Ambrosia Buyer Corp.
Ambrosia Buyer Corp.Second Lien Secured Debt9.08% (3M L+800, 1.00% Floor)08/28/2521,429 21,066 17,751 
Claritas
Claritas, LLCFirst Lien Secured Debt7.45% (3M L+600, 1.00% Floor)12/21/233,845 3,815 3,787 (9)
First Lien Secured Debt - Revolver7.00% (1M L+600, 1.00% Floor)12/21/23619 619 609 (9)(23)
First Lien Secured Debt - Revolver7.26% (1M L+600, 1.00% Floor)12/21/23129 129 127 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/21/23284 (8)(4)(8)(9)
(21)(23)
4,555 4,519 
Continuum
Continuum Global Solutions, LLCFirst Lien Secured Debt - Revolver7.08% (1M L+550, 1.00% Floor)02/15/228,791 8,791 8,527 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded02/15/2211,209 (304)(336)(8)(9)
(21)(23)
See notes to financial statements.
127

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
Preferred Equity - Preferred StockN/AN/A775 Shares78 78 (9)(13)
8,565 8,269 
CT Technologies Intermediate Holdings, Inc
CT Technologies Intermediate Holdings, IncSecond Lien Secured Debt10.45% (3M L+900, 1.00% Floor)12/01/2231,253 30,803 27,815 (9)
Education Personnel
Education PersonnelFirst Lien Secured Debt5.42% (3M GBPL+475, 0.50% Floor)08/31/24£4,076 5,190 4,790 (9)(17)
First Lien Secured Debt - Revolver5.42% (3M GBPL+475, 0.50% Floor)08/31/24£1,471 1,873 1,727 (9)(17)
(23)
7,063 6,517 
Electro Rent Corporation
Electro Rent CorporationSecond Lien Secured Debt10.64% (3M L+900, 1.00% Floor)01/31/2534,235 33,546 33,208 (9)
Elo Touch
TGG TS Acquisition CompanyFirst Lien Secured Debt - Revolver7.40% (3M L+650)12/14/23500 500 480 (23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/14/231,250 — (50)(8)(21)
(23)
500 430 
Ensemble Health
EHL Merger Sub, LLCFirst Lien Secured Debt - Revolver6.00% (P+275)08/01/241,662 1,662 1,512 (23)
First Lien Secured Debt - Unfunded Revolver0.25% Unfunded08/01/242,493 (330)(224)(8)(21)
(23)
1,332 1,288 
Jacent
Jacent Strategic MerchandisingFirst Lien Secured Debt7.36% (3M L+575, 1.00% Floor)04/23/2422,579 22,304 21,315 (9)
First Lien Secured Debt - Revolver7.36% (3M L+575, 1.00% Floor)04/23/241,400 1,400 1,320 (9)(23)
First Lien Secured Debt - Revolver6.82% (3M L+575, 1.00% Floor)04/23/24467 467 440 (9)(23)
First Lien Secured Debt - Revolver7.53% (3M L+575, 1.00% Floor)04/23/24700 700 660 (9)(23)
First Lien Secured Debt - Revolver6.75% (3M L+575, 1.00% Floor)04/23/24933 891 880 (9)(23)
Common Equity - Common StockN/AN/A5,000 Shares500 204 (9)(13)
26,262 24,819 
Jones & Frank
JF Acquisition, LLCFirst Lien Secured Debt6.77% (3M L+550, 1.00% Floor)07/31/245,272 5,179 5,087 (9)
First Lien Secured Debt7.28% (3M L+550, 1.00% Floor)07/31/248,118 7,977 7,832 (9)
First Lien Secured Debt - Revolver6.50% (1M L+550, 1.00% Floor)07/31/24628 600 605 (9)(23)
First Lien Secured Debt - Revolver7.28% (3M L+550, 1.00% Floor)07/31/24188 188 182 (9)(23)
First Lien Secured Debt - Revolver7.75% (P+450)07/31/24753 753 726 (9)(23)
14,697 14,432 
MAKS
Trident Bidco LimitedFirst Lien Secured Debt7.25% (1M L+625, 1.00% Floor)11/08/2535,000 34,019 33,649 (9)(17)
See notes to financial statements.
128

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
McLarens
Margaux Acquisition Inc.First Lien Secured Debt7.41% (3M L+550, 1.00% Floor)12/19/2418,800 18,526 17,800 (9)
First Lien Secured Debt - Revolver6.50% (1M L+550, 1.00% Floor)12/19/241,601 1,576 1,516 (9)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded12/19/244,461 (92)(236)(8)(9)
(21)(23)
Margaux UK Finance LimitedFirst Lien Secured Debt6.50% (3M GBPL+550, 1.00% Floor)12/19/24£5,896 7,332 6,930 (9)(17)
First Lien Secured Debt - Revolver6.50% (1M GBPL+550, 1.00% Floor)12/19/24£538 632 631 (9)(17)
(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/19/24£(11)— (8)(9)
(17)(21)
(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded12/19/24£1,353 (27)(89)(8)(9)
(17)(21)
(23)
27,936 26,552 
Ministry Brands, LLC
Ministry Brands, LLCSecond Lien Secured Debt10.51% (2M L+925, 1.00% Floor)06/02/2310,000 9,925 9,795 
Newscycle Solutions, Inc.
Newscycle Solutions, Inc.First Lien Secured Debt8.45% (3M L+700, 1.00% Floor)12/29/2214,641 14,434 14,202 (9)
First Lien Secured Debt8.58% (3M L+700, 1.00% Floor)12/29/221,131 1,121 1,097 (9)
First Lien Secured Debt - Revolver8.00% (1M L+700, 1.00% Floor)12/29/2240 33 39 (9)(23)
First Lien Secured Debt - Revolver8.45% (1M L+700, 1.00% Floor)12/29/22460 460 446 (9)(23)
16,048 15,784 
PSI Services, LLC
Lifelong Learner Holdings, LLCFirst Lien Secured Debt6.75% (1M L+575, 1.00% Floor)10/19/2632,865 32,234 31,334 (9)
First Lien Secured Debt - Revolver6.75% (3M L+575, 1.00% Floor)10/20/25478 478 457 (9)(23)
First Lien Secured Debt - Revolver6.87% (3M L+575, 1.00% Floor)10/20/251,373 1,373 1,315 (9)(23)
First Lien Secured Debt - Revolver7.33% (3M L+575, 1.00% Floor)10/20/25239 239 229 (9)(23)
First Lien Secured Debt - Revolver7.71% (3M L+575, 1.00% Floor)10/20/25299 299 286 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded10/20/25597 (55)(25)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded10/19/262,388 (18)(111)(8)(9)
(21)(23)
34,550 33,485 
RA Outdoors, LLC (Active Outdoors)
RA Outdoors, LLCFirst Lien Secured Debt5.82% (6M L+475, 1.00% Floor)09/11/246,626 6,542 6,428 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded09/09/221,200 (12)(24)(8)(9)
(21)(23)
Second Lien Secured Debt9.82% (6M L+875, 1.00% Floor)09/11/2531,950 31,404 30,352 (9)
37,934 36,756 
Soliant
Soliant Holdings, LLCFirst Lien Secured Debt6.50% (1M L+550, 1.00% Floor)12/31/2618,064 17,715 17,587 (9)
First Lien Secured Debt - Revolver6.50% (1M L+550, 1.00% Floor)12/31/24323 323 310 (9)(23)
See notes to financial statements.
129

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/31/241,614 (37)(62)(8)(9)
(21)(23)
Soliant Health, Inc.Common Equity/Interests - Common StockN/AN/A300 Shares300 300 (9)(13)
18,301 18,135 
Transplace Holdings, Inc.
Transplace Holdings, Inc.Second Lien Secured Debt9.82% (3M L+875, 1.00% Floor)10/06/258,599 8,449 8,169 
US Legal Support
US Legal Support Investment Holdings, LLCCommon Equity/Interests - Series A-1 UnitsN/AN/A631,972 Shares632 623 (9)(13)
USLS Acquisition, Inc.First Lien Secured Debt6.82% (6M L+575, 1.00% Floor)12/02/2424,498 24,111 23,630 (9)
First Lien Secured Debt - Revolver6.82% (6M L+575)12/02/241,522 1,497 1,436 (9)(23)
First Lien Secured Debt - Letters of Credit5.75%06/06/20 - 12/21/2086 — (5)(8)(9)
(23)
26,240 25,684 
Vertafore
Vertafore, Inc.First Lien Secured Debt - Unfunded Revolver0.50% Unfunded06/30/2314,576 (1,121)(1,676)(8)(21)
(23)
First Lien Secured Debt - Letter of Credit3.25%01/17/21424 — (49)(8)(23)
(1,121)(1,725)
Total Business Services$376,459 $360,631 
Chemicals, Plastics & Rubber
Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC)
Carbonfree Caustic SPE LLC (4)First Lien Secured Debt5.00%12/31/24$13,111 $13,111 $13,111 
Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC) (4)First Lien Secured Debt3.00%12/31/2417,057 17,057 4,389 
Carbonfree Chemicals Holdings LLC (4)Common Equity/Interests - Common StockN/AN/A1,446 Shares30,886 15,105 (13)
Carbonfree Chemicals SA LLC (4)Common Equity/Interests - Class B UnitsN/AN/A1,313 Shares15,403 — (13)
76,457 32,605 
Niacet Corporation
Hare Bidco, Inc.Second Lien Secured Debt9.75% (1M E+875)08/01/2413,574 14,506 14,671 
Westfall Technik, Inc.
Westfall Technik, Inc.First Lien Secured Debt7.20% (3M L+575, 1.00% Floor)09/13/2415,268 15,033 14,839 (9)
First Lien Secured Debt7.02% (3M L+575, 1.00% Floor)09/13/24671 665 653 (9)
First Lien Secured Debt - Revolver7.21% (3M L+550, 1.00% Floor)09/13/24135 105 131 (9)(23)
First Lien Secured Debt - Revolver8.00% (P+475)09/13/241,885 1,885 1,831 (9)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded09/13/2412,829 (112)(360)(8)(9)
(21)(23)
17,576 17,094 
Total Chemicals, Plastics & Rubber$108,539 $64,370 
See notes to financial statements.
130

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
Construction & Building
Englert
Gutter Buyer, Inc.First Lien Secured Debt7.25% (1M L+625, 1.00% Floor)03/06/25$26,915 $26,479 $25,873 (9)
First Lien Secured Debt - Revolver8.50% (P+525)03/06/242,727 2,674 2,621 (9)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded03/06/252,045 (42)(79)(8)(9)
(21)(23)
Gutter Holdings, LPCommon Equity/Interests - Common StockN/AN/A500 Shares500 558 (9)(13)
Total Construction & Building$29,611 $28,973 
Consumer Goods – Durable
A&V
A&V Holdings Midco, LLCFirst Lien Secured Debt5.75% (3M L+475, 1.00% Floor)03/10/27$11,137 $11,027 $11,027 
First Lien Secured Debt - Revolver5.50% (1M L+450, 1.00% Floor)03/10/25813 813 805 (23)
First Lien Secured Debt - Revolver5.50% (3M L+450, 1.00% Floor)03/10/2590 90 89 (23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded03/10/25602 (134)(6)(8)(21)
(23)
11,796 11,915 
Dan Dee
Project Comfort Buyer, Inc.First Lien Secured Debt8.00% (6M L+700, 1.00% Floor)02/03/2526,283 25,665 24,969 (9)
First Lien Secured Debt9.25% (P+600)02/03/25867 846 823 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded02/01/243,461 (80)(173)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.50% Unfunded02/03/252,308 (28)(115)(8)(9)
(21)(23)
Preferred Equity - Preferred StockN/AN/A461,538 Shares462 231 (9)(13)
26,865 25,735 
Hayward Industries, Inc.
Hayward Industries, Inc.Second Lien Secured Debt9.24% (1M L+825)08/04/2521,919 21,693 20,639 
KDC
KDC US HoldingsFirst Lien Secured Debt - Revolver5.50% (P+225)12/21/235,731 5,732 5,173 (23)
First Lien Secured Debt - Unfunded Revolver0.25% Unfunded12/21/23214 — (22)(8)(21)
(23)
First Lien Secured Debt - Letters of Credit3.25%11/06/20 - 03/08/2165 — (6)(8)(23)
First Lien Secured Debt - Letter of Credit3.25%02/05/21£10 — — (8)(23)
5,732 5,145 
KLO Holdings, LLC
9357-5991 Quebec Inc.First Lien Secured Debt11.82% (3M L+775 Cash plus 2.00% PIK)04/07/229,562 8,653 2,118 (13)(14)
KLO Acquisition LLCFirst Lien Secured Debt11.82% (3M L+775 Cash plus 2.00% PIK)04/07/225,373 4,838 30 (13)(14)
13,491 2,148 
See notes to financial statements.
131

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
NSi Industries
Wildcat BuyerCo, Inc.First Lien Secured Debt7.14% (3M L+550, 1.00% Floor)02/27/266,087 5,946 5,946 
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded02/27/26717 (16)(16)(8)(21)
(23)
First Lien Secured Debt - Letter of Credit5.50%08/30/20— — (23)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded02/27/263,188 (35)(72)(8)(21)
(23)
Wildcat Parent LPCommon Equity/Interests - Common StockN/AN/A1,000 Shares100 100 (13)
5,995 5,958 
Liqui-Box
Liqui-Box Holdings, Inc.First Lien Secured Debt - Revolver5.95% (3M L+450, 1.00% Floor)02/26/25475 475 470 (23)
First Lien Secured Debt - Revolver5.50% (3M L+450, 1.00% Floor)02/26/25712 712 705 (23)
First Lien Secured Debt - Revolver5.73% (3M L+450, 1.00% Floor)02/26/251,186 1,186 1,175 (23)
First Lien Secured Debt - Revolver5.77% (3M L+450, 1.00% Floor)02/26/25712 712 705 (23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded02/26/25401 (35)(4)(8)(21)
(23)
First Lien Secured Debt - Letters of Credit4.50%09/27/20 - 10/01/2032 — — (23)
First Lien Secured Debt - Letter of Credit4.50%06/30/2142 — — (23)
3,050 3,051 
Sorenson Holdings, LLC
Sorenson Holdings, LLCCommon Equity/Interests - Membership InterestsN/AN/A587 Shares— 418 (10)(13)
Total Consumer Goods – Durable$88,622 $75,009 
Consumer Goods – Non-durable
3D Protein
Protein For Pets Opco, LLCFirst Lien Secured Debt6.00% (1M L+500, 1.00% Floor)11/28/25$12,717 $12,495 $12,399 (9)
First Lien Secured Debt - Revolver6.22% (3M L+500, 1.00% Floor)05/31/24444 444 433 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded05/31/241,775 (48)(44)(8)(9)
(21)(23)
12,891 12,788 
Beauty Industry Group (BIG)
BIG Buyer, LLCFirst Lien Secured Debt7.57% (6M L+650, 1.00% Floor)11/20/2322,368 21,889 21,504 (9)
First Lien Secured Debt - Revolver7.57% (6M L+650, 1.00% Floor)11/20/23120 120 114 (9)(23)
First Lien Secured Debt - Revolver7.50% (1M L+650, 1.00% Floor)11/20/23602 602 570 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded11/20/231,083 (39)(57)(8)(9)
(21)(23)
22,572 22,131 
DMC
Lion Cashmere Midco LimitedFirst Lien Secured Debt6.75% (6M L+575, 1.00% Floor)03/21/2513,053 12,863 11,969 (9)(17)
First Lien Secured Debt - Revolver5.75% (3M E+525)03/21/24356 392 357 (9)(17)
(23)
First Lien Secured Debt - Revolver5.75% (6M E+525)03/21/24605 655 608 (9)(17)
(23)
See notes to financial statements.
132

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
First Lien Secured Debt - Revolver5.86% (6M GBPL+525)03/21/24225 247 226 (9)(17)
(23)
First Lien Secured Debt - Unfunded Delayed Draw2.01% Unfunded03/21/252,371 (39)(216)(8)(9)
(17)(21)
(23)
14,118 12,944 
Olaplex
Olaplex, Inc.First Lien Secured Debt7.50% (1M L+650, 1.00% Floor)01/08/2626,200 25,696 25,696 (9)
First Lien Secured Debt - Revolver7.50% (1M L+650, 1.00% Floor)01/08/253,800 3,727 3,724 (9)(23)
29,423 29,420 
Sequential Brands Group, Inc.
Sequential Brands Group, Inc.Second Lien Secured Debt9.75% (1M L+875)02/07/2412,965 $12,882 $12,289 (17)
Total Consumer Goods – Non-durable$91,886 $89,572 
Consumer Services
1A Smart Start LLC
1A Smart Start LLCSecond Lien Secured Debt9.32% (3M L+825, 1.00% Floor)08/22/22$25,100 $24,842 $24,282 
Clarus Commerce
Marlin DTC-LS Midco 2, LLCFirst Lien Secured Debt6.57% (6M L+550, 1.00% Floor)07/01/259,245 9,103 8,806 
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded07/01/25685 (10)(33)(8)(21)
(23)
9,093 8,773 
First Heritage
First Heritage Credit, LLCFirst Lien Secured Debt6.33% (1M L+475)04/02/2218,450 18,340 17,959 (9)
First Lien Secured Debt - Revolver7.08% (1M L+550)04/02/22517 517 504 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded04/02/223,233 (25)(83)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.50% Unfunded04/02/227,800 (65)(207)(8)(9)
(21)(23)
18,767 18,173 
Only About Children
Nemo (BC) Bidco Pty LtdFirst Lien Secured Debt6.75% (1M BBSW+575, 1.00% Floor)04/06/24A$6,768 4,923 3,894 (17)
First Lien Secured Debt - Unfunded Delayed Draw2.59% Unfunded04/06/24A$232 (7)(9)(8)(17)
(21)(23)
4,916 3,885 
Paper Source
Paper Source, Inc.First Lien Secured Debt8.78% (3M L+700, 1.00% Floor)05/22/2411,620 11,427 10,981 (9)
First Lien Secured Debt - Revolver9.25% (P+600)05/22/241,890 1,890 1,786 (9)(23)
First Lien Secured Debt - Revolver8.70% (3M L+700, 1.00% Floor)05/22/24205 154 194 (9)(23)
First Lien Secured Debt - Revolver8.74% (3M L+700, 1.00% Floor)05/22/24411 411 388 (9)(23)
First Lien Secured Debt - Revolver8.83% (3M L+700, 1.00% Floor)05/22/24205 205 194 (9)(23)
First Lien Secured Debt - Revolver8.85% (3M L+700, 1.00% Floor)05/22/24370 370 350 (9)(23)
14,457 13,893 
See notes to financial statements.
133

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
Pinstripe Holdings, LLC
Pinstripe Holdings, LLCFirst Lien Secured Debt7.08% (6M L+600, 1.00% Floor)01/17/256,930 6,819 6,547 
The Club Company
Eldrickco LimitedFirst Lien Secured Debt6.04% (3M GBPL+550, 0.50% Floor)11/21/25£750 938 869 (9)(17)
First Lien Secured Debt6.23% (3M GBPL+550, 0.50% Floor)11/21/25£9,914 12,376 11,336 (9)(17)
First Lien Secured Debt - Revolver5.52% (3M GBPL+500, 0.50% Floor)05/21/25£345 394 394 (9)(17)
(23)
First Lien Secured Debt - Unfunded Delayed Draw1.93% Unfunded11/21/25£3,991 (104)(326)(8)(9)
(17)(21)
(23)
13,604 12,273 
Tidewater Consumer Receivables, LLC
Tidewater Consumer Receivables, LLCFirst Lien Secured Debt7.33% (1M L+575)12/28/2311,333 11,248 11,090 (9)(17)
First Lien Secured Debt - Revolver7.33% (1M L+575)12/28/231,537 1,537 1,504 (9)(17)
(23)
First Lien Secured Debt - Unfunded Revolver0.00% Unfunded12/28/23130 (9)(3)(8)(9)
(17)(21)
(23)
12,776 12,591 
US Auto
U.S. Auto Finance, Inc.First Lien Secured Debt6.33% (3M L+475)04/17/2220,893 20,824 20,351 (9)
First Lien Secured Debt - Revolver7.08% (3M L+550)04/17/223,052 3,052 2,973 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded04/17/2216,948 (71)(441)(8)(9)
(21)(23)
23,805 22,883 
Total Consumer Services$129,079 $123,300 
Containers, Packaging & Glass
TricorBraun Holdings, Inc.
TricorBraun Holdings, Inc.First Lien Secured Debt - Revolver4.05% (1M L+325)11/30/21$1,500 $1,500 $1,478 (23)
First Lien Secured Debt - Revolver5.50% (P+225)11/30/213,750 3,750 3,695 (23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded11/30/21375 (169)(6)(8)(21)
(23)
Total Containers, Packaging & Glass$5,081 $5,167 
Diversified Investment Vehicles, Banking, Finance, Real Estate
Celink
Compu-Link CorporationFirst Lien Secured Debt - Revolver6.50% (1M L+550, 1.00% Floor)06/11/24$45 $$44 (9)(23)
First Lien Secured Debt - Revolver6.72% (3M L+550, 1.00% Floor)06/11/242,227 2,227 2,152 (9)(23)
Peer Advisors, LLCFirst Lien Secured Debt6.50% (1M L+550, 1.00% Floor)06/11/2421,875 21,461 21,138 (9)
23,691 23,334 
Exeter Property Group, LLC
Exeter Property Group, LLCFirst Lien Secured Debt6.08% (1M L+450)08/28/244,772 4,714 4,618 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded08/28/24192 (2)(6)(8)(9)
(21)(23)
4,712 4,612 
See notes to financial statements.
134

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
Flock Financial, LLC
Flock SPV I, LLCFirst Lien Secured Debt8.08% (1M L+650)08/30/2213,067 13,018 12,788 (9)(17)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded08/30/221,333 (8)(28)(8)(9)
(17)(21)
(23)
First Lien Secured Debt - Unfunded Delayed Draw0.50% Unfunded08/30/225,600 (64)(119)(8)(9)
(17)(21)
(23)
12,946 12,641 
Golden Bear
Golden Bear 2016-R, LLC (4)Structured Products and Other - Membership InterestsN/A09/20/42— 16,729 9,748 (3)(17)
Purchasing Power, LLC
Purchasing Power Funding I, LLCFirst Lien Secured Debt - Revolver8.08% (1M L+650)01/24/224,608 4,608 4,529 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded01/24/224,504 — (77)(8)(9)
(21)(23)
4,608 4,452 
Taupo River II, LLC
Taupo River II, LLCFirst Lien Secured Debt7.16% (3M L+525, 1.00% Floor)06/08/2014,000 13,993 13,966 (9)(17)
Ten-X, LLC
Ten-X, LLCFirst Lien Secured Debt - Revolver4.00% (1M L+325)09/29/223,120 3,120 2,911 (23)
First Lien Secured Debt - Revolver4.19% (1M L+325)09/29/221,560 1,350 1,455 (23)
4,470 4,366 
Total Diversified Investment Vehicles, Banking, Finance, Real Estate$81,149 $73,119 
Education
NFA Group
SSCP Spring Bidco LimitedFirst Lien Secured Debt6.94% (6M GPBL+625, 0.50% Floor)07/30/25£535 $641 $634 (9)(17)
First Lien Secured Debt6.99% (6M GBPL+625, 0.50% Floor)07/30/25£28,370 33,983 33,627 (9)(17)
First Lien Secured Debt - Unfunded Delayed Draw1.88% Unfunded07/30/25£1,095 (29)(60)(8)(9)
(17)(21)
(23)
Total Education$34,595 $34,201 
Energy – Electricity
AMP Solar Group, Inc.
AMP Solar Group, Inc. (4)Common Equity/Interests - Class A Common UnitN/AN/A243,646 Shares$10,000 $8,736 (13)(17)
Renew Financial LLC (f/k/a Renewable Funding, LLC)
AIC SPV Holdings II, LLC (4)Preferred Equity - Preferred StockN/AN/A143 Shares534 442 (15)(17)
Renew Financial LLC (f/k/a Renewable Funding, LLC) (4)Preferred Equity - Series B Preferred StockN/AN/A1,505,868 Shares8,343 3,284 (13)
Preferred Equity - Series D Preferred StockN/AN/A436,689 Shares5,568 2,101 (13)
Renew JV LLC (4)Common Equity/Interests - Membership InterestsN/AN/A893,336 Shares893 914 (13)(17)
15,338 6,741 
See notes to financial statements.
135

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
Solarplicity Group Limited (f/k/a AMP Solar UK)
Solarplicity UK Holdings LimitedFirst Lien Secured Debt4.00%03/08/23£5,562 7,637 3,787 (13)(14)
(17)
Preferred Equity - Preferred StockN/AN/A4,286 Shares5,861 — (2)(13)
(17)
Common Equity - Ordinary SharesN/AN/A2,825 Shares— (2)(13)
(17)
13,502 3,787 
Total Energy – Electricity$38,840 $19,264 
Energy – Oil & Gas
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.)
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.) (5)Second Lien Secured Debt10.00% PIK Toggle (8.00% Cash)03/29/21$37,234 $36,926 $14,711 (13)(14)
Common Equity/Interests - Common StockN/AN/A5,000,000 Shares30,078 — (13)
67,004 14,711 
Pelican
Pelican Energy, LLC (4)Common Equity/Interests - Membership InterestsN/AN/A1,444 Shares16,822 2,411 (13)(16)
(17)
Spotted Hawk
SHD Oil & Gas, LLC (5)First Lien Secured Debt - Tranche C Note12.00%07/31/2124,000 24,000 24,720 
First Lien Secured Debt - Tranche A Note4.00% (4.00% Cash plus 0.00% PIK)07/31/2145,457 44,998 22,495 (13)(14)
First Lien Secured Debt - Tranche B Note3.00% PIK07/31/2184,484 44,380 — (13)(14)
Common Equity/Interests - Series A UnitsN/AN/A7,600,000 Shares1,411 — (13)(16)
114,789 47,215 
Total Energy – Oil & Gas$198,615 $64,337 
Environmental Industries
Denali
Dispatch Acquisition Holdings, LLCFirst Lien Secured Debt7.27% (3M L+550, 1.00% Floor)01/29/27$16,342 $15,983 $15,983 (9)
First Lien Secured Debt - Revolver7.28% (3M L+550, 1.00% Floor)01/29/26325 325 317 (9)(23)
First Lien Secured Debt - Revolver7.27% (3M L+550, 1.00% Floor)01/29/26812 812 793 (9)(23)
First Lien Secured Debt - Revolver7.75% (P+450)01/29/26325 325 317 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded01/29/261,786 (71)(40)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.75% Unfunded01/29/275,411 (66)(122)(8)(9)
(21)(23)
17,308 17,248 
Ortega National Parks
Ortega National Parks, LLCFirst Lien Secured Debt6.32% (6M L+525, 1.00% Floor)10/31/2511,229 11,020 10,551 (9)
First Lien Secured Debt6.52% (3M L+525, 1.00% Floor)10/31/25492 487 462 (9)
First Lien Secured Debt - Revolver6.45% (3M L+525, 1.00% Floor)10/31/251,503 1,465 1,411 (9)(23)
See notes to financial statements.
136

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
First Lien Secured Debt - Revolver7.04% (3M L+525, 1.00% Floor)10/31/25273 273 257 (9)(23)
First Lien Secured Debt - Revolver7.16% (3M L+525, 1.00% Floor)10/31/25273 273 257 (9)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded10/31/256,202 (62)(375)(8)(9)
(21)(23)
13,456 12,563 
Total Environmental Industries$30,764 $29,811 
Food & Grocery
Bumble Bee Foods S.À R.L.
Bumble Bee Holdings IncFirst Lien Secured DebtN/A01/31/24$443 $— $430 
Connors Bros Clover Leaf Seafoods CompanyFirst Lien Secured DebtN/A01/31/24126 — 122 
Tonos US LLCFirst Lien Secured Debt8.96% (3M L+725, 1.50% Floor)01/31/2415,123 15,319 14,670 
Total Food & Grocery$15,319 $15,222 
Healthcare & Pharmaceuticals
Altasciences, Inc.
9360-1367 Quebec Inc.First Lien Secured Debt8.49% (3M CADL+625, 1.00% Floor)06/09/23$2,357 $1,734 $1,602 (9)(17)
First Lien Secured Debt7.32% (6M L+625, 1.00% Floor)06/09/23$2,821 2,787 2,730 (9)(17)
First Lien Secured Debt7.25% (1M L+625, 1.00% Floor)06/09/2319 19 18 (9)(17)
Altasciences US Acquistion, Inc.First Lien Secured Debt7.32% (6M L+625, 1.00% Floor)06/09/235,959 5,879 5,765 (9)
First Lien Secured Debt7.25% (1M L+625, 1.00% Floor)06/09/2337 37 36 (9)
First Lien Secured Debt - Revolver7.30% (3M L+625, 1.00% Floor)06/09/23392 392 379 (9)(23)
First Lien Secured Debt - Revolver7.45% (3M L+625, 1.00% Floor)06/09/23456 456 441 (9)(23)
First Lien Secured Debt - Revolver7.52% (3M L+625, 1.00% Floor)06/09/23570 570 552 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.25% Unfunded06/09/23(17)— (8)(9)
(11)(21)
(23)
11,857 11,523 
American Veterinary Group
AVG Intermediate Holdings LLCFirst Lien Secured Debt9.00% (1M L+800, 1.00% Floor)02/08/2411,759 11,642 11,097 (9)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded02/08/241,466 (113)(83)(8)(9)
(21)(23)
11,529 11,014 
AmeriVet
Amerivet Partners Management, Inc.First Lien Secured Debt7.75% (1M L+675, 1.00% Floor)06/05/2426,429 25,944 25,480 (9)
First Lien Secured Debt - Revolver9.00% (P+575)06/05/24524 524 505 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded06/05/24282 (14)(10)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.50% Unfunded06/05/247,648 (95)(275)(8)(9)
(21)(23)
Amerivet Partners Parent LPCommon Equity/Interests - Class D Partnership UnitsN/AN/A13 Shares125 144 (9)(13)
26,484 25,844 
See notes to financial statements.
137

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
Analogic
Analogic CorporationFirst Lien Secured Debt6.25% (1M L+525, 1.00% Floor)06/22/2418,215 17,894 17,851 (9)
First Lien Secured Debt - Revolver6.25% (1M L+525, 1.00% Floor)06/22/23157 157 153 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded06/22/231,670 (42)(33)(8)(9)
(21)(23)
18,009 17,971 
BioClinica Holding I, LP
BioClinica Holding I, LPSecond Lien Secured Debt9.25% (1M L+825, 1.00% Floor)10/21/2424,612 24,303 23,345 
BK Medical
BK Medical Holding Company, Inc.First Lien Secured Debt6.25% (1M L+525, 1.00% Floor)06/22/247,304 7,235 7,234 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded06/22/23783 (7)(8)(8)(9)
(21)(23)
7,228 7,226 
CARE Fertility
Royton Bidco LimitedFirst Lien Secured Debt6.29% (3M GBPL+575, 0.50% Floor)05/09/25£559 647 650 (9)(17)
First Lien Secured Debt6.42% (3M GBPL+575, 0.50% Floor)05/09/25£15,588 19,794 18,130 (9)(17)
First Lien Secured Debt6.48% (6M GBPL+575, 0.50% Floor)05/09/25£293 370 340 (9)(17)
First Lien Secured Debt - Unfunded Delayed Draw2.01% Unfunded05/09/25£3,559 (74)(274)(8)(9)
(17)(21)
(23)
20,737 18,846 
Cerus
Cerus CorporationFirst Lien Secured Debt7.25% (1M L+545, 1.80% Floor)03/01/2412,000 11,952 12,146 (9)(17)
First Lien Secured Debt - Revolver5.55% (1M L+375, 1.80% Floor)03/01/24187 187 189 (9)(17)
(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded03/01/24313 (1)— (9)(17)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded03/01/249,000 (36)— (9)(17)
(21)(23)
12,102 12,335 
Dohmen Life Science Services
LSCS Holdings, IncSecond Lien Secured Debt9.70% (3M L+825)03/16/2619,818 19,473 18,901 
Emmes Corporation
Emmes Blocker, Inc.Common Equity/Interests - Common StockN/AN/A306 Shares306 314 (9)(13)
The Emmes Company, LLCFirst Lien Secured Debt6.58% (1M L+500, 1.00% Floor)03/03/2512,122 11,973 11,819 (9)
First Lien Secured Debt - Revolver6.00% (1M L+500, 1.00% Floor)03/03/252,449 2,419 2,388 (9)(23)
14,698 14,521 
Genesis Healthcare, Inc.
Genesis Healthcare, Inc.First Lien Secured Debt12.58% (1M L+1100, 1.00% Floor)03/06/238,370 8,370 8,197 (9)
First Lien Secured Debt7.58% (1M L+600, 0.50% Floor)03/06/2325,000 24,780 24,237 (9)
See notes to financial statements.
138

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
First Lien Secured Debt - Revolver7.58% (1M L+600, 0.50% Floor)03/08/2314,069 14,069 13,605 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded03/08/2346,801 (462)(1,542)(8)(9)
(21)(23)
46,757 44,497 
Gossamer
GB001, Inc.First Lien Secured Debt8.15% (1M L+615, 2.00% Floor)05/01/246,000 5,970 6,049 (9)(17)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded05/01/2424,000 (196)— (9)(17)
(21)(23)
5,774 6,049 
Health & Safety Institute
HSI Halo Acquisition, Inc.First Lien Secured Debt6.75% (1M L+575, 1.00% Floor)08/31/2625,288 25,053 24,360 (9)
First Lien Secured Debt - Revolver8.00% (P+475)08/30/252,049 2,049 1,983 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded08/30/25410 (22)(13)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded08/31/262,131 (38)(78)(8)(9)
(21)(23)
Common Equity/Interests - Common StockN/AN/A500 Shares500 398 (9)(13)
27,542 26,650 
IMA Group
IMA Group Management Company, LLCFirst Lien Secured Debt6.57% (6M L+550, 1.00% Floor)05/30/245,126 5,083 4,921 
IM Acquirer LLCFirst Lien Secured Debt - Revolver6.50% (1M L+550, 1.00% Floor)05/30/24289 287 277 (23)
5,370 5,198 
KureSmart
Clearway Corporation (f/k/a NP/Clearway Holdings, Inc.)Common Equity/Interests - Partnership InterestsN/AN/A133 Shares133 120 (9)(13)
Kure Pain Holdings, Inc.First Lien Secured Debt6.50% (1M L+550, 1.00% Floor)08/27/2422,102 21,810 21,015 (9)
First Lien Secured Debt - Revolver6.50% (1M L+550, 1.00% Floor)08/27/242,654 2,619 2,522 (9)(23)
24,562 23,657 
Lanai Holdings III, Inc. (Patterson Medical)
Lanai Holdings III, Inc.Second Lien Secured Debt10.28% (3M L+1050 PIK, 1.00% Floor)08/28/2317,391 17,138 14,383 
Mannkind Corporation
Mannkind CorporationFirst Lien Secured Debt8.75% (1M L+675, 2.00% Floor)08/01/2413,867 13,806 13,639 (9)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded08/01/2412,133 (53)(199)(8)(9)
(21)(23)
13,753 13,440 
Maxor National Pharmacy Services, LLC
Maxor National Pharmacy Services, LLCFirst Lien Secured Debt6.95% (3M L+550, 1.00% Floor)11/22/2324,476 24,107 23,754 (9)
First Lien Secured Debt - Revolver7.75% (P+450)11/22/22779 779 760 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded11/22/22779 (21)(19)(8)(9)
(21)(23)
24,865 24,495 
See notes to financial statements.
139

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
Medical Guardian
Medical Guardian, LLCFirst Lien Secured Debt9.50% (1M L+850, 1.00% Floor)12/31/2434,286 33,635 33,600 (9)
First Lien Secured Debt - Revolver9.50% (1M L+850, 1.00% Floor)12/31/24381 381 373 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/31/245,333 (108)(107)(8)(9)
(21)(23)
33,908 33,866 
Orchard
Orchard Therapeutics plcFirst Lien Secured Debt7.58% (1M L+600, 1.00% Floor)05/24/248,333 8,299 8,257 (9)(17)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded05/24/2416,667 (69)(153)(8)(9)
(17)(21)
(23)
8,230 8,104 
Ovation Fertility
FPG Services, LLCFirst Lien Secured Debt6.95% (3M L+550, 1.00% Floor)06/13/2512,537 12,319 11,820 (9)
First Lien Secured Debt - Revolver6.50% (6M L+550, 1.00% Floor)06/13/242,105 2,070 1,985 (9)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded06/13/255,263 (46)(301)(8)(9)
(21)(23)
14,343 13,504 
Partner Therapeutics, Inc
Partner Therapeutics, IncFirst Lien Secured Debt8.23% (1M L+665, 1.00% Floor)01/01/2310,000 9,896 9,945 (9)
Preferred Equity - Preferred StockN/AN/A55,556 Shares333 333 (9)(13)
WarrantsN/AN/A33,333 Shares135 88 (9)(13)
10,364 10,366 
PHS
PHS Buyer, Inc.First Lien Secured Debt6.70% (3M L+525, 1.00% Floor)01/31/2512,870 12,636 12,548 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded01/31/252,000 (36)(50)(8)(9)
(21)(23)
12,600 12,498 
ProPharma
ProPharma Group Intermediate, LLCFirst Lien Secured Debt6.74% (1M L+575, 0.50% Floor)07/12/236,357 7,196 6,835 
First Lien Secured Debt6.74% (1M L+575, 0.50% Floor)07/12/23£4,220 5,490 5,128 
First Lien Secured Debt6.74% (1M L+575, 0.50% Floor)07/12/2311,358 11,276 11,132 
First Lien Secured Debt - Revolver7.20% (1M L+575, 0.50% Floor)07/12/231,032 1,025 1,012 (23)
24,987 24,107 
PTC Therapeutics, Inc
PTC Therapeutics, IncFirst Lien Secured Debt7.73% (1M L+615, 1.00% Floor)05/01/217,389 7,379 7,463 (9)(17)
Radius Health
Radius Health, Inc.First Lien Secured Debt7.75% (1M L+575, 2.00% Floor)06/01/243,000 2,993 2,993 (9)(17)
First Lien Secured Debt - Unfunded Revolver0.00% Unfunded06/01/242,000 (5)(5)(8)(9)
(17)(21)
(23)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded06/01/2413,500 — (33)(8)(9)
(17)(21)
(23)
2,988 2,955 
See notes to financial statements.
140

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
RHA Health Services
Pace Health Companies, LLCFirst Lien Secured Debt5.95% (3M L+450, 1.00% Floor)08/02/24547 538 525 (9)
First Lien Secured Debt - Revolver5.50% (1M L+450, 1.00% Floor)08/02/24433 424 415 (9)(23)
First Lien Secured Debt - Letter of Credit4.50%12/10/2068 — (3)(8)(9)
(23)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded08/02/243,950 (35)(163)(8)(9)
(21)(23)
927 774 
Rigel Pharmaceuticals
Rigel Pharmaceuticals, Inc.First Lien Secured Debt7.23% (1M L+565, 1.50% Floor)09/01/243,000 3,001 2,959 (9)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded09/01/243,000 — (41)(8)(9)
(21)(23)
3,001 2,918 
RiteDose Holdings I, Inc.
RiteDose Holdings I, Inc.First Lien Secured Debt8.41% (3M L+650, 1.00% Floor)09/13/2314,662 14,387 14,114 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded09/13/222,000 (32)(57)(8)(9)
(21)(23)
14,355 14,057 
Teladoc, Inc.
Teladoc, Inc.First Lien Secured Debt - Unfunded Revolver0.50% Unfunded07/14/201,306 (6)— (17)(21)
(23)
First Lien Secured Debt - Letters of Credit7.25%05/11/20 - 07/14/20360 — — (17)(23)
(6)— 
Wright Medical Group, Inc.
Wright Medical Group, Inc.First Lien Secured Debt9.43% (1M L+785, 1.00% Floor)12/23/216,667 6,603 6,733 (9)(17)
First Lien Secured Debt - Revolver5.83% (1M L+425, 0.75% Floor)12/23/217,666 7,666 7,724 (9)(17)
(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/23/2150,667 (224)— (9)(17)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded12/23/2111,667 (63)— (9)(17)
(21)(23)
13,982 14,457 
Total Healthcare & Pharmaceuticals$479,239 $464,964 
High Tech Industries
Acronis AG
Acronis AGFirst Lien Secured Debt7.43% (1M L+585, 1.50% Floor)12/18/24$21,000 $20,901 $20,217 (9)(17)
American Megatrends
AMI US Holdings Inc.First Lien Secured Debt6.83% (1M L+525, 1.00% Floor)04/01/2521,872 21,507 21,216 (9)
First Lien Secured Debt - Revolver6.25% (1M L+525)04/01/241,395 1,395 1,351 (9)(23)
First Lien Secured Debt - Revolver6.32% (6M L+525)04/01/24698 698 675 (9)(23)
First Lien Secured Debt - Revolver6.83% (1M L+525)04/01/24581 581 563 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded04/01/24233 (46)(7)(8)(9)
(21)(23)
24,135 23,798 
See notes to financial statements.
141

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
Calero Holdings, Inc.
Telesoft Holdings, LLCFirst Lien Secured Debt7.20% (3M L+575, 1.00% Floor)12/16/2522,727 22,240 21,723 
First Lien Secured Debt - Revolver6.75% (1M L+575, 1.00% Floor)12/16/251,515 1,515 1,448 (23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/16/25758 (49)(33)(8)(21)
(23)
23,706 23,138 
ChargePoint
ChargePoint, Inc.First Lien Secured Debt8.13% (1M L+655, 1.25% Floor)06/01/2310,500 10,432 10,321 (9)
ChyronHego Corporation
ChyronHego CorporationFirst Lien Secured Debt7.43% (P+468)3/9/203,725 3,725 3,650 (27)
First Lien Secured Debt7.43% (P+468)3/9/2034,579 34,382 29,738 (18)(27)
First Lien Secured Debt5.54% (1M L+390, 1.00% Floor)3/9/2034,753 30,630 31,625 (27)
First Lien Secured Debt - Revolver5.54% (1M L+390, 1.00% Floor)3/9/205,050 5,050 4,848 (23)(27)
First Lien Secured Debt - Unfunded Revolver0.375% Unfunded3/9/20700 (678)(28)(8)(21)
(23)(27)
73,109 69,833 
Digital Reasoning
Digital Reasoning Systems, Inc.First Lien Secured Debt8.25% (1M L+625, 2.00% Floor)08/01/243,750 3,721 3,630 (9)
First Lien Secured Debt - Unfunded Delayed Draw0.00% Unfunded08/01/241,250 (11)(40)(8)(9)
(21)(23)
WarrantsN/AN/A48,596 Shares— 48 (9)(13)
3,710 3,638 
FiscalNote
FiscalNote, Inc.First Lien Secured Debt9.00% (1M L+800, 1.00% Floor)08/21/2328,431 27,905 27,075 (9)
First Lien Secured Debt - Revolver9.00% (1M L+800, 1.00% Floor)08/21/233,867 3,867 3,654 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded08/21/232,508 (79)(138)(8)(9)
(21)(23)
Preferred Equity - Series F Preferred StockN/AN/A259,565 Shares1,500 1,500 (9)(13)
33,193 32,091 
GoHealth
Norvax, LLCFirst Lien Secured Debt7.96% (3M L+650, 1.00% Floor)09/15/2531,659 30,939 30,222 (9)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded09/13/243,182 (71)(129)(8)(9)
(21)(23)
30,868 30,093 
International Cruise & Excursion Gallery, Inc.
International Cruise & Excursion Gallery, Inc.First Lien Secured Debt6.32% (3M L+525, 1.00% Floor)06/06/2514,737 14,517 13,439 
LabVantage Solutions
LabVantage Solutions Inc.First Lien Secured Debt9.15% (1M L+750, 1.00% Floor)12/29/2010,324 10,274 10,221 
LabVantage Solutions LimitedFirst Lien Secured Debt8.50% (1M E+750, 1.00% Floor)12/29/2010,513 11,262 11,420 (17)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/29/203,435 (11)(38)(8)(17)
(21)(23)
21,525 21,603 
See notes to financial statements.
142

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
Magnitude Software
New Amsterdam Software BidCo LLCFirst Lien Secured Debt5.00% (3M E+500, 1.00% Floor)05/01/26743 819 783 (9)
First Lien Secured Debt6.77% (3M L+500, 1.00% Floor)05/01/266,865 6,745 6,590 (9)
First Lien Secured Debt - Unfunded Delayed Draw0.50% Unfunded05/01/262,250 (20)(90)(8)(9)
(21)(23)
7,544 7,283 
MYCOM
Magnate Holding Corp.First Lien Secured Debt7.32% (6M L+625, 1.00% Floor)12/16/2416,587 16,392 10,597 (9)(17)
First Lien Secured Debt - Revolver7.32% (6M L+625, 1.00% Floor)12/14/231,025 1,025 655 (9)(17)
(23)
First Lien Secured Debt - Revolver7.23% (6M L+625, 1.00% Floor)12/14/23999 999 638 (9)(17)
(23)
First Lien Secured Debt - Revolver7.90% (3M L+625, 1.00% Floor)12/14/23666 666 426 (9)(17)
(23)
First Lien Secured Debt - Unfunded Revolver1.75% Unfunded12/14/23500 (37)(181)(8)(9)
(17)(21)
(23)
First Lien Secured Debt - Letter of Credit5.00%04/22/20140 — (50)(8)(9)
(17)(23)
19,045 12,085 
Omnitracs, LLC
Omnitracs, LLCFirst Lien Secured Debt - Unfunded Revolver0.50% Unfunded03/23/233,750 (201)(375)(8)(21)
(23)
Schlesinger Group
Schlesinger Global, LLCFirst Lien Secured Debt7.45% (3M L+600, 1.00% Floor)07/12/258,984 8,764 8,764 (9)
First Lien Secured Debt7.00% (1M L+600, 1.00% Floor)07/12/25154 151 151 (9)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded07/12/25846 (10)(21)(8)(9)
(21)(23)
8,905 8,894 
Simeio
Simeio Group Holdings, Inc.First Lien Secured Debt7.53% (3M L+575, 1.00% Floor)01/30/268,654 8,528 8,528 (9)
First Lien Secured Debt - Revolver7.20% (3M L+575, 1.00% Floor)01/30/26577 577 568 (9)(23)
First Lien Secured Debt - Revolver8.00% (P+475)01/30/26577 577 568 (9)(23)
First Lien Secured Debt - Revolver6.80% (3M L+575, 1.00% Floor)01/30/26577 552 568 (9)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.75% Unfunded01/30/264,615 (34)(69)(8)(9)
(21)(23)
10,200 10,163 
Sirsi Corporation
Sirsi CorporationFirst Lien Secured Debt5.75% (1M L+475, 1.00% Floor)03/15/246,895 6,813 6,722 (9)
First Lien Secured Debt - Revolver5.75% (1M L+475, 1.00% Floor)03/15/2443 43 42 (9)(23)
First Lien Secured Debt - Revolver7.00% (P+375)03/15/2443 43 42 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded03/15/24343 (5)(9)(8)(9)
(21)(23)
6,894 6,797 
Springbrook
Springbrook Holding Company, LLCFirst Lien Secured Debt7.20% (3M L+575, 1.00% Floor)12/23/269,853 9,691 9,656 
See notes to financial statements.
143

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/23/261,463 (25)(29)(8)(21)
(23)
First Lien Secured Debt - Unfunded Delayed Draw0.50% Unfunded12/23/263,658 (34)(73)(8)(21)
(23)
9,632 9,554 
Telestream Holdings Corporation
Telestream Holdings CorporationFirst Lien Secured Debt7.61% (3M L +645, 1.00% Floor)03/24/2238,085 37,891 36,942 (18)
ZPower, LLC
ZPower, LLCFirst Lien Secured DebtL+60007/01/226,716 6,853 2,066 (9)(13)
(14)
WarrantsN/AN/A29,630 Shares48 — (9)(13)
6,901 2,066 
Total High Tech Industries$362,907 $341,580 
Hotel, Gaming, Leisure, Restaurants
Garden Fresh
GFRC Holdings LLCFirst Lien Secured DebtL+800 Cash (L+800 PIK Toggle)02/01/22$2,500 $2,500 $2,425 (13)(14)
Total Hotel, Gaming, Leisure, Restaurants$2,500 $2,425 
Insurance
PGM Holdings Corporation
Turbo Buyer, Inc.First Lien Secured Debt7.52% (1M L+600, 1.00% Floor)12/02/2511,942 11,660 11,524 (9)
First Lien Secured Debt - Revolver7.00% (6M L+600, 1.00% Floor)12/02/25923 901 891 (9)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded12/02/252,105 (25)(74)(8)(9)
(21)(23)
12,536 12,341 
PIB Group
Ivy Finco LimitedFirst Lien Secured Debt5.27% (1M GBPL+500)06/07/25£12,131 $15,103 $14,154 (9)(17)
First Lien Secured Debt5.73% (1M GBPL+500)06/07/25£2,657 3,348 3,100 (9)(17)
First Lien Secured Debt - Unfunded Delayed Draw1.50% Unfunded06/07/25£2,712 (131)(198)(8)(9)
(17)(21)
(23)
18,320 17,056 
Relation Insurance
AQ Sunshine, Inc.First Lien Secured Debt7.42% (6M L+550, 1.00% Floor)04/15/25$17,008 16,773 16,354 (9)
First Lien Secured Debt - Revolver7.42% (6M L+550, 1.00% Floor)04/15/24588 588 569 (9)(23)
First Lien Secured Debt - Revolver6.57% (3M L+550, 1.00% Floor)04/15/24471 471 455 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded04/15/2479 (19)(3)(8)(9)
(21)(23)
First Lien Secured Debt - Letter of Credit5.50%04/30/2038 — (1)(8)(9)
(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded04/15/251,694 (79)(65)(8)(9)
(21)(23)
17,734 17,309 
Risk Strategies
RSC Acquisition , Inc.First Lien Secured Debt7.28% (3M L+550, 1.00% Floor)11/02/2616,121 15,832 15,468 (17)
First Lien Secured Debt6.95% (3M L+550, 1.00% Floor)11/02/261,003 1,010 962 (17)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded11/02/26494 (9)(20)(8)(17)
(21)(23)
See notes to financial statements.
144

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
First Lien Secured Debt - Letter of Credit5.50%04/07/20— — (17)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded11/02/262,714 (86)(110)(8)(17)
(21)(23)
16,747 16,300 
Total Insurance$65,337 $63,006 
Manufacturing, Capital Equipment
AVAD, LLC
AVAD Canada Ltd.First Lien Secured Debt - Revolver5.58% (1M L+400, 1.00% Floor)10/02/23$534 $534 $511 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded10/02/23800 (14)(35)(8)(9)
(21)(23)
AVAD, LLCFirst Lien Secured Debt9.33% (1M L+775, 1.00% Floor)10/02/238,587 8,464 8,231 (9)
First Lien Secured Debt - Revolver5.58% (1M L+400, 1.00% Floor)10/02/2310,086 10,086 9,649 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded10/02/238,580 (219)(372)(8)(9)
(21)(23)
18,851 17,984 
Kauffman
Kauffman Holdco, LLCCommon Equity/Interests - Class A UnitsN/AN/A250,000 Shares250 187 (9)(13)
Kauffman Intermediate, LLCFirst Lien Secured Debt7.20% (3M L+575, 1.00% Floor)05/08/2516,839 16,552 16,275 (9)
First Lien Secured Debt - Revolver6.97% (3M L+575, 1.00% Floor)05/08/251,243 1,243 1,199 (9)(23)
First Lien Secured Debt - Revolver7.50% (3M L+575, 1.00% Floor)05/08/25233 233 225 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded05/08/25932 (44)(33)(8)(9)
(21)(23)
First Lien Secured Debt - Letter of Credit5.75%07/25/20155 — (6)(8)(9)
(23)
18,234 17,847 
MedPlast Holdings Inc.
MedPlast Holdings Inc.Second Lien Secured Debt9.20% (3M L+775)07/02/268,000 7,937 7,538 
Total Manufacturing, Capital Equipment$45,022 $43,369 
Media – Diversified & Production
New Wave Entertainment
NW Entertainment, Inc.First Lien Secured Debt8.00% (1M L+700, 1.00% Floor)08/16/24$23,700 $23,285 $22,738 (9)
First Lien Secured Debt - Revolver8.00% (1M L+700, 1.00% Floor)08/16/242,400 2,400 2,297 (9)(23)
First Lien Secured Debt - Revolver8.36% (1M L+700, 1.00% Floor)08/16/24600 548 574 (9)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded08/16/243,000 (52)(122)(8)(9)
(21)(23)
26,181 25,487 
Nitro World Entertainment
NWE OPCO LPFirst Lien Secured Debt8.50% (1M L+650, 2.00% Floor)12/19/225,000 4,977 4,755 (9)
Sonar Entertainment
Sonar Entertainment, Inc.First Lien Secured Debt9.18% (1M L+760, 1.25% Floor)11/15/218,058 7,981 7,917 (9)
First Lien Secured Debt - Revolver9.18% (1M L+760, 1.25% Floor)11/15/214,097 4,097 4,025 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded11/15/2118,734 (216)(328)(8)(9)
(21)(23)
11,862 11,614 
Total Media – Diversified & Production$43,020 $41,856 
See notes to financial statements.
145

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
Metals & Mining
Magnetation, LLC
Magnetation, LLCFirst Lien Secured Debt9.91% (6M L+800 Cash (PIK Toggle))12/31/19$1,213 $581 $— (13)(14)
(26)
Total Metals & Mining$581 $— 
Retail
IPS
SI Holdings, Inc.First Lien Secured Debt7.45% (3M L+600, 1.00% Floor)07/25/25$31,641 $31,067 $30,420 (9)
First Lien Secured Debt - Revolver7.45% (3M L+600, 1.00% Floor)07/25/24853 853 820 (9)(23)
First Lien Secured Debt - Revolver7.20% (3M L+600, 1.00% Floor)07/25/242,560 2,501 2,460 (9)(23)
34,421 33,700 
Rapid Displays
Rapid Displays Acquisition CorporationFirst Lien Secured Debt6.00% (1M L+500, 1.00% Floor)07/01/25440 432 423 (9)
First Lien Secured Debt6.76% (3M L+500, 1.00% Floor)07/01/2510,385 10,203 9,991 (9)
First Lien Secured Debt6.78% (3M L+500, 1.00% Floor)07/01/25577 571 555 (9)
First Lien Secured Debt - Revolver7.25% (P+400)07/01/252,308 2,267 2,214 (9)(23)
First Lien Secured Debt - Unfunded Delayed Draw1.00% Unfunded07/01/251,154 (15)(44)(8)(9)
(21)(23)
13,458 13,139 
Total Retail$47,879 $46,839 
Telecommunications
IPC Corporation
IPC CorporationFirst Lien Secured Debt6.78% (3M L+500, 1.00% Floor)08/06/21$10,000 $9,959 $8,996 (9)
IPC Information Systems UK Holdings LimitedFirst Lien Secured Debt8.21% (3M L+650, 1.50% Floor)08/06/21843 815 789 (9)(17)
First Lien Secured Debt8.24% (3M L+650, 1.50% Floor)08/06/21562 543 526 (9)(17)
11,317 10,311 
Securus Technologies Holdings, Inc.
Securus Technologies Holdings, Inc.Second Lien Secured Debt9.25% (1M L+825, 1.00% Floor)11/01/2512,878 12,788 10,817 
Total Telecommunications$24,105 $21,128 
Transportation – Cargo, Distribution
Dynamic Product Tankers (Prime), LLC
Dynamic Product Tankers, LLC (5)First Lien Secured Debt8.94% (3M L+700)06/30/23$42,000 $41,870 $42,000 (17)
First Lien Secured Debt - Letters of Credit2.25%09/20/20 - 03/31/216,050 — — (17)(23)
Common Equity/Interests - Class A UnitsN/AN/AN/A49,806 36,457 (13)(17)
(24)
91,676 78,457 
Heniff and Superior
Heniff Holdco, LLCFirst Lien Secured Debt7.25% (1M L+575, 1.00% Floor)12/03/2631,075 30,477 29,611 (9)
First Lien Secured Debt - Revolver6.75% (1M L+575, 1.00% Floor)12/03/24327 327 315 (9)(23)
See notes to financial statements.
146

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry / CompanyInvestment TypeInterest Rate (20)Maturity
Date
Par / Shares (12)Cost (28)Fair
Value (1)(29)
First Lien Secured Debt - Revolver7.25% (1M L+575, 1.00% Floor)12/03/24327 327 315 (9)(23)
First Lien Secured Debt - Revolver6.80% (3M L+575, 1.00% Floor)12/03/24981 981 944 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded12/03/242,290 (73)(87)(8)(9)
(21)(23)
32,039 31,098 
MSEA Tankers LLC
MSEA Tankers LLC (5)Common Equity/Interests - Class A UnitsN/AN/AN/A61,950 59,735 (17)(25)
Total Transportation – Cargo, Distribution$185,665 $169,290 
Wholesale
Banner Solutions
Banner Buyer, LLCFirst Lien Secured Debt6.75% (1M L+575, 1.00% Floor)10/31/25$12,549 $12,345 $11,915 (9)
First Lien Secured Debt - Revolver6.75% (1M L+575, 1.00% Floor)10/31/251,548 1,548 1,469 (9)(23)
First Lien Secured Debt - Unfunded Revolver0.50% Unfunded10/31/25387 (32)(20)(8)(9)
(21)(23)
First Lien Secured Debt - Unfunded Delayed Draw0.75% Unfunded10/31/255,484 (45)(277)(8)(9)
(21)(23)
Banner Parent Holdings, IncCommon Equity/Interests - Common StockN/AN/A5,000 Shares500 331 (9)(13)
Total Wholesale$14,316 $13,418 
Total Investments before Cash Equivalents$3,089,613 $2,785,433 
J.P. Morgan U.S. Government Money Market Fund$37,301 $37,301 $37,301 (22)
Total Investments after Cash Equivalents$3,126,914 $2,822,734 (6)(7)
____________________
(1)Fair value is determined in good faith by or under the direction of the Board of Directors of the Company (See Note 2 to the financial statements).
(2)Preferred and ordinary shares in Solarplicity UK Holdings Limited are GBP denominated equity investments.
(3)Denotes investments in which the Company owns greater than 25% of the equity, where the governing documents of each entity preclude the Company from exercising a controlling influence over the management or policies of such entity. The Company does not have the right to elect or appoint more than 25% of the directors or another party has the right to elect or appoint more directors than the Company and has the right to appoint certain members of senior management. Therefore, the Company has determined that these entities are not controlled affiliates. As of March 31, 2020, we had a 100% equity ownership interest in Golden Bear 2016-R, LLC.










See notes to financial statements.
147

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
(4)Denotes investments in which we are an “Affiliated Person,” as defined in the 1940 Act, due to holding the power to vote or owning 5% or more of the outstanding voting securities of the investment but not controlling the company. Fair value as of March 31, 2019 and March 31, 2020 along with transactions during the year ended March 31, 2020 in these affiliated investments are as follows:
Name of IssuerFair Value at March 31, 2019Gross Additions ●Gross Reductions ■Net Change in Unrealized Gains (Losses)Fair Value at March 31, 2020Net Realized Gains (Losses)Interest/Dividend/Other Income
AIC SPV Holdings II, LLC, Preferred Stock$440 $— $— $$442 $— $94 
AMP Solar Group, Inc., Class A Common Unit6,236 — — 2,500 8,736 — — 
Carbonfree Caustic SPE LLC, Term Loan— 13,111 — — 13,111 — 524 
Carbonfree Chemicals SA LLC, Class B Units— 15,403 — (15,403)— — — 
Carbonfree Chemicals Holdings LLC, Common Equity / Interest— 30,886 — (15,781)15,105 — — 
Carbonfree Chemicals SPE I LLC (f/k/a Maxus Capital Carbon SPE I LLC), Term Loan— 17,057 — (12,668)4,389 — 318 
Golden Bear 2016-R, LLC, Membership Interests12,936 83 — (3,271)9,748 — 1,192 
Pelican Energy, LLC, Membership Interests5,320 — (1,553)(1,356)2,411 — — 
Renew Financial LLC (f/k/a Renewable Funding, LLC), Series B Preferred Stock14,573 — — (11,289)3,284 — — 
Renew Financial LLC (f/k/a Renewable Funding, LLC), Series D Preferred Stock5,890 — — (3,789)2,101 — — 
Renew JV LLC, Membership Interests2,296 4,216 (5,118)(480)914 2,800 — 
SquareTwo Financial Corp. (CA Holdings, Collect America, Ltd.)— — — — — 1,209 — 
Solarplicity Group Limited, First Lien Term Loan1,990 — (5,811)3,821 — (4,740)— 
$49,681 $80,756 $(12,482)$(57,714)$60,241 $(731)$2,128 
____________________
● Gross additions includes increases in the basis of investments resulting from new portfolio investments, payment-in-kind interest or dividends, the accretion of discounts, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.
■ Gross reductions include decreases in the basis of investments resulting from principal collections related to investment repayments or sales, the amortization of premiums, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.


See notes to financial statements.
148

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
(5)Denotes investments in which we are deemed to exercise a controlling influence over the management or policies of a company, as defined in the 1940 Act, due to beneficially owning, either directly or through one or more controlled companies, more than 25% of the outstanding voting securities of the investment. Fair value as of March 31, 2019 and March 31, 2020 along with transactions during the year ended March 31, 2020 in these controlled investments are as follows:
Name of IssuerFair Value at March 31, 2019Gross Additions ●Gross Reductions ■Net Change in Unrealized Gains (Losses)Fair Value at March 31, 2020Net Realized Gains (Losses)Interest/Dividend/Other Income
Dynamic Product Tankers, LLC, Class A Units$36,879 $— $— $(422)$36,457 $— $— 
Dynamic Product Tankers, LLC, First Lien Term Loan42,000 40 — (40)42,000 — 3,969 
Dynamic Product Tankers, LLC, Letters of Credit— — — — — — — 
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.), Second Lien Term Loan33,705 3,222 — (22,216)14,711 — 3,221 
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.), First Lien Term Loan9,000 — (9,000)— — — 416 
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.), Common Stock3,346 — — (3,346)— — — 
Merx Aviation Finance, LLC, Membership Interests54,281 — — (25,834)28,447 — 2,500 
Merx Aviation Finance, LLC, Revolver371,200 13,100 (79,000)— 305,300 — 38,679 
Merx Aviation Finance, LLC, Letters of Credit— — — — — — — 
MSEA Tankers LLC, Class A Units73,369 — (12,500)(1,135)59,735 — 4,649 
SHD Oil & Gas, LLC, Series A Units— — — — — — — 
SHD Oil & Gas, LLC, Tranche A Note46,821 — (460)(23,866)22,495 — 1,400 
SHD Oil & Gas, LLC, Tranche B Note39,432 — — (39,432)— — — 
SHD Oil & Gas, LLC, Tranche C Note21,012 3,600 — 108 24,720 — 2,741 
$731,045 $19,962 $(100,960)$(116,183)$533,865 $— $57,575 
____________________
● Gross additions includes increases in the basis of investments resulting from new portfolio investments, payment-in-kind interest or dividends, the accretion of discounts, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.
■ Gross reductions include decreases in the basis of investments resulting from principal collections related to investment repayments or sales, the amortization of premiums, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.
    As of March 31, 2020, the Company had a 85%, 47%, 100%, 98% and 38% equity ownership interest in Dynamic Product Tankers, LLC; Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.); Merx Aviation Finance, LLC; MSEA Tankers, LLC; and SHD Oil & Gas, LLC (f/k/a Spotted Hawk Development LLC), respectively.
See notes to financial statements.
149

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)

(6)Aggregate gross unrealized gain and loss for federal income tax purposes is $49,776 and $405,396, respectively. Net unrealized loss is $355,620 based on a tax cost of $3,178,354.
(7)Substantially all securities are pledged as collateral to our multi-currency revolving credit facility (the “Senior Secured Facility” as defined in Note 8 to the financial statements). As such, these securities are not available as collateral to our general creditors.
(8)The negative fair value is the result of the commitment being valued below par.
(9)These are co-investments made with the Company’s affiliates in accordance with the terms of the exemptive order the Company received from the Securities and Exchange Commission (the “SEC”) permitting us to do so. (See Note 3 to the financial statements for discussion of the exemptive order from the SEC.)
(10)Other than the investments noted by this footnote, the fair value of the Company’s investments is determined using unobservable inputs that are significant to the overall fair value measurement. See Note 2 to the financial statements for more information regarding ASC 820, Fair Value Measurements (“ASC 820”).
(11)The unused line fees of 0.25% are collected for the Unfunded Revolver, respectively from both Altasciences US Acquisition, Inc. and Altasciences/9360-1367 Quebec Inc. as each borrower has access to the respective lending facilities.
(12)Par amount is denominated in USD unless otherwise noted, Euro (“€”), British Pound (“£”), Canadian Dollar (“C$”), and Australian Dollar (“A$”) .
(13)Non-income producing security.
(14)Non-accrual status (See Note 2 to the financial statements).
(15)The underlying investments of AIC SPV Holdings II, LLC is a securitization in which the Company has a 14.25% ownership interest in the residual tranche.
(16)AIC Spotted Hawk Holdings, LLC, AIC SHD Holdings, LLC and AIC Pelican Holdings, LLC are consolidated wholly-owned special purpose vehicles which only hold equity investments of the underlying portfolio companies and have no other significant assets or liabilities. AIC Spotted Hawk Holdings, LLC and AIC SHD Holdings, LLC hold equity investments in SHD Oil & Gas, LLC. AIC Pelican Holdings, LLC holds an equity investment in Pelican Energy, LLC.
(17)Investments that the Company has determined are not “qualifying assets” under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets. The status of these assets under the 1940 Act is subject to change. The Company monitors the status of these assets on an ongoing basis. As of March 31, 2020, non-qualifying assets represented approximately 17.23% of the total assets of the Company.
(18)In addition to the interest earned based on the stated rate of this loan, the Company may be entitled to receive additional interest as a result of its arrangement with other lenders in a syndication.
(19)The Company holds some warrants for this investment as part of the restructuring of the underlying portfolio company.  The warrants have no cost and no fair value as of March 31, 2020.
(20)Generally, the interest rate on floating interest rate investments is at benchmark rate plus spread. The borrower has an option to choose the benchmark rate, such as the London Interbank Offered Rate (“LIBOR”), the Euro Interbank Offered Rate (“EURIBOR”), the federal funds rate or the prime rate. The spread may change based on the type of rate used. The terms in the Schedule of Investments disclose the actual interest rate in effect as of the reporting period. LIBOR loans are typically indexed to 30-day, 60-day, 90-day or 180-day LIBOR rates (1M L, 2M L, 3M L or 6M L, respectively), EURIBOR loans are typically indexed to 90-day EURIBOR rates (3M E), Bank Bill Swap rates are typically index to 90-day Bank Bill Swap rates (3M BBSW), GBP LIBOR loans are typically indexed to 90-day GBP LIBOR rates (3M GBP L) and EUR LIBOR loans are typically indexed to 90-day EUR LIBOR rates (3M E L) at the borrower’s option. LIBOR and EURIBOR loans may be subject to interest floors. As of March 31, 2020, rates for 1M L, 2M L, 3M L, 6M L, 1M E, 3M E, 3M BBSW, 3M GBP L, 3M E L and Prime are 0.99%, 1.26%, 1.45%, 1.18%, (0.42%), (0.36%), 0.42%, 0.59%, (0.25%) and 3.25%, respectively.
(21)The rates associated with these undrawn committed revolvers and delayed draw term loans represent rates for commitment and unused fees.
(22)This security is included in the Cash and Cash Equivalents on the Statements of Assets and Liabilities.





See notes to financial statements.
150

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
(23)As of March 31, 2020, the Company had the following commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to issue letters of credit through a financial intermediary on behalf of certain portfolio companies. Such commitments are subject to the satisfaction of certain conditions set forth in the documents governing these loans and letters of credit and there can be no assurance that such conditions will be satisfied. See Note 10 to the financial statements for further information on revolving and delayed draw loan commitments, including commitments to issue letters of credit, related to certain portfolio companies.
Portfolio CompanyTotal CommitmentDrawn CommitmentLetters of CreditUndrawn Commitment
A&V Holdings Midco, LLC$1,505 $903 $— $602 
Altasciences US Acquistion, Inc.1,425 1,418 — 
Amerivet Partners Management, Inc.8,454 524 — 7,930 
AMI US Holdings Inc.2,907 2,674 — 233 
Analogic Corporation1,827 157 — 1,670 
AQ Sunshine, Inc.2,870 1,059 38 1,773 
Arlington Industries Group Limited*4,960 — — 4,960 
AVAD Canada Ltd.1,334 534 — 800 
AVAD, LLC18,666 10,086 — 8,580 
AVG Intermediate Holdings LLC1,466 — — 1,466 
Banner Buyer, LLC7,419 1,548 — 5,871 
BIG Buyer, LLC1,805 722 — 1,083 
BK Medical Holding Company, Inc.783 — — 783 
Cerus Corporation9,500 187 — 9,313 
ChyronHego Corporation5,750 5,050 — 700 
Claritas, LLC1,032 748 — 284 
Compu-Link Corporation2,272 2,272 — — 
Continuum Global Solutions, LLC20,000 8,791 — 11,209 
Digital Reasoning Systems, Inc.1,250 — — 1,250 
Dispatch Acquisition Holdings, LLC8,659 1,462 — 7,197 
Dynamic Product Tankers, LLC6,050 — 6,050 — 
Eagle Foods Family Group, LLC3,751 1,334 — 2,417 
Education Personnel*1,823 1,823 — — 
EHL Merger Sub, LLC4,155 1,662 — 2,493 
Eldrickco Limited*5,377 428 — 4,949 
Erickson Inc40,500 31,812 1,263 7,425 
Exeter Property Group, LLC192 — — 192 
First Heritage Credit, LLC11,550 517 — 11,033 
FiscalNote, Inc.6,375 3,867 — 2,508 
Flock SPV I, LLC6,933 — — 6,933 
Florida Food Products, LLC1,713 1,713 — — 
FPG Services, LLC7,368 2,105 — 5,263 
GB001, Inc.24,000 — — 24,000 
Genesis Healthcare, Inc.60,870 14,069 — 46,801 
Gutter Buyer, Inc.4,772 2,727 — 2,045 
Heniff Holdco, LLC3,925 1,635 — 2,290 
HSI Halo Acquisition, Inc.4,590 2,049 — 2,541 
IM Acquirer LLC289 289 — — 
Ivy Finco Limited*3,363 — — 3,363 
Jacent Strategic Merchandising3,500 3,500 — — 
JF Acquisition, LLC1,569 1,569 — — 
See notes to financial statements.
151

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Portfolio CompanyTotal CommitmentDrawn CommitmentLetters of CreditUndrawn Commitment
Kauffman Intermediate, LLC2,563 1,476 155 932 
KDC US Holdings*6,023 5,731 78 214 
Kure Pain Holdings, Inc.2,654 2,654 — — 
LabVantage Solutions Limited*3,769 — — 3,769 
Lifelong Learner Holdings, LLC5,374 2,389 — 2,985 
Lion Cashmere Midco Limited*3,903 1,301 — 2,602 
Liqui-Box Holdings, Inc.*3,563 3,085 77 401 
Magnate Holding Corp.3,330 2,690 140 500 
Mannkind Corporation12,133 — — 12,133 
Margaux Acquisition Inc.6,062 1,601 — 4,461 
Margaux UK Finance Limited*2,350 667 — 1,683 
Marlin DTC-LS Midco 2, LLC685 — — 685 
Maxor National Pharmacy Services, LLC1,558 779 — 779 
Medical Guardian, LLC5,714 381 — 5,333 
Merx Aviation Finance, LLC305,477 305,300 177 — 
Nemo (BC) Bidco Pty Ltd*142 — — 142 
New Amsterdam Software BidCo LLC*2,250 — — 2,250 
Newscycle Solutions, Inc.500 500 — — 
Norvax, LLC3,182 — — 3,182 
NW Entertainment, Inc.6,000 3,000 — 3,000 
Olaplex, Inc.3,800 3,800 — — 
Omnitracs, LLC3,750 — — 3,750 
Orchard Therapeutics plc16,667 — — 16,667 
Ortega National Parks, LLC8,251 2,049 — 6,202 
Pace Health Companies, LLC4,451 433 68 3,950 
Paper Source, Inc.3,081 3,081 — — 
PHS Buyer, Inc.2,000 — — 2,000 
PrimeFlight Aviation Services, Inc.2,842 — — 2,842 
Project Comfort Buyer, Inc.5,769 — — 5,769 
ProPharma Group Intermediate, LLC*1,032 1,032 — — 
Protein For Pets Opco, LLC2,219 444 — 1,775 
Purchasing Power Funding I, LLC9,112 4,608 — 4,504 
RA Outdoors, LLC1,200 — — 1,200 
Radius Health, Inc.15,500 — — 15,500 
Rapid Displays Acquisition Corporation3,462 2,308 — 1,154 
Rigel Pharmaceuticals, Inc.3,000 — — 3,000 
RiteDose Holdings I, Inc.2,000 — — 2,000 
Royton Bidco Limited*4,413 — — 4,413 
RSC Acquisition , Inc.3,213 — 3,208 
Schlesinger Global, LLC846 — — 846 
SI Holdings, Inc.3,413 3,413 — — 
Simeio Group Holdings, Inc.6,346 1,731 — 4,615 
Simplifi Holdings, Inc.8,491 1,200 — 7,291 
Sirsi Corporation429 86 — 343 
Soliant Holdings, LLC1,937 323 — 1,614 
See notes to financial statements.
152

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Portfolio CompanyTotal CommitmentDrawn CommitmentLetters of CreditUndrawn Commitment
Sonar Entertainment, Inc.22,831 4,097 — 18,734 
Springbrook Holding Company, LLC5,121 — — 5,121 
SSCP Spring Bidco Limited*1,358 — — 1,358 
Teladoc, Inc.1,666 — 360 1,306 
Telesoft Holdings, LLC2,273 1,515 — 758 
Ten-X, LLC4,680 4,680 — — 
TGG TS Acquisition Company1,750 500 — 1,250 
The Emmes Company, LLC2,449 2,449 — — 
THLP CO. LLC10,112 2,247 — 7,865 
Tidewater Consumer Receivables, LLC1,667 1,537 — 130 
TNT Crust LLC4,228 748 — 3,480 
TricorBraun Holdings, Inc.5,625 5,250 — 375 
Truck-Lite Co., LLC6,759 1,962 85 4,712 
Turbo Buyer, Inc.3,028 923 — 2,105 
U.S. Auto Finance, Inc.20,000 3,052 — 16,948 
USLS Acquisition, Inc.1,608 1,522 86 — 
Vertafore, Inc.15,000 — 424 14,576 
Westfall Technik, Inc.14,849 2,020 — 12,829 
Wildcat BuyerCo, Inc.3,913 — 3,905 
Wright Medical Group, Inc.70,000 7,666 — 62,334 
Total Commitments$999,922 $505,464 $9,014 $485,444 
____________________
* These investments are in a foreign currency and the total commitment has been converted to USD using the March 31, 2020 exchange rate.
(24)As of March 31, 2020, Dynamic Product Tankers, LLC had various classes of limited liability interests outstanding of which the Company holds Class A-1 and Class A-3 units which are identical except that Class A-1 unit is voting and Class A-3 unit is non-voting. The units entitle the Company to appoint three out of five managers to the board of managers.
(25)As of March 31, 2020, MSEA Tankers, LLC had various classes of limited liability interests outstanding of which the Company holds Class A-1 and Class A-2 units which are identical except that Class A-1 unit is voting and Class A-2 unit is non-voting. The units entitle the Company to appoint two out of three managers to the board of managers.
(26)This investment has matured but is still held for any potential future cash proceeds. No value has been attributed to these future recoveries.
(27)The maturity date for these investments are expected to be extended past March 31, 2020. The final terms of the extension are still under negotiation between the Company and the respective portfolio company.
See notes to financial statements.
153

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
(28)The following shows the composition of the Company’s portfolio at cost by control designation, investment type and industry as of March 31, 2020:
IndustryFirst Lien - Secured DebtSecond Lien - Secured DebtUnsecured DebtStructured Products and OtherPreferred EquityCommon Equity/InterestsWarrantsTotal
Non-Controlled / Non-Affiliated Investments
Advertising, Printing & Publishing$39,282 $5,503 $— $— $— $— $— $44,785 
Aerospace & Defense31,579 13,462 — — — — — 45,041 
Automotive41,171 23,489 — — — 2,064 — 66,724 
Aviation and Consumer Transport14,461 — — — — — — 14,461 
Beverage, Food & Tobacco96,973 — — — — 2,199 99,172 
Business Services223,967 150,982 — — 78 1,432 — 376,459 
Chemicals, Plastics & Rubber17,576 14,506 — — — — — 32,082 
Construction & Building29,111 — — — — 500 — 29,611 
Consumer Goods – Durable66,367 21,693 — — 462 100 — 88,622 
Consumer Goods – Non-Durable79,004 12,882 — — — — — 91,886 
Consumer Services104,237 24,842 — — — — — 129,079 
Containers, Packaging & Glass5,081 — — — — — — 5,081 
Diversified Investment Vehicles, Banking, Finance, Real Estate64,420 — — — — — — 64,420 
Education34,595 — — — — — 34,595 
Energy – Electricity7,637 — — — 5,861 — 13,502 
Environmental Industries30,764 — — — — — 30,764 
Food & Grocery15,319 — — — — — — 15,319 
Healthcare & Pharmaceuticals416,793 60,914 — — 333 1,064 135 479,239 
High Tech Industries361,359 — — — 1,500 — 48 362,907 
Hotel, Gaming, Leisure, Restaurants2,500 — — — — — — 2,500 
Insurance65,337 — — — — — — 65,337 
Manufacturing, Capital Equipment36,835 7,937 — — — 250 — 45,022 
Media – Diversified & Production43,020 — — — — — — 43,020 
Metals & Mining581 — — — — — — 581 
Retail47,879 — — — — — — 47,879 
Telecommunications11,317 12,788 — — — — — 24,105 
Transportation – Cargo, Distribution32,039 — — — — — — 32,039 
Wholesale13,816 — — — — 500 — 14,316 
Total Non-Controlled / Non-Affiliated Investments$1,933,020 $348,998 $— $— $8,234 $8,113 $183 $2,298,548 
Non-Controlled / Affiliated Investments
Chemicals, Plastics & Rubber$30,168 $— $— $— $— $46,289 $— $76,457 
Diversified Investment Vehicles, Banking, Finance, Real Estate— — — 16,729 — — — 16,729 
Energy – Electricity— — — — 14,445 10,893 — 25,338 
Energy – Oil & Gas— — — — — 16,822 — 16,822 
Total Non-Controlled / Affiliated Investments$30,168 $— $— $16,729 $14,445 $74,004 $— $135,346 
Controlled Investments
Aviation and Consumer Transport$305,300 $— $— $— $— $15,000 $— $320,300 
Energy – Oil & Gas113,378 36,926 — — — 31,489 — 181,793 
Transportation – Cargo, Distribution41,870 — — — — 111,756 — 153,626 
Total Controlled Investments$460,548 $36,926 $— $— $— $158,245 $— $655,719 
Total$2,423,736 $385,924 $— $16,729 $22,679 $240,362 $183 $3,089,613 
See notes to financial statements.
154

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
(29)The following shows the composition of the Company’s portfolio at fair value by control designation, investment type and industry as of March 31, 2020:
IndustryFirst Lien - Secured DebtSecond Lien - Secured DebtUnsecured DebtStructured Products and OtherPreferred EquityCommon Equity/InterestsWarrantsTotal
Non-Controlled / Non-Affiliated Investments
Advertising, Printing & Publishing$38,074$4,882$$$$$$42,9564.2 %
Aerospace & Defense30,90212,35343,2554.2 %
Automotive39,51322,22049162,2246.1 %
Aviation and Consumer Transport13,98413,9841.4 %
Beverage, Food & Tobacco96,0482,36898,4169.6 %
Business Services217,036142,390781,127360,63135.2 %
Chemicals, Plastics & Rubber17,09414,67131,7653.1 %
Construction & Building28,41555828,9732.8 %
Consumer Goods – Durable53,62120,63923151875,0097.3 %
Consumer Goods – Non-durable77,28312,28989,5728.7 %
Consumer Services99,01824,282123,30012.0 %
Containers, Packaging & Glass5,1675,1670.5 %
Diversified Investment Vehicles, Banking, Finance, Real Estate63,37163,3716.2 %
Education34,20134,2013.3 %
Energy – Electricity3,7873,7870.4 %
Environmental Industries29,81129,8112.9 %
Food & Grocery15,22215,2221.5 %
Healthcare & Pharmaceuticals406,94156,62733297688464,96445.4 %
High Tech Industries340,0321,50048341,58033.4 %
Hotel, Gaming, Leisure, Restaurants2,4252,4250.2 %
Insurance63,00663,0066.2 %
Manufacturing, Capital Equipment35,6447,53818743,3694.2 %
Media – Diversified & Production41,85641,8564.1 %
Metals & Mining— %
Retail46,83946,8394.6 %
Telecommunications10,31010,81821,1282.1 %
Transportation – Cargo, Distribution31,09831,0983.0 %
Wholesale13,08733113,4181.3 %
Total Non-Controlled / Non-Affiliated Investments$1,853,785$328,709$$$2,141$6,556$136$2,191,327213.9 %
% of Net Assets181.0 %32.1 %— %— %0.2 %0.6 %— %213.9 %
Non-Controlled / Affiliated Investments
Chemicals, Plastics & Rubber$17,500$$$$$15,105$$32,6053.2 %
Diversified Investment Vehicles, Banking, Finance, Real Estate9,7489,7481.0 %
Energy – Electricity5,8279,65015,4771.5 %
Energy – Oil & Gas2,4112,4110.2 %
Total Non-Controlled / Affiliated Investments$17,500$$$9,748$5,827$27,166$$60,2415.9 %
% of Net Assets1.7 %— %— %1.0 %0.6 %2.6 %— %5.9 %
See notes to financial statements.
155

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
IndustryFirst Lien - Secured DebtSecond Lien - Secured DebtUnsecured DebtStructured Products and OtherPreferred EquityCommon Equity/InterestsWarrantsTotal
Controlled Investments
Aviation and Consumer Transport$305,300$$$$$28,447$$333,74732.6 %
Energy – Oil & Gas47,21514,71161,9266.0 %
Transportation – Cargo, Distribution42,00096,192138,19213.5 %
Total Controlled Investments$394,515$14,711$$$$124,639$$533,86552.1 %
% of Net Assets38.5 %1.4 %— %— %— %12.2 %— %52.1 %
Total$2,265,800$343,420$$9,748$7,968$158,361$136$2,785,433271.9 %
% of Net Assets221.2 %33.5 %— %1.0 %0.8 %15.4 %0.0 %271.9 %



















































See notes to financial statements.
156

APOLLO INVESTMENT CORPORATION
SCHEDULE OF INVESTMENTS
March 31, 2020
(In thousands, except share data)
Industry ClassificationPercentage of Total Investments (at Fair Value) as of March 31, 2020
Healthcare & Pharmaceuticals16.7%
Business Services12.9%
Aviation and Consumer Transport12.5%
High Tech Industries12.3%
Transportation – Cargo, Distribution6.1%
Consumer Services4.4%
Beverage, Food & Tobacco3.5%
Consumer Goods – Non-durable3.2%
Consumer Goods – Durable2.7%
Diversified Investment Vehicles, Banking, Finance, Real Estate2.6%
Chemicals, Plastics & Rubber2.3%
Energy – Oil & Gas2.3%
Insurance2.3%
Automotive2.2%
Retail1.7%
Manufacturing, Capital Equipment1.6%
Aerospace & Defense1.6%
Advertising, Printing & Publishing1.5%
Media – Diversified & Production1.5%
Education1.2%
Environmental Industries1.1%
Construction & Building1.0%
Telecommunications0.8%
Energy – Electricity0.7%
Food & Grocery0.5%
Wholesale0.5%
Containers, Packaging & Glass0.2%
Hotel, Gaming, Leisure, Restaurants0.1%
Metals & Mining0.0%
Total Investments100.0%
See notes to financial statements.
157

APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS
(In thousands, except share and per share data)

Note 1. Organization
Apollo Investment Corporation (the “Company,” “Apollo Investment,” “AIC,” “we,” “us,” or “our”), a Maryland corporation incorporated on February 2, 2004, is a closed-end, externally managed, non-diversified management investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). In addition, for tax purposes we have elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). We commenced operations on April 8, 2004 receiving net proceeds of $870,000 from our initial public offering by selling 62 million shares of common stock at a price of $15.00 per share (20.7 million shares at a price of $45.00 per share adjusted for the one-for-three reverse stock split). Since then, and through March 31, 2021, we have raised approximately $2,210,067 in net proceeds from additional offerings of common stock and repurchased common stock for $223,072.
Apollo Investment Management, L.P. (the “Investment Adviser” or “AIM”) is our investment adviser and an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (“AGM”). The Investment Adviser, subject to the overall supervision of our Board of Directors, manages the day-to-day operations of and provides investment advisory services to the Company.
Apollo Investment Administration, LLC (the “Administrator” or “AIA”), an affiliate of AGM, provides, among other things, administrative services and facilities for the Company. Furthermore, AIA provides on our behalf managerial assistance to those portfolio companies to which we are required to provide such assistance.
Our investment objective is to generate current income and capital appreciation. We invest primarily in various forms of debt investments, including secured and unsecured debt, loan investments, and/or equity in private middle-market companies. We may also invest in the securities of public companies and in structured products and other investments such as collateralized loan obligations (“CLOs”) and credit-linked notes (“CLNs”). Our portfolio is comprised primarily of investments in debt, including secured and unsecured debt of private middle-market companies that, in the case of senior secured loans, generally are not broadly syndicated and whose aggregate tranche size is typically less than $250 million. Our portfolio may include equity interests such as common stock, preferred stock, warrants and/or options.
Note 2. Significant Accounting Policies
The following is a summary of the significant accounting and reporting policies used in preparing the financial statements.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) pursuant to the requirements on Form 10-K, ASC 946, Financial Services — Investment Companies (“ASC 946”), and Articles 6, 10 and 12 of Regulation S-X. In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair presentation of the financial statements for the periods presented, have been included.
Under the 1940 Act, ASC 946, and the regulations pursuant to Article 6 of Regulation S-X, we are precluded from consolidating any entity other than another investment company or an operating company which provides substantially all of its services to benefit us.
Use of Estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amounts of income, expenses, gains and losses during the reported periods. Changes in the economic environment, financial markets, credit worthiness of our portfolio companies, the global outbreak of a novel coronavirus (COVID-19) during 2020, and any other parameters used in determining these estimates could cause actual results to differ materially.

158




APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
The World Health Organization has designated COVID-19 as a pandemic, and numerous countries, including the United States, have declared national emergencies with respect to COVID-19. The global impact of the outbreak has been rapidly evolving, and as cases of COVID-19 have continued to be identified in additional countries, many countries have reacted by instituting quarantines and restrictions on travel, closing financial markets and/or restricting trading, and limiting operations of nonessential businesses. Such actions are creating disruption in global supply chains, and adversely impacting many industries. The outbreak has had and could continue to have a continued an adverse impact on economic and market conditions. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19 on economic and market conditions. The Company believes the estimates and assumptions underlying our financial statements are reasonable and supportable based on the information available as of March 31, 2021. However uncertainty over the ultimate impact COVID-19 will have on the global economy generally, and the Company’s business in particular, makes any estimates and assumptions as of March 31, 2021 inherently less certain than they would be absent the current and potential impacts of COVID-19. Actual results may ultimately differ from those estimates.
Cash and Cash Equivalents

The Company defines cash equivalents as securities that are readily convertible into known amounts of cash and near maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only securities with a maturity of three months or less from the date of purchase would qualify, with limited exceptions. The Company deems that certain money market funds, U.S. Treasury bills, repurchase agreements, and other high-quality, short-term debt securities would qualify as cash equivalents.
Cash and cash equivalents are carried at cost which approximates fair value. Cash equivalents held as of March 31, 2021 was $50,180. Cash equivalents held as of March 31, 2020 was $37,301.
Collateral on Option Contracts
Collateral on option contracts represents restricted cash held by our counterparty as collateral against our derivative instruments until such contracts mature or are settled upon per agreement of buyer and seller of the contract. In accordance with Accounting Standards Update No. 2016-18, Statement of Cash Flows: Restricted Cash, the Statements of Cash Flows outline the changes in cash, including both restricted and unrestricted cash, cash equivalents and foreign currencies. As of March 31, 2021 and March 31, 2020 the company did not hold any derivative contracts.

Investment Transactions
Investments are recognized when we assume an obligation to acquire a financial instrument and assume the risks for gains and losses related to that instrument. Investments are derecognized when we assume an obligation to sell a financial instrument and forego the risks for gains or losses related to that instrument. Specifically, we record all security transactions on a trade date basis. Amounts for investments recognized or derecognized but not yet settled are reported as a receivable for investments sold and a payable for investments purchased, respectively, in the Statements of Assets and Liabilities.
Fair Value Measurements
The Company follows guidance in ASC 820, Fair Value Measurement (“ASC 820”), where fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are determined within a framework that establishes a three-tier hierarchy which maximizes the use of observable market data and minimizes the use of unobservable inputs to establish a classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, such as the risk inherent in a particular valuation technique used to measure fair value using a pricing model and/or the risk inherent in the inputs for the valuation technique. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability based on the information available. The inputs or methodology used for valuing assets or liabilities may not be an indication of the risks associated with investing in those assets or liabilities.

159


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
ASC 820 classifies the inputs used to measure these fair values into the following hierarchy:
Level 1: Quoted prices in active markets for identical assets or liabilities, accessible by us at the measurement date.
Level 2: Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.
Level 3: Unobservable inputs for the asset or liability.
In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each investment. The level assigned to the investment valuations may not be indicative of the risk or liquidity associated with investing in such investments. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may differ materially from the values that would be received upon an actual disposition of such investments.
Investment Valuation Process
Under procedures established by our Board of Directors, we value investments, including certain secured debt, unsecured debt and other debt securities with maturities greater than 60 days, for which market quotations are readily available, at such market quotations (unless they are deemed not to represent fair value). We attempt to obtain market quotations from at least two brokers or dealers (if available, otherwise from a principal market maker, primary market dealer or other independent pricing service). We utilize mid-market pricing as a practical expedient for fair value unless a different point within the range is more representative. If and when market quotations are unavailable or are deemed not to represent fair value, we typically utilize independent third party valuation firms to assist us in determining fair value. Accordingly, such investments go through our multi-step valuation process as described below. In each case, our independent third party valuation firms consider observable market inputs together with significant unobservable inputs in arriving at their valuation recommendations for such investments. Investments purchased within the quarter before the valuation date and debt investments with remaining maturities of 60 days or less may each be valued at cost with interest accrued or discount accreted/premium amortized to the date of maturity (although they are typically valued at available market quotations), unless such valuation, in the judgment of our Investment Adviser, does not represent fair value. In this case such investments shall be valued at fair value as determined in good faith by or under the direction of our Board of Directors including using market quotations where available. Investments that are not publicly traded or whose market quotations are not readily available are valued at fair value as determined in good faith by or under the direction of our Board of Directors. Such determination of fair values may involve subjective judgments and estimates.
With respect to investments for which market quotations are not readily available or when such market quotations are deemed not to represent fair value, our Board of Directors has approved a multi-step valuation process each quarter, as described below:
1.Our quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of our Investment Adviser who are responsible for the portfolio investment.
2.Preliminary valuation conclusions are then documented and discussed with senior management of our Investment Adviser.
3.Independent valuation firms are engaged by our Board of Directors to conduct independent appraisals by reviewing our Investment Adviser’s preliminary valuations and then making their own independent assessment.
4.The Audit Committee of the Board of Directors reviews the preliminary valuation of our Investment Adviser and the valuation prepared by the independent valuation firms and responds, if warranted, to the valuation recommendation of the independent valuation firms.
5.The Board of Directors discusses valuations and determines in good faith the fair value of each investment in our portfolio based on the input of our Investment Adviser, the applicable independent valuation firm, and the Audit Committee of the Board of Directors.

160


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
6.For Level 3 investments entered into within the current quarter, the cost (purchase price adjusted for accreted original issue discount/amortized premium) or any recent comparable trade activity on the security investment shall be considered to reasonably approximate the fair value of the investment, provided that no material change has since occurred in the issuer’s business, significant inputs or the relevant environment.
Investments determined by these valuation procedures which have a fair value of less than $1 million during the prior fiscal quarter may be valued based on inputs identified by the Investment Adviser without the necessity of obtaining valuation from an independent valuation firm, if once annually an independent valuation firm using the procedures described herein provides an independent assessment of value. Investments in all asset classes are valued utilizing a market approach, an income approach, or both approaches, as appropriate. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation techniques to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that we may take into account in fair value pricing our investments include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, seniority of investment in the investee company’s capital structure, call protection provisions, information rights, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, our principal market (as the reporting entity) and enterprise values, among other factors. When readily available, broker quotations and/or quotations provided by pricing services are considered as an input in the valuation process. During the year ended March 31, 2021, there were no significant changes to the Company’s valuation techniques and related inputs considered in the valuation process.
Derivative Instruments
The Company recognizes all derivative instruments as assets or liabilities at fair value in its financial statements. Derivative contracts entered into by the Company are not designated as hedging instruments, and as a result the Company presents changes in fair value and realized gains or losses through current period earnings.
Derivative instruments are measured in terms of the notional contract amount and derive their value based upon one or more underlying instruments. Derivative instruments are subject to various risks similar to non-derivative instruments including market, credit, liquidity, and operational risks. The Company manages these risks on an aggregate basis as part of its risk management process. The derivatives may require the Company to pay or receive an upfront fee or premium. These upfront fees or premiums are carried forward as cost or proceeds to the derivatives.
Exchange-traded derivatives which include put and call options are valued based on the last reported sales price on the date of valuation. Over-the-counter (“OTC”) derivatives, including credit default swaps, are valued by the Investment Adviser using quotations from counterparties. In instances where models are used, the value of the OTC derivative is derived from the contractual terms of, and specific risks inherent in, the instrument as well as the availability and reliability of observable inputs, such as credit spreads.

As of March 31, 2021 and March 31, 2020 the company did not hold any derivative contracts.
Offsetting Assets and Liabilities
The Company has elected not to offset cash collateral against the fair value of derivative contracts. The fair values of these derivatives are presented on a gross basis, even when derivatives are subject to master netting agreements. The Company’s disclosures regarding offsetting are discussed in Note 7 to the financial statements.

As of March 31, 2021 and March 31, 2020 the company did not hold any derivative contracts.


161


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
Valuation of Other Financial Assets and Financial Liabilities

ASC 825, Financial Instruments, permits an entity to choose, at specified election dates, to measure certain assets and liabilities at fair value (the “Fair Value Option”). We have not elected the Fair Value Option to report selected financial assets and financial liabilities. Debt issued by the Company is reported at amortized cost (see Note 8 to the financial statements). The carrying value of all other financial assets and liabilities approximates fair value due to their short maturities or their close proximity of the originations to the measurement date.
Realized Gains or Losses
Security transactions are accounted for on a trade date basis. Realized gains or losses on investments are calculated by using the specific identification method. Securities that have been called by the issuer are recorded at the call price on the call effective date.
Investment Income Recognition
The Company records interest and dividend income, adjusted for amortization of premium and accretion of discount, on an accrual basis. Some of our loans and other investments, including certain preferred equity investments, may have contractual payment-in-kind (“PIK”) interest or dividends. PIK income computed at the contractual rate is accrued into income and reflected as receivable up to the capitalization date. PIK investments offer issuers the option at each payment date of making payments in cash or in additional securities. When additional securities are received, they typically have the same terms, including maturity dates and interest rates as the original securities issued. On these payment dates, the Company capitalizes the accrued interest or dividends receivable (reflecting such amounts as the basis in the additional securities received). PIK generally becomes due at maturity of the investment or upon the investment being called by the issuer. At the point the Company believes PIK is not fully expected to be realized, the PIK investment will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest or dividends are reversed from the related receivable through interest or dividend income, respectively. The Company does not reverse previously capitalized PIK interest or dividends. Upon capitalization, PIK is subject to the fair value estimates associated with their related investments. PIK investments on non-accrual status are restored to accrual status if the Company believes that PIK is expected to be realized.
Investments that are expected to pay regularly scheduled interest and/or dividends in cash are generally placed on non-accrual status when principal or interest/dividend cash payments are past due 30 days or more and/or when it is no longer probable that principal or interest/dividend cash payments will be collected. Such non-accrual investments are restored to accrual status if past due principal and interest or dividends are paid in cash, and in management’s judgment, are likely to continue timely payment of their remaining interest or dividend obligations. Interest or dividend cash payments received on non-accrual designated investments may be recognized as income or applied to principal depending upon management’s judgment.
Loan origination fees, original issue discount (“OID”), and market discounts are capitalized and accreted into interest income over the respective terms of the applicable loans using the effective interest method or straight-line, as applicable. Upon the prepayment of a loan, prepayment premiums, any unamortized loan origination fees, OID, or market discounts are recorded as interest income. Other income generally includes amendment fees, bridge fees, and structuring fees which are recorded when earned.
The Company records as dividend income the accretable yield from its beneficial interests in structured products such as CLOs based upon a number of cash flow assumptions that are subject to uncertainties and contingencies. Such assumptions include the rate and timing of principal and interest receipts (which may be subject to prepayments and defaults) of the underlying pool of assets. These assumptions are updated on at least a quarterly basis to reflect changes related to a particular security, actual historical data, and market changes. A structured product investment typically has an underlying pool of assets. Payments on structured product investments are and will be payable solely from the cash flows from such assets. As such, any unforeseen event in these underlying pools of assets might impact the expected recovery of principal and future accrual of income.
Expenses
Expenses include management fees, performance-based incentive fees, interest expense, insurance expenses, administrative service fees, legal fees, directors’ fees, audit and tax service expenses, third-party valuation fees and other general and administrative expenses. Expenses are recognized on an accrual basis.
162


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
Financing Costs
The Company records expenses related to shelf filings and applicable offering costs as deferred financing costs in the Statements of Assets and Liabilities. To the extent such expenses relate to equity offerings, these expenses are charged as a reduction of capital upon utilization, in accordance with ASC 946-20-25, or charged to expense if no offering is completed.
The Company records origination and other expenses related to its debt obligations as deferred financing costs. The deferred financing cost for all outstanding debt is presented as a direct deduction from the carrying amount of the related debt liability, except that incurred under the Senior Secured Facility (as defined in Note 8 to the financial statements), which the Company presents as an asset on the Statements of Assets and Liabilities. These expenses are deferred and amortized as part of interest expense using the straight-line method over the stated life of the obligation which approximates the effective yield method. In the event that we modify or extinguish our debt before maturity, the Company follows the guidance in ASC 470-50, Modification and Extinguishments (“ASC 470-50”). For modifications to or exchanges of our Senior Secured Facility (as defined in Note 8 to the financial statements), any unamortized deferred financing costs relating to lenders who are not part of the new lending group are expensed. For extinguishments of our senior secured notes and senior unsecured notes, any unamortized deferred financing costs are deducted from the carrying amount of the debt in determining the gain or loss from the extinguishment.
Foreign Currency Translations
The accounting records of the Company are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the foreign exchange rate on the date of valuation. The Company does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. The Company’s investments in foreign securities may involve certain risks, including without limitation: foreign exchange restrictions, expropriation, taxation or other political, social or economic risks, all of which could affect the market and/or credit risk of the investment. In addition, changes in the relationship of foreign currencies to the U.S. dollar can significantly affect the value of these investments and therefore the earnings of the Company.
Dividends and Distributions
Dividends and distributions to common stockholders are recorded as of the ex-dividend date. The amount to be paid out as a distribution is determined by the Board of Directors each quarter. Net realized capital gains, if any, are generally distributed or deemed distributed at least annually. Dividend income on common equity securities is recorded on the record date for private portfolio companies or on the ex-dividend date for publicly traded portfolio companies.
Share Repurchases
In connection with the Company’s share repurchase program, the cost of shares repurchased is charged to net assets on the trade date.
Federal and State Income Taxes
We have elected to be treated as a RIC under the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, the Company must (among other requirements) meet certain source-of-income and asset diversification requirements and timely distribute to its stockholders at least 90% of its investment company taxable income as defined by the Code, for each year. The Company (among other requirements) has made and intends to continue to make the requisite distributions to its stockholders, which will generally relieve the Company from corporate-level income taxes. For income tax purposes, distributions made to stockholders are reported as ordinary income, capital gains, non-taxable return of capital, or a combination thereof. The tax character of distributions paid to stockholders through March 31, 2021 may include return of capital, however, the exact amount cannot be determined at this point. The final determination of the tax character of distributions will not be made until we file our tax return for the tax year ending March 31, 2021. The character of income and gains that we will distribute is determined in accordance with income tax regulations that may differ from GAAP. Book and tax basis differences relating to stockholder dividend and distributions and other permanent book and tax difference are reclassified to paid-in capital.
163


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
If we do not distribute (or are not deemed to have distributed) at least 98% of our annual ordinary income and 98.2% of our capital gains in the calendar year earned, we will generally be required to pay excise tax equal to 4% of the amount by which 98% of our annual ordinary income and 98.2% of our capital gains exceed the distributions from such taxable income for the year. To the extent that we determine that our estimated current year annual taxable income will be in excess of estimated current year dividend distributions from such taxable income, we accrue excise taxes, if any, on estimated undistributed taxable income.
If we fail to satisfy the annual distribution requirement or otherwise fail to qualify as a RIC in any taxable year, we would be subject to tax on all of our taxable income at regular corporate rates. Distribution would generally be taxable to our individual and other non-corporate taxable stockholders as ordinary dividend income eligible for the reduced maximum rate applicable to qualified dividend income to the extent of our current and accumulated earnings and profits provided certain holding period and other requirements are met. Subject to certain limitation under the Code, corporate distributions would be eligible for the dividend-received deduction. To qualify again to be taxed as a RIC in a subsequent year, we would be required to distribute to our stockholders our accumulated earnings and profits attributable to non-RIC years. In addition, if we failed to qualify as a RIC for a period greater than two taxable years, then, in order to qualify as a RIC in a subsequent year, we would be required to elect to recognize and pay tax on any net built-in gain (the excess of aggregate gain, including items of income, over aggregate loss that would have been realized if we had been liquidated) or, alternatively, be subject to taxation on such built-in gain recognized for a period of five years.
We follow ASC 740, Income Taxes (“ASC 740”). ASC 740 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Penalties or interest, if applicable, that may be assessed relating to income taxes would be classified as other operating expenses in the financial statements. As of March 31, 2021, there were no uncertain tax positions and no amounts accrued for interest or penalties. Management’s determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors including, but not limited to, an on-going analysis of tax laws, regulations and interpretations thereof. Although we file both federal and state income tax returns, our major tax jurisdiction is federal. Our tax returns for each of our federal tax years since 2017 remain subject to examination by the Internal Revenue Service.
Retroactive Adjustments for Common Stock Reverse Split
The Company’s Board of Directors approved a one-for-three reverse stock split of the Company’s common stock on October 30, 2018 which was effective as of close of business November 2018 (the “Reverse Stock Split”). All common share and common per share amounts in the financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split as disclosed in Note 9.
Recent Accounting Pronouncements
In March 2020, the FASB issued Accounting Standards Update No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is evaluating the potential impact that the adoption of this guidance will have on the Company’s financial statements.

164


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
SEC Disclosure Update and Simplification
In August 2020, the U.S. Securities and Exchange Commission (“SEC”) issued Final Rule Release No. 33-10825 and No.34-89670, collectively referred to as 'Modernization of Regulation S-X Items 101, 103 and 105’. These rules amend certain SEC disclosure requirements to improve disclosure for investors and to simplify compliance for registrants, including new requirements for human capital disclosures and a summary of risk factors. The final rules were effective for all filings on or after November 9, 2020. The Company has evaluated the impact of the amendments and determined the effect of the adoption of the simplification rules on the financial statements were limited to the modification of certain disclosures.
On May 21, 2020, the SEC revised its measure of “significant subsidiary” set forth in Rule 1-02(w)(2) for investment companies. The new definition includes an alternative income measure to determine a “significant subsidiary”. The final rule was effective on January 1, 2021. The Company has implemented this new rule for the current period. See Note 5 to the financial statements for more information on the Company’s unconsolidated significant subsidiaries.
In November 2020, the SEC issued Final Rule Release No. 33-10890, which amended certain SEC disclosure requirements to primarily enhance and simplify Management’s Discussion and Analysis and supplementary financial information. The final rule is effective for all filings on or after February 10, 2021. The Company has implemented this new rule for the current period.
In December 2020, The SEC adopted Rule 2a-5. The Rule establishes a consistent, principles-based framework for boards of directors to use in creating their own specific processes in order to determine fair values in good faith. The effective date for compliance with Rule 2a-5 is September 8, 2022. The Company is evaluating the potential impact that the rule will have on the Company’s financial statements.
Note 3. Related Party Agreements and Transactions
Investment Advisory Agreement with AIM
The Company has an investment advisory management agreement with the Investment Adviser (the “Investment Advisory Agreement”) under which AIM receives a fee from the Company, consisting of two components — a base management fee and a performance-based incentive fee.
Base Management Fee
Effective April 1, 2018, the base management fee is calculated initially at an annual rate of 1.50% (0.375% per quarter) of the lesser of (i) the average of the value of the Company’s gross assets, net of average of any payable for investments (excluding cash or cash equivalents but including other assets purchased with borrowed amounts) at the end of each of the two most recently completed calendar quarters and (ii) the average monthly value (measured as of the last day of each month) of the Company’s gross assets (excluding cash or cash equivalents but including other assets purchased with borrowed amounts) during the most recently completed calendar quarter; provided, however, in each case, the base management fee is calculated at an annual rate of 1.00% (0.250% per quarter) of the average of the value of the Company’s gross assets (excluding cash or cash equivalents but including other assets purchased with borrowed amounts) that exceeds the product of (A) 200% and (B) the value of the Company’s net asset value at the end of the prior calendar quarter. The base management fee will be payable quarterly in arrears. The value of the Company’s gross assets shall be calculated in accordance with the Company's valuation policies.
Performance-based Incentive Fee
The incentive fee (the “Incentive Fee”) consists of two components that are determined independent of each other, with the result that one component may be payable even if the other is not. A portion of the Incentive Fee is based on income and a portion is based on capital gains, each as described below:

165


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
A. Incentive Fee based on Income
(i)     Incentive Fee on Pre-Incentive Fee Net Investment Income - (April 1, 2017 - December 31, 2018)
The first part of the incentive fee is calculated and payable quarterly in arrears based on our pre-incentive fee net investment income for the immediately preceding calendar quarter at an annual rate of 20%. For this purpose, pre-incentive fee net investment income means interest income, dividend income and any other income (including, without limitation, any accrued income that the Company has not yet received in cash and any other fees such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the Company’s operating expenses accrued during the calender quarter (including, without limitation, the Base Management Fee, administration expenses and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the Incentive Fee on Income and the Incentive Fee on Capital Gains). Pre-incentive fee net investment income does not include any realized or unrealized gains or losses. Pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter, is compared to the rate of 1.75% per quarter (7% annualized) (the “performance threshold”). For the period from April, 2017 through December 31, 2018, if the resulting incentive fee rate was less than 20% due to the incentive fee waiver discussed below, the percentage at which the Investment Adviser’s 100% catch-up is complete would also be reduced ratably from 2.1875% (8.75% annualized) to as low as 2.06% (8.24% annualized) (“catch-up threshold”).
The Company pays the Investment Adviser an incentive fee with respect to our pre-incentive fee net investment income in each calendar quarter as follows: (1) no incentive fee in any calendar quarter in which our pre-incentive fee net investment income does not exceed the performance threshold; and (2) 100% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds 1.75% but does not exceed the catch-up threshold in any calendar quarter; and (3) for the period from April 1, 2017 through December 31, 2018, 15% to 20% of the amount of our pre-incentive fee net investment income, if any, that exceeds the catch-up threshold in any calendar quarter. These calculations are appropriately prorated for any period of less than three months. The effect of the fee calculation described above is that if pre-incentive fee net investment income is equal to or exceeds the catch-up threshold, the Investment Adviser will receive a fee of 15% to 20% of our pre-incentive fee net investment income for the quarter.
Incentive Fee Waiver
For the period from April 1, 2018 through December 31, 2018, the Investment Adviser has agreed to waive 25% of its performance based incentive fee so that the incentive fee on pre-incentive fee net investment income is accrued at 15%.
(ii)     Incentive Fee on Pre-Incentive Fee Net Income - effective from January 1, 2019
Beginning January 1, 2019, the incentive fee on pre-incentive fee net investment income will be determined and paid quarterly in arrears by calculating the amount by which (x) the aggregate amount of the pre-incentive fee net investment income with respect of the current calendar quarter and each of the eleven preceding calendar quarters beginning with the calendar quarter that commences on or after April 1, 2018 (the “trailing twelve quarters”) exceeds (y) the preferred return amount in respect of the trailing twelve quarters.
The preferred return amount will be determined on a quarterly basis, and will be calculated by summing the amounts obtained by multiplying 1.75% by the Company’s net asset value at the beginning of each applicable calendar quarter comprising the relevant trailing twelve quarters. The preferred return amount will be calculated after making appropriate adjustments to the Company’s net asset value at the beginning of each applicable calendar quarter for Company capital issuances and distributions during the applicable calendar quarter.

166


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
The amount of the Incentive Fee on Income that will be paid to the Investment Adviser for a particular quarter will equal the excess of the incentive fee on pre-incentive fee net investment income, so calculated less the aggregate incentive fee on pre-incentive fee net investment income that were paid to the Investment Adviser (excluding waivers, if any) in the preceding eleven calendar quarters comprising the relevant trailing twelve quarters.
The Company will pay the Investment Adviser an incentive fee with respect to our pre-incentive fee net investment income in each calendar quarter as follows:
(1) no incentive fee in any calendar quarter in which our pre-incentive fee net investment income for the trailing twelve quarters does not exceed the preferred return amount.
(2) 100% of our pre-incentive fee net investment income for the trailing twelve quarters, if any, that exceeds the preferred return amount but is less than or equal to an amount (the “catch-up amount”) determined by multiplying 2.1875% by the Company’s net asset value at the beginning of each applicable calendar quarter comprising the relevant trailing twelve quarters.
(3) for any quarter in which the Company’s pre-incentive fee net investment income for the trailing twelve quarters exceeds the catch-up amount, the incentive fee shall equal 20% of the amount of the Company’s pre-incentive fee net investment income for such trailing twelve quarters.
The Incentive Fee on Income as calculated is subject to a cap (the “Incentive Fee Cap”). The Incentive Fee Cap in any quarter is an amount equal to (a) 20% of the Cumulative Pre-Incentive Fee Net Return (as defined below) during the relevant trailing twelve quarters less (b) the aggregate Incentive Fees on Income that were paid to the Investment Adviser (excluding waivers, if any) in the preceding eleven calendar quarters (or portion thereof) comprising the relevant trailing twelve quarters.

For this purpose, “Cumulative Pre-Incentive Fee Net Return” during the relevant trailing twelve quarters means (x) Pre-Incentive Fee Net Investment Income in respect of the trailing twelve quarters less (y) any Net Capital Loss, since April 1, 2018, in respect of the trailing twelve quarters. If, in any quarter, the Incentive Fee Cap is zero or a negative value, the Company shall pay no Incentive Fee on Income to the Investment Adviser in that quarter. If, in any quarter, the Incentive Fee Cap is a positive value but is less than the Incentive Fee on Income calculated in accordance with the calculation described above, the Company shall pay the Investment Adviser the Incentive Fee Cap for such quarter. If, in any quarter, the Incentive Fee Cap is equal to or greater than the Incentive Fee on Income calculated in accordance with the calculation described above, the Company shall pay the Investment Adviser the Incentive Fee on Income for such quarter.
“Net Capital Loss” in respect of a particular period means the difference, if positive, between (i) aggregate capital losses, whether realized or unrealized, in such period and (ii) aggregate capital gains, whether realized or unrealized, in such period.
B. Incentive Fee Based on Cumulative Net Realized Gains
The Incentive Fee on Capital Gains is determined and payable in arrears as of the end of each calendar year (or upon termination of the investment advisory management agreement). This fee shall equal 20.0% of the sum of the Company’s realized capital gains on a cumulative basis, calculated as of the end of each calendar year (or upon termination of investment advisory management agreement), computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any Incentive Fees on Capital Gains previously paid to the Investment Adviser. The aggregate unrealized capital depreciation of the Company shall be calculated as the sum of the differences, if negative, between (a) the valuation of each investment in the Company’s portfolio as of the applicable calculation date and (b) the accreted or amortized cost basis of such investment.
For accounting purposes only, we are required under GAAP to accrue a theoretical capital gains incentive fee based upon net realized capital gains and unrealized capital gain and loss on investments held at the end of each period. The accrual of this theoretical capital gains incentive fee assumes all unrealized capital gain and loss is realized in order to reflect a theoretical capital gains incentive fee that would be payable to the Investment Adviser at each measurement date. There was no accrual for theoretical capital gains incentive fee for the years ended March 31, 2021 and 2020. It should be noted that a fee so calculated and accrued would not be payable under the Investment Advisers Act of 1940 (“the Advisers Act”) or the investment advisory management agreement, and would not be paid based upon such computation of capital gains incentive fees in subsequent periods. Amounts actually paid to the Investment Adviser will be consistent with the Advisers Act and formula reflected in the investment advisory management agreement which specifically excludes consideration of unrealized capital gain.
167


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
For the years ended March 31, 2021, 2020 and 2019, the Company recognized $36,434, $40,360 and $35,733, respectively, of management fees, and $0, $1,983 and $21,190, respectively, of incentive fees before impact of waived fees. For the years ended March 31, 2021, 2020 and 2019 no management fees were waived (as not applicable). For the years ended March 31, 2021 and 2020 no incentive fees were waived and for the year ended March 31, 2019, incentive fees waived were $5,542.
As of March 31, 2021 and March 31, 2020, management and performance-based incentive fees payable were $8,666 and $10,289, respectively.
Fee Offset

On January 16, 2019, the Company and AIM entered into a fee offset agreement in connection with revenue realized by AIM and its affiliates for the management of certain aircraft assets.  The Company will receive an offsetting credit against total incentive fees otherwise due to AIM under the investment advisory management agreement.  The amount offset will initially be 20% of the management fee revenue earned and incentive fee revenue realized by AIM and its affiliates in connection with managing aircraft assets on related insurance balance sheets (“New Balance Sheet Investments”), new aircraft managed account capital (“New Managed Accounts”) and new dedicated aircraft funds (“New Aircraft Funds”). Once the aggregate capital raised by the New Aircraft Funds or New Managed Accounts and capital invested by the New Balance Sheet Investments exceeds $3 billion cumulatively, the fee offset will step down to 10% of the amount of incremental management fee revenue earned and incentive fee revenue realized by AIM and its affiliates. The fee offset will be in place for seven years, however the incentive fees realized by AIM and its affiliates after this seven-year period from applicable investments that were raised or made within the seven-year period will also be used to offset incentive fees payable to AIM by the Company. The offset will be limited to the amount of incentive fee payable by the Company to AIM and any unapplied fee offset which exceeds the incentive fees payable in a given quarter will carry forward to be credited against the incentive fees payable by the Company in subsequent quarters.
For the years ended March 31, 2021, 2020 and 2019 management fee offset was $25, $0 and $0, respectively.
Administration Agreement with AIA
The Company has also entered into an administration agreement with the Administrator (the “Administration Agreement”) under which AIA provides administrative services for the Company. For providing these services, facilities and personnel, the Company reimburses the Administrator for the allocable portion of overhead and other expenses incurred by the Administrator and requested to be reimbursed by the Administrator in performing its obligations under the Administration Agreement. The expenses include rent and the Company’s allocable portion of compensation and other related expenses for its Chief Financial Officer, Chief Legal Officer and Chief Compliance Officer and their respective staffs. For the years ended March 31, 2021, 2020 and 2019, the Company recognized administrative services expense under the Administration Agreement of $4,765, $6,335 and $6,772, respectively. There was no payable to AIA and its affiliates for expenses paid on our behalf as of March 31, 2021 and March 31, 2020.
Administrative Service Expense Reimbursement
Merx Aviation Finance, LLC (“Merx”), a wholly-owned portfolio company of the Company, has entered into an administration agreement with the Administrator (the “Merx Administration Agreement”) under which AIA provides administrative services to Merx. For the years ended March 31, 2021, 2020 and 2019, the Company recognized administrative service expense reimbursements of $300, $300 and $250, respectively.
Debt Expense Reimbursements
The Company has also entered into debt expense reimbursement agreements with Merx and several other portfolio companies, which will reimburse the Company for reasonable out-of-pocket expenses incurred, including any interest, fees or other amounts incurred by the Company in connection with letters of credit issued on their behalf. For the years ended March 31, 2021, 2020 and 2019, the Company recognized debt expense reimbursements of $62, $133 and $273, respectively, under the debt expense reimbursement agreements.

168


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
Co-Investment Activity
We may co-invest on a concurrent basis with affiliates of ours, subject to compliance with applicable regulations and our allocation procedures. Certain types of negotiated co-investments may be made only in accordance with the terms of the exemptive order we received from the SEC permitting us to do so. On March 29, 2016, we received an exemptive order from the SEC (the “Order”) permitting us greater flexibility to negotiate the terms of co-investment transactions with certain of our affiliates, including investment funds managed by AIM or its affiliates, subject to the conditions included therein. Under the terms of the Order, a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors must be able to reach certain conclusions in connection with a co-investment transaction, including that (1) the terms of the proposed transaction are reasonable and fair to us and our stockholders and do not involve overreaching of us or our stockholders on the part of any person concerned, and (2) the transaction is consistent with the interests of our stockholders and is consistent with our Board of Directors’ approved criteria. In certain situations where co-investment with one or more funds managed by AIM or its affiliates is not covered by the Order, the personnel of AIM or its affiliates will need to decide which fund will proceed with the investment. Such personnel will make these determinations based on allocation policies and procedures, which are designed to reasonably ensure that investment opportunities are allocated fairly and equitably among affiliated funds over time and in a manner that is consistent with applicable laws, rules and regulations. The Order is subject to certain terms and conditions so there can be no assurance that we will be permitted to co-invest with certain of our affiliates other than in the circumstances currently permitted by regulatory guidance and the Order.
As of March 31, 2021, the Company’s co-investment holdings were 63% of the portfolio or $1,542,275, measured at fair value. On a cost basis, 57% of the portfolio or $1,545,567 were co-investments. As of March 31, 2020, the Company’s co-investment holdings were 59% of the portfolio or $1,653,269, measured at fair value. On a cost basis, 55% of the portfolio or $1,711,258 were co-investments.
Merx Aviation
Effective January 16, 2019, Mr. Gary Rothschild, President and Chief Executive Officer of Merx, became an employee of Apollo Management Holdings, L.P. ("AMH"), an affiliate of the Company’s investment adviser. Mr. Rothschild also retained his role as the President and Chief Executive Officer of Merx.

Effective January 16, 2019, Merx entered into a series of service arrangements with affiliates of AGM.  Under a servicing agreement with Apollo Capital Management, L.P. (“ACM”), Merx serves as technical servicer to aircraft clients of ACM and its affiliates.  Under a research support agreement with ACM, Merx employees assist ACM with technical due-diligence and underwriting of new aircraft-related investment opportunities.  Under a technical support agreement, Merx and AMH share the services of Mr. Gary Rothschild, who is the President and Chief Executive Officer of Merx and an employee of AMH.
On April 1, 2020, $105,300 of the Merx first lien secured revolver held by the Company was converted into common equity. In addition, the interest rate on the revolver was lowered from 12% to 10%. The balance of the Merx revolver as of March 31, 2021 was $190,500.
Note 4. Earnings Per Share
The following table sets forth the computation of earnings (loss) per share (“EPS”), pursuant to ASC 260-10, for the years ended March 31, 2021, 2020 and 2019:
 Year Ended March 31,
 202120202019
Basic and Diluted Earnings (Loss) Per Share
Net increase (decrease) in net assets resulting from operations$111,861 $(116,064)$71,946 
Weighted average shares outstanding65,259,176 67,228,771 70,645,944 
Basic and diluted earnings (loss) per share$1.71 $(1.73)$1.02 
169


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
Note 5. Investments
Fair Value Measurement and Disclosures
The following table shows the composition of our investment portfolio as of March 31, 2021, with the fair value disaggregated into the three levels of the fair value hierarchy in accordance with ASC 820:
 Fair Value Hierarchy
CostFair ValueLevel 1Level 2Level 3
First Lien Secured Debt$1,995,074 $1,907,807 $— $— $1,907,807 
Second Lien Secured Debt279,437 237,609 — — 237,609 
Unsecured Debt22,000 22,000 — — 22,000 
Structured Products and Other16,812 11,289 — — 11,289 
Preferred Equity40,703 22,537 — — 22,537 
Common Equity/Interests362,162 246,314 — 484 245,830 
Warrants211 1,595 — — 1,595 
Total Investments before Cash Equivalents$2,716,399 $2,449,151 $— $484 $2,448,667 
Money Market Fund$50,180 $50,180 $50,180 $— $— 
Total Cash Equivalents $50,180 $50,180 $50,180 $— $— 
Total Investments after Cash Equivalents$2,766,579 $2,499,331 $50,180 $484 $2,448,667 

The following table shows the composition of our investment and derivative portfolio as of March 31, 2020, with the fair value disaggregated into the three levels of the fair value hierarchy in accordance with ASC 820:
 Fair Value Hierarchy
CostFair ValueLevel 1Level 2Level 3
First Lien Secured Debt$2,423,736 $2,265,800 $— $— $2,265,800 
Second Lien Secured Debt385,924 343,420 — — 343,420 
Unsecured Debt— — — — — 
Structured Products and Other16,729 9,748 — — 9,748 
Preferred Equity22,679 7,968 — — 7,968 
Common Equity/Interests240,362 158,361 — 418 157,943 
Warrants183 136 — — 136 
Total Investments before Cash Equivalents$3,089,613 $2,785,433 $— $418 $2,785,015 
Money Market Fund$37,301 $37,301 $37,301 $— $— 
Total Cash Equivalents $37,301 $37,301 $37,301 $— $— 
Total Investments after Cash Equivalents$3,126,914 $2,822,734 $37,301 $418 $2,785,015 
170


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)

The following table shows changes in the fair value of our Level 3 investments during the year ended March 31, 2021:
First Lien Secured Debt (2)Second Lien Secured Debt (2)Unsecured DebtStructured Products and OtherPreferred EquityCommon Equity/InterestsWarrantsTotal
Fair value as of March 31, 2020$2,265,800 $343,420 $— $9,748 $7,968 $157,943 $136 $2,785,015 
Net realized gains (losses)(15,446)(2,906)— — (1,519)2,524 (48)(17,395)
Net change in unrealized gains (losses)70,671 676 — 1,458 (3,456)(33,916)1,431 36,864 
Net amortization on investments10,202 932 — — — — — 11,134 
Purchases, including capitalized PIK (3)683,284 2,171 22,000 83 19,764 138,148 76 865,526 
Sales (3)(1,106,704)(106,684)— — (220)(18,869)— (1,232,477)
Transfers out of Level 3 (1)— — — — — — — — 
Transfers into Level 3 (1)— — — — — — — — 
Fair value as of March 31, 2021$1,907,807 $237,609 $22,000 $11,289 $22,537 $245,830 $1,595 $2,448,667 
Net change in unrealized gains (losses) on Level 3 investments still held as of March 31, 2021$20,794 $(5,764)$— $1,458 $(3,456)$(36,640)$1,431 $(22,177)
____________________
(1)Transfers out of Level 3 are due to an increase in the quantity and reliability of broker quotes obtained and transfers into Level 3 are due to a decrease in the quantity and reliability of broker quotes obtained as assessed by the Investment Adviser. Transfers are assumed to have occurred at the end of the period. There were no transfers between Level 1 and Level 2 fair value measurements during the period shown.
(2)Includes unfunded commitments measured at fair value of $(5,446).
(3)Includes reorganizations and restructuring of investments.

171


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
The following table shows changes in the fair value of our Level 3 investments during the year ended March 31, 2020:
First Lien Secured Debt (2)Second Lien Secured Debt (2)Unsecured DebtStructured Products and OtherPreferred EquityCommon Equity/InterestsWarrantsTotal
Fair value as of March 31, 2019$1,586,931 $337,545 $— $45,595 $28,182 $183,754 $150 $2,182,157 
Net realized gains (losses)(9,464)— — 7,023 — (4,401)— (6,842)
Net change in unrealized gains (losses)(135,442)(30,649)— (9,451)(20,229)(52,886)(14)(248,671)
Net amortization on investments7,693 871 — 317 — — — 8,881 
Purchases, including capitalized PIK (3)1,902,442 7,255 — 84 15 55,459 — 1,965,255 
Sales (3)(1,086,360)(90,608)— (33,820)— (23,983)— (1,234,771)
Transfers out of Level 3 (1)— — — — — — — — 
Transfers into Level 3 (1)— 119,006 — — — — — 119,006 
Fair value as of March 31, 2020$2,265,800 $343,420 $— $9,748 $7,968 $157,943 $136 $2,785,015 
Net change in unrealized gains (losses) on Level 3 investments still held as of March 31, 2020$(142,749)$(38,785)$— $(3,272)$(20,229)$(61,386)$(14)$(266,435)
____________________
(1)Transfers out of Level 3 are due to an increase in the quantity and reliability of broker quotes obtained and transfers into Level 3 are due to a decrease in the quantity and reliability of broker quotes obtained as assessed by the Investment Adviser. Transfers are assumed to have occurred at the end of the period. There were no transfers between Level 1 and Level 2 fair value measurements during the period shown.
(2)Includes unfunded commitments measured at fair value of $(13,795).
(3)Includes reorganizations and restructuring of investments.

172


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
The following tables summarize the significant unobservable inputs the Company used to value its investments categorized within Level 3 as of March 31, 2021 and March 31, 2020. In addition to the techniques and inputs noted in the tables below, according to our valuation policy we may also use other valuation techniques and methodologies when determining our fair value measurements. The below tables are not intended to be all-inclusive, but rather provide information on the significant unobservable inputs as they relate to the Company’s determination of fair values.
The unobservable inputs used in the fair value measurement of our Level 3 investments as of March 31, 2021 were as follows:
  Quantitative Information about Level 3 Fair Value Measurements
Asset CategoryFair ValueValuation Techniques/MethodologiesUnobservable InputRangeWeighted Average (1)
First Lien Secured Debt$190,500 Discounted Cash FlowDiscount Rate7.5%12.0%12.0%
Residual ValueResidual ValueN/AN/AN/A
31,438 Recovery AnalysisRecoverable AmountN/AN/AN/A
Market Comparable TechniqueComparable Multiple0.7x1.4x1.1x
44,998 Recent TransactionRecent TransactionN/AN/AN/A
35,369 Recovery AnalysisCommodity Price54.0060.1659.86
398 Recovery AnalysisRecoverable AmountN/AN/AN/A
8,376 Recovery AnalysisSale ProceedsN/AN/AN/A
1,596,728 Yield AnalysisDiscount Rate4.1%32.3%8.5%
Second Lien Secured Debt12,795 Market Comparable ApproachComparable Multiple6.3x6.3x6.3x
8,111 Recovery AnalysisCommodity Price57.0062.3361.13
10,536 Recovery AnalysisSale ProceedsN/AN/AN/A
206,167 Yield AnalysisDiscount Rate9.3%14.9%11.5%
Unsecured Debt22,000 Discounted Cash FlowDiscount Rate16.0%16.0%16.0%
Residual ValueResidual ValueN/AN/AN/A
Structured Products and Other11,289 Discounted Cash FlowDiscount Rate9.0%9.0%9.0%
Preferred Equity498 Discounted Cash FlowDiscount Rate9.0%9.0%9.0%
16,863 Market Comparable TechniqueComparable Multiple0.7x13.2x8.7x
5,176 Option Pricing ModelExpected Volatility101.0%101.0%101.0%
— Yield AnalysisDiscount Rate32.3%32.3%0.0%
Common Equity/Interests2,053 Discounted Cash FlowDiscount Rate9.0%32.3%19.3%
207,617 Discounted Cash FlowDiscount Rate7.5%16.0%10.2%
Residual ValueResidual ValueN/AN/AN/A
7,977 Market Comparable TechniqueComparable Multiple0.7x16.5x9.9x
215 Option Pricing ModelExpected Volatility35.0%35.0%35.0%
374 Recent TransactionRecent TransactionN/AN/AN/A
2,170 Recovery AnalysisCommodity Price54.0062.3360.08
25,424 Recovery AnalysisImplied Illiquidity Discount18.5%18.5%18.5%
Recovery AnalysisTransaction PriceN/AN/AN/A
Warrants1,595 Option Pricing ModelExpected Volatility65.0%90.0%88.4%
Total Level 3 Investments$2,448,667 
___________________
(1)The weighted average information is generally derived by assigning each disclosed unobservable input a proportionate weight based on the fair value of the related investment. For the commodity price unobservable input, the weighted average price is an undiscounted price based upon the estimated production level from the underlying reserves.
173


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)

The unobservable inputs used in the fair value measurement of our Level 3 investments as of March 31, 2020 were as follows:
  Quantitative Information about Level 3 Fair Value Measurements
Asset CategoryFair ValueValuation Techniques/MethodologiesUnobservable InputRangeWeighted Average (1)
First Lien Secured Debt$347,299 Discounted Cash FlowDiscount Rate2.3%14.7%12.3%
61,471 Recovery AnalysisRecoverable AmountN/AN/AN/A
Market Comparable TechniqueComparable Multiple1.3x9.3x6.3x
96,729 Recent TransactionRecent TransactionN/AN/AN/A
47,215 Recovery AnalysisCommodity Price30.0057.5057.04
2,066 Recovery AnalysisLiquidationN/AN/AN/A
1,036 Recovery AnalysisRecoverable AmountN/AN/AN/A
1,709,984 Yield AnalysisDiscount Rate4.3%31.1%9.5%
Second Lien Secured Debt14,711 Recovery AnalysisCommodity Price34.0060.0056.25
328,709 Yield AnalysisDiscount Rate6.1%17.5%12.8%
Structured Products and Other9,748 Discounted Cash FlowDiscount Rate13.5%13.5%13.5%
Preferred Equity442 Discounted Cash FlowDiscount Rate13.5%13.5%13.5%
2,142 Market Comparable TechniqueComparable Multiple3.3x4.7x3.7x
5,384 Option Pricing ModelExpected Volatility47.0%47.0%47.0%
— Yield AnalysisDiscount Rate20.0%20.0%0.0%
Common Equity/Interests135,288 Discounted Cash FlowDiscount Rate12.2%31.3%14.9%
20,144 Market Comparable TechniqueComparable Multiple3.2x13.0x6.0x
100 Recent TransactionRecent TransactionN/AN/AN/A
2,411 Recovery AnalysisCommodity Price30.0060.0056.06
Warrants136 Option Pricing ModelExpected Volatility35.0%70.0%57.7%
— Recovery AnalysisLiquidationN/AN/AN/A
Total Level 3 Investments$2,785,015 
____________________
(1)The weighted average information is generally derived by assigning each disclosed unobservable input a proportionate weight based on the fair value of the related investment. For the commodity price unobservable input, the weighted average price is an undiscounted price based upon the estimated production level from the underlying reserves.
174


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
The significant unobservable inputs used in the fair value measurement of the Company’s debt and equity securities are primarily earnings before interest, taxes, depreciation and amortization (“EBITDA”) comparable multiples and market discount rates. The Company typically uses EBITDA comparable multiples on its equity securities to determine the fair value of investments. The Company uses market discount rates for debt securities to determine if the effective yield on a debt security is commensurate with the market yields for that type of debt security. If a debt security’s effective yield is significantly less than the market yield for a similar debt security with a similar credit profile, the resulting fair value of the debt security may be lower. For certain investments where fair value is derived based on a recovery analysis, the Company uses underlying commodity prices from third party market pricing services to determine the fair value and/or recoverable amount, which represents the proceeds expected to be collected through asset sales or liquidation. Further, for certain investments, the Company also considered the probability of future events which are not in management’s control. Significant increases or decreases in any of these inputs in isolation would result in a significantly lower or higher fair value measurement. The significant unobservable inputs used in the fair value measurement of the structured products include the discount rate applied in the valuation models in addition to default and recovery rates applied to projected cash flows in the valuation models. Specifically, when a discounted cash flow model is used to determine fair value, the significant input used in the valuation model is the discount rate applied to present value the projected cash flows. Increases in the discount rate can significantly lower the fair value of an investment; conversely decreases in the discount rate can significantly increase the fair value of an investment. The discount rate is determined based on the market rates an investor would expect for a similar investment with similar risks. For certain investments such as warrants, the Company may use an option pricing technique, of which the applicable method is the Black-Scholes Option Pricing Method (“BSM”), to perform valuations. The BSM is a model of price variation over time of financial instruments, such as equity, that is used to determine the price of call or put options. Various inputs are required but the primary unobservable input into the BSM model is the underlying asset volatility.
Investment Transactions
For the years ended March 31, 2021, 2020 and 2019, purchases of investments on a trade date basis were $617,096, $1,866,272 and $1,278,061, respectively. For the years ended March 31, 2021, 2020 and 2019, sales and repayments (including prepayments and unamortized fees) of investments on a trade date basis were $997,924, $1,265,631 and $1,086,779, respectively.
PIK Income
The Company holds loans and other investments, including certain preferred equity investments, that have contractual PIK income. PIK income computed at the contractual rate is accrued into income and reflected as receivable up to the capitalization date. During the years ended March 31, 2021, 2020 and 2019, PIK income earned was $6,506, $10,936 and $8,585, respectively.
The following table shows the change in capitalized PIK balance for the years ended March 31, 2021, 2020 and 2019:
Year Ended March 31,
202120202019
PIK balance at beginning of period$37,481 $23,720 $24,454 
PIK income capitalized6,774 20,083 6,412 
Adjustments due to investments exited or written off— — (2,446)
PIK income received in cash(2,308)(6,322)(4,700)
PIK balance at end of period $41,947 $37,481 $23,720 
175


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
Dividend Income on CLOs
The Company holds structured products and other investments. The CLO equity investments are entitled to recurring distributions which are generally equal to the excess cash flow generated from the underlying investments after payment of the contractual payments to debt holders and fund expenses. The Company records as dividend income the accretable yield from its beneficial interests in structured products such as CLOs based upon a number of cash flow assumptions that are subject to uncertainties and contingencies. During the years ended March 31, 2021, 2020 and 2019 dividend income from structured products was $1,308, $1,286 and $1,198, respectively.
Investments on Non-Accrual Status
As of March 31, 2021, 5.7% of total investments at amortized cost, or 1.4% of total investments at fair value, were on non-accrual status. As of March 31, 2020, 5.1% of total investments at amortized cost, or 1.7% of total investments at fair value, were on non-accrual status.
Unconsolidated Significant Subsidiary
Our investments are generally in small and mid-sized companies in a variety of industries. In accordance with Rules 3-09 and 4-08(g) of Regulation S-X (“Rule 3-09” and “Rule 4-08(g),” respectively), we must determine which of our unconsolidated controlled portfolio companies are considered “significant subsidiaries,” if any. In evaluating these investments, Rule 1-02(w)(2) of Regulation S-X stipulates two tests to be utilized by a business development corporation to determine if any of our controlled investments are considered significant subsidiaries for financial reporting purposes: the investment test and the income test. Rule 3-09 requires separate audited financial statements of an unconsolidated majority owned subsidiary in an annual report if any of the tests exceed the thresholds noted in Rule 1-02(w)(2) whereas Rule 4-08(g) only requires summarized financial information in an annual/quarterly report if the thresholds are exceeded.
Our investment in Merx Aviation Finance, LLC as of March 31, 2021 exceeded the threshold in at least one of the tests. Accordingly, we are attaching the audited financial statements of Merx Aviation Finance, LLC to Form 10-K.
Note 6. Derivative Instruments
In the normal course of business, the Company enters into derivative instruments which serve as components of the Company’s investment strategies and are utilized primarily to structure the portfolio to economically match the investment strategies of the Company. These instruments are subject to various risks, similar to non-derivative instruments, including market, credit and liquidity risks. The Investment Adviser manages these risks on an aggregate basis along with the risks associated with the Company’s investing activities as part of its overall risk management policy.
Purchased Put Options
Purchased put option contracts give the Company the right, but not the obligation, to sell within a limited time, a financial instrument, commodity or currency at a contracted price that may also be settled in cash, based on differentials between specified indices or prices. Purchasing put options tends to decrease exposure to the underlying instrument. The Company pays a premium, which is recorded as an asset and subsequently marked-to-market to reflect the current value of the option. Premiums paid for purchasing options which expire unexercised are treated as realized losses. Premiums paid for purchasing options which are exercised are added to the amounts paid for, or offset against the proceeds received on, the underlying security or reference investment. The risk associated with purchasing put options is limited to the premium paid.

176


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
Written Call Options
Written call options obligate the Company to buy within a limited time, a financial instrument, commodity or currency at a contracted price that may also be settled in cash, based on differentials between specified indices or prices. When the Company writes a call option, an amount equal to the premium received by the Company is treated as a liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the written call option. If an option which the Company has written either expires unexercised on its stipulated expiration date or the Company enters into a closing purchase transaction, the Company realizes a gain or loss (if the cost of a closing purchase transaction is less than or exceeds, respectively, the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security or derivative instrument, and the liability related to such option is extinguished. If a call option which the Company has written is exercised, the Company recognizes a realized gain or loss from the sale of the underlying security or derivative instrument and the proceeds from the sale are increased by the premium originally received. In writing a call option, the Company bears the market risk of an unfavorable change in the price, potentially unlimited in amount, of the derivative instrument or security underlying the written call option.
As of March 31, 2021, 2020, 2019 the Company did not hold any derivative contracts. The volume of the derivatives, based on the base notional value of option contracts, for the year ended March 31, 2019 was $153,150 for purchased call options, $13,750 for purchased put options, $(13,575) for written call options and $(146,969) for written put options.
The effect of transactions in derivative instruments to the Statements of Operations during the years ended March 31, 2021, 2020 and 2019 were as follows:
Year Ended March 31,
202120202019
Net Change in Unrealized Losses on Derivatives
Purchased Put Options$— $— $4,531 
Written Call Options— — 14,614 
Net Change in Unrealized Losses on Derivatives$— $— $19,145 
Year Ended March 31,
202120202019
Net Realized Losses on Derivatives
Purchased Put Options$— $— $(5,472)
Written Call Options— — (24,523)
Net Realized Losses on Derivatives$— $— $(29,995)
The Investment Adviser is exempt from registration with the U.S. Commodity Futures Trading Commission (“CFTC”) as a commodity pool operator (“CPO”) with respect to the Company. To the extent such exemption is no longer available and the Investment Adviser is required to register with the CFTC as a CPO, compliance with the CFTC’s disclosure, reporting and recordkeeping requirements may increase the Company’s expenses and may affect the ability of the Company to use commodity interests (including futures, option contracts, commodities, and swaps) to the extent or in the manner desired.
Note 7. Offsetting Assets and Liabilities
The Company entered into centrally cleared derivative contracts with Chicago Mercantile Exchange (“CME”). Upon entering into the centrally cleared derivative contracts, the Company is required to deposit with the relevant clearing organization cash or securities, which is referred to as the initial margin. Cash deposited as initial margin is reported as cash collateral on the Statements of Assets and Liabilities. Centrally cleared derivative contracts entered into with CME are considered settled-to-market contracts where daily variation margin posted is legally characterized as a settlement payment as opposed to collateral. The settlement payment does not terminate the derivative contract and the contract will continue to exist with no changes to its terms. Daily changes in fair value are recorded as a payable or receivable on the Statements of Assets and Liabilities as variation margin.


177


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
The Company has elected not to offset assets and liabilities in the Statements of Assets and Liabilities that may be received or paid as part of collateral arrangements, even when an enforceable master netting arrangement or other agreement is in place that provides the Company, in the event of counterparty default, the right to liquidate collateral and the right to offset a counterparty’s rights and obligations. As of March 31, 2021 and March 31, 2020, the Company did not hold any derivative contracts.
Note 8. Debt and Foreign Currency Transactions and Translations
On April 4, 2018, the Company’s Board of Directors, including a “required majority” (as defined in Section 57(o) of the Investment Company Act of 1940, as amended) of the Board, approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the Investment Company Act of 1940. As a result, effective on April 4, 2019, our asset coverage requirement applicable to senior securities was reduced from 200% to 150% (i.e., the revised regulatory leverage limitation permits BDCs to double the amount of borrowings, such that we would be able to borrow up to two dollars for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us).
The Company’s outstanding debt obligations as of March 31, 2021 were as follows:
Date Issued/AmendedTotal Aggregate Principal Amount CommittedPrincipal Amount OutstandingFair ValueFinal Maturity Date
Senior Secured Facility12/22/2020$1,810,000 **$1,119,186 *$1,139,765 (1)12/22/2025
2025 Notes3/3/2015350,000 350,000 357,763 (2)3/3/2025
Total Debt Obligations$2,160,000 $1,469,186 $1,497,528 
Deferred Financing Cost and Debt Discount$(3,815)
Total Debt Obligations, net of Deferred Financing Cost and Debt Discount$1,465,371 
____________________
* Includes foreign currency debt obligations as outlined in Foreign Currency Transactions and Translations within this note to the financial statements.
** Lender commitments will remain $1,810,000 through November 19, 2022 and will then decrease to $1,705,000 thereafter
(1)The fair value of these debt obligations would be categorized as Level 3 under ASC 820 as of March 31, 2021. The valuation is based on a yield analysis and discount rate commensurate with the market yields for similar types of debt.
(2)The fair value of these debt obligations would be categorized as Level 2 under ASC 820 as of March 31, 2021. The valuation is based on broker quoted prices.

178


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
The Company’s outstanding debt obligations as of March 31, 2020 were as follows:
 Date Issued/AmendedTotal Aggregate Principal Amount CommittedPrincipal Amount OutstandingFair ValueFinal Maturity Date
Senior Secured Facility11/19/2018$1,810,000 $1,449,402 *$1,386,914 (1)11/19/2023
2025 Notes3/3/2015350,000 350,000 262,500 (1)3/3/2025
Total Debt Obligations$2,160,000 $1,799,402 $1,649,414 
Deferred Financing Cost and Debt Discount$(4,785)
Total Debt Obligations, net of Deferred Financing Cost and Debt Discount$1,794,617 
____________________
*Includes foreign currency debt obligations as outlined in Foreign Currency Transactions and Translations within this note.
(1)The fair value of these debt obligations would be categorized as Level 3 under ASC 820 as of March 31, 2020. The valuation is based on a yield analysis and discount rate commensurate with the market yields for similar types of debt.
Senior Secured Facility
On December 22, 2020, the Company amended and restated its senior secured, multi-currency, revolving credit facility (the “Senior Secured Facility”), previously amended and restated as of November 19, 2018. Lender commitments in the amended and restated agreement will remain $1,810,000 through November 19, 2022 and will decrease to $1,705,000 thereafter. The amended and restated agreement extended the final maturity date through December 22, 2025, and includes an accordion provision which allows the Company to increase the total commitments under the existing revolving facility up to an aggregate principal amount of $2,715,000 from new or existing lenders on the same terms and conditions as the existing commitments. The Senior Secured Facility is secured by substantially all of the assets in the Company’s portfolio, including cash and cash equivalents. Commencing December 22, 2024, the Company is required to repay, in twelve consecutive monthly installments of equal size, the outstanding amount under the Senior Secured Facility as of December 22, 2024. In addition, the stated interest rate on the facility remains as a formula-based calculation based on a minimum borrowing base, resulting in a stated interest rate, depending on the type of borrowing, of (a) either LIBOR plus 1.75% per annum or LIBOR plus 2.00% per annum, or (b) either Alternate Base Rate plus 0.75% per annum or Alternate Base Rate plus 1% per annum. As of March 31, 2021, the stated interest rate on the facility was LIBOR plus 2.00%. The Company is required to pay a commitment fee of 0.375% per annum on any unused portion of the Senior Secured Facility and participation fees and fronting fees of up to 2.25% per annum on the letters of credit issued.

179


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
The Senior Secured Facility contains affirmative and restrictive covenants, events of default and other customary provisions for similar debt facilities, including: (a) periodic financial reporting requirements, (b) maintaining minimum stockholders’ equity of the greater of (i) 30% of the total assets of the Company and its consolidated subsidiaries as of the last day of any fiscal quarter and (ii) the sum of (A) $705,000 plus (B) 25% of the net proceeds from the sale of equity interests in the Company after the closing date of the Senior Secured Facility, (c) maintaining a ratio of total assets, less total liabilities (other than indebtedness) to total indebtedness, in each case of the Company and its consolidated subsidiaries, of not less than 1.5:1.0, (d) limitations on the incurrence of additional indebtedness, including a requirement to meet a certain minimum liquidity threshold before the Company can incur such additional debt, (e) limitations on liens, (f) limitations on investments (other than in the ordinary course of the Company’s business), (g) limitations on mergers and disposition of assets (other than in the normal course of the Company’s business activities), (h) limitations on the creation or existence of agreements that permit liens on properties of the Company’s consolidated subsidiaries and (i) limitations on the repurchase or redemption of certain unsecured debt and debt securities. In addition to the asset coverage ratio described in clause (c) of the preceding sentence, borrowings under the Senior Secured Facility (and the incurrence of certain other permitted debt) are subject to compliance with a borrowing base that applies different advance rates to different types of assets in the Company’s portfolio. The advance rate applicable to any specific type of asset in the Company’s portfolio will also depend on the relevant asset coverage ratio as of the date of determination. Borrowings under the Senior Secured Facility will also continue to be subject to the leverage restrictions contained in the Investment Company Act of 1940, as amended.
The Senior Secured Facility also provides for the issuance of letters of credit up to an aggregate amount of $150,000. As of March 31, 2021 and March 31, 2020, the Company had $177 and $6,227, respectively, in standby letters of credit issued through the Senior Secured Facility. The amount available for borrowing under the Senior Secured Facility is reduced by any standby letters of credit issued through the Senior Secured Facility. Under GAAP, these letters of credit are considered commitments because no funding has been made and as such are not considered a liability. These letters of credit are not senior securities because they are not in the form of a typical financial guarantee and the portfolio companies are obligated to refund any drawn amounts. The available remaining capacity under the Senior Secured Facility was $690,637 and $354,371 as of March 31, 2021 and March 31, 2020, respectively. Terms used in this disclosure have the meanings set forth in the Senior Secured Facility agreement.
Senior Secured Notes — Series A and Series B
On September 29, 2011, the Company closed a private offering of $45,000 aggregate principal amount of senior secured notes consisting of two series: $29,000 aggregate principal amount of 5.875% Senior Secured Notes, Series A, due September 29, 2016 (the “Series A Notes”); and $16,000 aggregate principal amount of 6.250% Senior Secured Notes, Series B, due September 29, 2018 (the “Series B Notes,” and together with the Series A Notes, the “Series A and B Notes”). The Series A and B Notes were issued in a private placement only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. Interest on the Series A and B Notes is due semi-annually on March 29 and September 29, commencing on March 29, 2012.
On September 29, 2016, the Series A Notes, which had an outstanding principal balance of $29,000, matured and were repaid in full. The Series B Notes, which had an outstanding principal balance of $16,000, matured and were repaid on October 1, 2018.

Senior Unsecured Notes
2025 Notes
On March 3, 2015, the Company issued $350,000 aggregate principal amount of senior unsecured notes for net proceeds of $343,650 (the “2025 Notes”). The 2025 Notes will mature on March 3, 2025. Interest on the 2025 Notes is due semi-annually on March 3 and September 3, at an annual rate of 5.25%, commencing on September 3, 2015. The 2025 Notes are general, unsecured obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness.

180


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
2043 Notes
On June 17, 2013, the Company issued $135,000 aggregate principal amount of senior unsecured notes and on June 24, 2013, an additional $15,000 in aggregate principal amount of such notes was issued pursuant to the underwriters’ over-allotment option exercise. In total, $150,000 of aggregate principal was issued for net proceeds of $145,275 (the “2043 Notes”). The 2043 Notes will mature on July 15, 2043. Interest on the 2043 Notes is paid quarterly on January 15, April 15, July 15 and October 15, at an annual rate of 6.875%, commencing on October 15, 2013. The Company may redeem the 2043 Notes in whole or in part at any time or from time to time on or after July 15, 2018. The 2043 Notes are general, unsecured obligations and rank equal in right of payment with all of our existing and future senior, unsecured indebtedness. The 2043 Notes were listed on the New York Stock Exchange under the ticker symbol “AIY.”
On August 12, 2019, the Company redeemed the entire $150,000 aggregate principal amount outstanding of the 2043 Notes in accordance with the terms of the indenture governing the 2043 Notes, before its stated maturity date, which resulted in a realized loss on the extinguishment of debt of $4,375.
The following table summarizes the average and maximum debt outstanding, and the interest and debt issuance cost for the years ended March 31, 2021, 2020 and 2019:
Year Ended March 31,
202120202019
Average debt outstanding$1,632,308 $1,529,524 $993,158 
Maximum amount of debt outstanding1,818,920 1,878,950 1,274,562 
Weighted average annualized interest cost (1)3.04%4.42%5.31%
Annualized amortized debt issuance cost0.35%0.37%0.55%
Total annualized interest cost3.39%4.79%5.86%
____________________
(1)Includes the stated interest expense and commitment fees on the unused portion of the Senior Secured Facility. Commitment fees for the years ended March 31, 2021, 2020 and 2019 were $1,983, $2,150 and $3,142, respectively.
Foreign Currency Transactions and Translations
The Company had the following foreign-denominated debt outstanding on the Senior Secured Facility as of March 31, 2021:
Original Principal Amount (Local)Original Principal Amount (USD)Principal Amount OutstandingUnrealized Gain/(Loss) Reset Date
Euro15,900 17,392 18,687 (1,295)4/30/2021
British Pound£77,000 95,593 106,237 (10,644)4/30/2021
Australian DollarA$6,300 4,617 4,799 (182)4/30/2021
$117,602 $129,723 $(12,121)
181


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
The Company had the following foreign-denominated debt outstanding on the Senior Secured Facility as of March 31, 2020:
Original Principal Amount (Local)Original Principal Amount (USD)Principal Amount OutstandingUnrealized Gain/(Loss) Reset Date
Canadian DollarC$2,300 $1,894 $1,616 $278 4/30/2020
Euro36,400 39,960 39,940 20 4/30/2020
British Pound£3,500 4,456 4,340 116 4/14/2020
British Pound£9,000 11,631 11,159 472 4/24/2020
British Pound£1,500 1,943 1,860 83 4/27/2020
British Pound£87,000 107,751 107,876 (125)4/30/2020
British Pound£3,000 $3,523 $3,720 $(197)4/20/2020
Australian DollarA$1,000 701 612 89 4/14/2020
Australian DollarA$6,000 $4,406 $3,672 $734 4/30/2020
$176,265 $174,795 $1,470 
As of March 31, 2021 and March 31, 2020, the Company was in compliance with all debt covenants for all outstanding debt obligations.
Note 9. Stockholders’ Equity
There were no equity offerings of common stock during the years ended March 31, 2021 and March 31, 2020.
The Company adopted the following plans, approved by the Board of Directors, for the purpose of repurchasing its common stock in accordance with applicable rules specified in the Securities Exchange Act of 1934 (the “1934 Act”) (the “Repurchase Plans”):
Date of Agreement/AmendmentMaximum Cost of Shares That May Be RepurchasedCost of Shares RepurchasedRemaining Cost of Shares That May Be Repurchased
August 6, 2015$50,000 $50,000 $— 
December 14, 2015
50,000 50,000 — 
September 14, 201650,000 50,000 — 
October 30, 201850,000 50,000 — 
February 6, 201950,000 23,071 26,929 
Total as of March 31, 2021$250,000 $223,071 $26,929 
The Repurchase Plans were designed to allow the Company to repurchase its shares both during its open window periods and at times when it otherwise might be prevented from doing so under applicable insider trading laws or because of self-imposed trading blackout periods. A broker selected by the Company will have the authority under the terms and limitations specified in an agreement with the Company to repurchase shares on the Company’s behalf in accordance with the terms of the Repurchase Plans. Repurchases are subject to SEC regulations as well as certain price, market volume and timing constraints specified in the Repurchase Plans. Pursuant to the Repurchase Plans, the Company may from time to time repurchase a portion of its shares of common stock and the Company is hereby notifying stockholders of its intention as required by applicable securities laws.
182


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
Under the Repurchase Plans described above, the Company allocated the following amounts to be repurchased in accordance with SEC Rule 10b5-1 (the “10b5-1 Repurchase Plans”):
Effective DateTermination DateAmount Allocated to 10b5-1 Repurchase Plans
September 15, 2015November 5, 2015$5,000 
January 1, 2016
February 5, 201610,000 
April 1, 2016May 19, 20165,000 
July 1, 2016August 5, 201615,000 
September 30, 2016November 8, 201620,000 
January 4, 2017February 6, 201710,000 
March 31, 2017May 19, 201710,000 
June 30, 2017August 7, 201710,000 
October 2, 2017November 6, 201710,000 
January 3, 2018February 8, 201810,000 
June 18, 2018August 9, 201810,000 
September 17, 2018October 31, 201810,000 
December 12, 2018February 7, 201910,000 
February 25, 2019May 17, 201925,000 
March 18, 2019May 17, 201910,000 
June 4, 2019August 7, 201925,000 
June 17, 2019August 7, 201920,000 
September 16, 2019November 6, 201920,000 
December 6, 2019February 5, 202025,000 
December 16, 2019February 5, 202015,000 
March 12, 2020March 19, 202020,000 
March 30, 2021May 21, 202110,000 
During the year ended March 31, 2021, the Company did not repurchase shares.
During the year ended March 31, 2020, the Company repurchased 3,617,810 shares at a weighted average price per share of $14.41, inclusive of commissions, for a total cost of $52,141. This represents a discount of approximately 20.57% of the average net asset value per share for the year ended March 31, 2020.
Since the inception of the Repurchase Plans through March 31, 2021, the Company repurchased 13,654,578 shares at a weighted average price per share of $16.34, inclusive of commissions, for a total cost of $223,072. Including fractional shares, the Company has repurchased 13,654,608 shares at a weighted average price per share of $16.34, inclusive of commissions for a total cost of $223,072.
On October 30, 2018, the Company’s Board of Directors approved a one-for-three reverse stock split of the Company’s common stock which was effective as of the close of business on November 30, 2018. The Company's common stock began trading on a split-adjusted basis on December 3, 2018. The fractional shares that resulted from the Reverse Stock Split were approximately 29 shares and they were canceled by paying cash in lieu of the fair value.
On July 22, 2019 the Board of Directors approved Articles of Amendment which amended the Company’s charter to reduce the amount of authorized capital stock from 400,000,000 shares, par value $0.001 per share, to 130,000,000 shares, par value $0.001 per share. The Articles of Amendment were accepted for record by the Department of Assessments and Taxation of the State of Maryland on July 22, 2019 and immediately became effective.

183


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
Note 10. Commitments and Contingencies
The Company has various commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to issue letters of credit through a financial intermediary on behalf of certain portfolio companies. As of March 31, 2021 and March 31, 2020, the Company had the following unfunded commitments to its portfolio companies:
March 31, 2021March 31, 2020
Unfunded revolver obligations and bridge loan commitments (1)$261,854 $269,716 
Standby letters of credit issued and outstanding (2)
2,787 9,014 
Unfunded delayed draw loan commitments (including commitments with performance thresholds not met)(3)172,249 230,778 
Total Unfunded Commitments(4)$436,890 $509,508 
____________________
(1)The unfunded revolver obligations may or may not be funded to the borrowing party in the future. The amounts relate to loans with various maturity dates, but the entire amount was eligible for funding to the borrowers as of March 31, 2021 and March 31, 2020, subject to the terms of each loan’s respective credit agreements which includes borrowing covenants that need to be met prior to funding. As of March 31, 2021 and March 31, 2020, the bridge loan commitments included in the balances were $0 and $15,050, respectively.
(2)For all these letters of credit issued and outstanding, the Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. None of the letters of credit issued and outstanding are recorded as a liability on the Company’s Statements of Assets and Liabilities as such letters of credit are considered in the valuation of the investments in the portfolio company.
(3)The Company’s commitment to fund delayed draw loans is triggered upon the satisfaction of certain pre-negotiated terms and conditions which can include covenants to maintain specified leverage levels and other related borrowing base covenants. For commitments to fund delayed draw loans with performance thresholds, borrowers are required to meet certain performance requirements before the Company is obligated to fulfill these commitments.
(4)The Company also had an unfunded revolver commitment to its fully controlled affiliate Merx Aviation Finance, LLC of $109,500 and $194,700 for the years ended of March 31, 2021 and 2020, respectively. Given the Company’s controlling interest, the timing and the amount of the funding has not been determined.
As further discussed in Note 2, the full extent of the impact of COVID-19 on the global economy generally, and the Company’s business in particular is uncertain. As of March 31, 2021, no contingencies have been recorded on the Company’s Statement of Assets and Liabilities as a result of COVID-19, however as the global pandemic continues and the economic implications worsen, it may have long-term impacts on the Company’s financial condition, results of operations, and cash flows. Refer to Note 2 for further discussion of COVID-19.
184


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
Note 11. Income Taxes
For income tax purposes, distributions made to stockholders are reported as ordinary income, capital gains, non-taxable return of capital, or a combination thereof. The final determination of the tax character of distributions will not be made until we file our tax return for each tax year and the tax characteristics of all distributions will be reported to stockholders on Form 1099 after the end of each calendar year. The tax character of distributions paid to stockholders during the tax years ended March 31, 2021, 2020 and 2019 were as follows:
Year Ended March 31,
202120202019
Ordinary income$99,847 $120,107 $112,042 
Capital gains— — — 
Return of capital— — 14,533 
Total distributions paid to stockholders$99,847 $120,107 $126,575 
Taxable income generally differs from net increase in net assets resulting from operations for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized gains or losses, as unrealized gains or losses are generally not included in taxable income until they are realized.
The following table reconciles the net increase in net assets resulting from operations to taxable income for the tax years ended March 31, 2021, 2020 and 2019:
Year Ended March 31,
202120202019
Net increase (decrease) in net assets resulting from operations$111,861 $(116,064)$71,946 
Adjustments:
Net realized losses (gains)21,506 6,318 50,033 
Net change in unrealized losses (gains)(23,341)255,020 5,770 
Income not currently taxable— — — 
Income (loss) recognized for tax but not book7,673 (11,895)(22,478)
Expenses not currently deductible— — 16,477 
Expenses incurred for tax but not book— — — 
Realized gain/loss differences (1)(7,933)41,533 (8,301)
Taxable income before deductions for distributions$109,766 $174,912 $113,447 
____________________
(1)These pertain to book income/losses treated as capital gains/losses for tax purposes or book realized gains/losses treated as ordinary income/losses for tax purposes.
The following table shows the components of accumulated losses on a tax basis for the years ended March 31, 2021, 2020 and 2019:
Year Ended March 31,
202120202019
Undistributed ordinary income$61,268 $53,132 $— 
Capital loss carryforward(752,317)(739,365)(737,529)
Other temporary book-to-tax differences(34,615)(35,225)(47,517)
Unrealized appreciation (depreciation)(337,930)(354,168)(58,232)
Total accumulated under-distributed (over-distributed) earnings$(1,063,594)$(1,075,626)$(843,278)
185


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
On December 22, 2010, the Regulated Investment Company Modernization Act (the “Act”) was enacted which changed various technical rules governing the tax treatment of RICs. The changes are generally effective for taxable years beginning after the date of enactment. Under the Act, the Company will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term losses rather than being considered all short-term as under previous law.
As of March 31, 2021, the Company had a post-enactment short-term capital loss carryforward of $240,497 and long-term capital loss carryforward of $511,821. As of March 31, 2020, the Company had a post-enactment short-term capital loss carryforward of $245,100 and long-term capital loss carryforward of $494,265. As of March 31, 2019, the Company had a post-enactment short-term capital loss carryforward of $245,271 and long-term capital loss carryforward of $492,257.
As of March 31, 2021, the Company had no pre-enactment net capital loss carryforward. None of the pre-enactment net capital loss carryforwards were utilized in the past three years and none of the pre-enactment net capital loss carryforwards expired on March 31, 2021.
For tax purposes, the Company may elect to defer any portion of a post-October capital loss or late-year ordinary loss to the first day of the following fiscal year.
As of March 31, 2021, the Company deferred no late-year ordinary losses which are deemed to arise on April 1, 2021. As of March 31, 2020, the Company deferred no late-year ordinary losses which are deemed to arise on April 1, 2020. As of March 31, 2019, the Company deferred late-year ordinary losses of 16,477 which is deemed to arise on April 1, 2019
As of March 31, 2021, the Company deferred post-October capital loss of $11,121 deemed on arise on April 1, 2021. As of March 31, 2020, the Company deferred post-October capital loss of $5,858 deemed to arise on April 1, 2020. As of March 31, 2019, the Company had no net post-October capital loss deferral deemed to arise on April 1, 2019.
Management has analyzed the Company’s tax positions taken, or to be taken, on federal income tax returns for all open tax years, and has concluded that no provision for income tax is required in the Company’s financial statements. The Company’s federal tax returns are subject to examination by the Internal Revenue Service for a period of three fiscal years after they are filed.
In general, we may make certain reclassifications to the components of net assets as a result of permanent book-to-tax differences and book-to-tax differences relating to stockholder distributions. Accordingly, as of March 31, 2021, we adjusted accumulated net realized loss by ($7,179) to $755,606 and overdistributed net investment income by ($7,161) to ($24,226). Total earnings and net asset value were not affected. As of March 31, 2020, we adjusted accumulated net realized loss by $1,088 to $745,645 and overdistributed net investment income by ($5,631) to $27,244. Total earnings and net asset value were not affected.
186


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
Note 12. Financial Highlights
The following is a schedule of financial highlights for each of the five years ended March 31, 2021.
Year Ended March 31,
20212020201920182017
Per Share Data*
Net asset value at beginning of period$15.70 $19.06 $19.67 $20.22 $21.84 
Net investment income (1)1.69 2.16 1.81 1.83 2.01 
Net realized and change in unrealized gains (losses) (1)0.03 (3.89)(0.79)(0.64)(1.77)
Net increase (decrease) in net assets resulting from operations1.71 (1.73)1.02 1.19 0.25 
Distribution of net investment income (2)(1.53)(1.80)(1.59)(1.19)(1.05)
Distribution of return of capital (2)— — (0.21)(0.60)(0.90)
Accretion due to share repurchases— 0.20 0.17 0.03 0.12 
Net asset value at end of period$15.88 $15.70 $19.06 $19.67 $20.22 
Per share market value at end of period$13.72 $6.75 $15.14 $15.66 $19.68 
Total return (3)135.08 %(48.62)%8.31 %(12.06)%31.44 %
Shares outstanding at end of period65,259,176 65,259,176 68,876,986 72,104,032 73,231,551 
Weighted average shares outstanding65,259,176 67,228,771 70,645,944 72,874,613 74,138,358 
Ratio/Supplemental Data
Net assets at end of period (in millions)$1,036.3 $1,024.3 $1,312.6 $1,418.1 $1,481.8 
Ratio of operating expenses to average net assets (4)5.05 %4.79 %5.09 %5.02 %4.59 %
Ratio of interest and other debt expenses to average net assets5.44 %6.01 %4.26 %3.61 %3.86 %
Ratio of total expenses to average net assets (4)10.49 %10.80 %9.35 %8.63 %8.45 %
Ratio of net investment income to average net assets10.82 %11.91 %9.38 %9.15 %9.66 %
Average debt outstanding (in millions)$1,632.3 $1,529.5 $993.2 $899.3 $1,048.7 
Average debt per share$25.01 $22.75 $14.06 $12.33 $14.13 
Portfolio turnover rate23.79 %46.58 %46.26 %45.06 %23.25 %
Asset coverage per unit (5)$1,705 $1,567 $2,153 $2,770 $2,709 
____________________
*Totals may not foot due to rounding.
(1)Financial highlights are based on the weighted average number of shares outstanding for the period presented.
(2)The tax character of distributions are determined based on taxable income calculated in accordance with income tax regulations which may differ from amounts determined under GAAP. Although the tax character of distributions paid to stockholders through March 31, 2021 may include return of capital, the exact amount cannot be determined at this point. Per share amounts are based on actual rate per share.
(3)Total return is based on the change in market price per share during the respective periods. Total return also takes into account distributions, if any, reinvested in accordance with the Company’s dividend reinvestment plan.
187


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
(4)The ratio of operating expenses to average net assets and the ratio of total expenses to average net assets are shown inclusive of all voluntary management and incentive fee waivers (See Note 3 to the financial statements). For the years ended March 31, 2021, the ratio of operating expenses to average net assets and the ratio of total expenses to average net assets would be 5.08% and 10.53%, respectively, without the voluntary fee waivers. For the year ended March 31, 2020, the ratio of operating expenses to average net assets and the ratio of total expenses to average net assets would be 4.81% and 10.83%, respectively, without the voluntary fee waivers. For the year ended March 31, 2019, the ratio of operating expenses to average net assets and the ratio of total expenses to average net assets would be 5.51% and 9.79%, respectively, without the voluntary fee waivers. For the year ended March 31, 2018, the ratio of operating expenses to average net assets and the ratio of total expenses to average net assets would be 6.39% and 10.03%, respectively, without the voluntary fee waivers. For the year ended March 31, 2017, the ratio of operating expenses to average net assets and the ratio of total expenses to average net assets would be 5.98% and 9.85%, respectively, without the voluntary fee waivers.
(5)The asset coverage ratio for a class of senior securities representing indebtedness is calculated as our total assets, less all liabilities and indebtedness not represented by senior securities, divided by senior securities representing indebtedness. This asset coverage ratio is multiplied by one thousand to determine the asset coverage per unit.
Note 13. Selected Quarterly Financial Data (Unaudited)
The following table sets forth selected financial data for each quarter within the three years ended March 31, 2021:
Investment IncomeNet Investment IncomeNet Realized And Change in Unrealized Gains (Losses)Net Increase (Decrease) in Net 
Assets from Operations — Basic
Quarter EndedTotal
Per Share*
Total
Per Share*
Total
Per Share*
Total
Per Share*
March 31, 2021$50,825 $0.78 $25,635 $0.39 $16,777 $0.26 $42,411 $0.65 
December 31, 202054,364 0.83 28,257 0.43 4,909 0.08 33,166 0.51 
September 30, 202054,891 0.84 27,906 0.43 5,383 0.08 33,289 0.51 
June 30, 202056,669 0.87 28,229 0.43 (25,234)(0.39)2,995 0.05 
March 31, 202071,600 1.08 38,786 0.59 (186,033)(2.81)(147,247)(2.22)
December 31, 201968,482 1.03 36,220 0.54 (35,934)(0.54)286 0.00
September 30, 201970,318 1.04 35,734 0.53 (28,666)(0.43)7,068 0.10 
June 30, 201966,516 0.97 34,534 0.50 (10,705)(0.16)23,829 0.35 
March 31, 201961,410 0.89 32,552 0.47 (708)(0.01)31,844 0.46 
December 31, 201864,041 0.91 31,487 0.45 (32,655)(0.47)(1,178)(0.02)
September 30, 201866,034 0.93 32,163 0.45 (4,134)(0.06)28,029 0.39 
June 30, 201863,591 0.88 31,548 0.44 (18,298)(0.25)13,250 0.18 
____________________
*Totals may not foot due to rounding.
188


APOLLO INVESTMENT CORPORATION
NOTES TO FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
Note 14. Subsequent Events
Management has evaluated subsequent events through the date of issuance of these financial statements and has determined that there are no subsequent events outside the ordinary scope of business that require adjustment to, or disclosure in, the financial statements other than those disclosed below.
The Company believes the estimates and assumptions underlying our financial statements are reasonable and supportable based on the information available as of March 31, 2021. However uncertainty over the ultimate impact COVID-19 will have on the global economy generally, and the Company’s business in particular, makes any estimates and assumptions as of March 31, 2021 inherently less certain than they would be absent the current and potential impacts of COVID-19. Actual results may ultimately differ from those estimates. To the extent the Company's portfolio companies are adversely impacted by the effects of the COVID-19 pandemic, it may have a material adverse impact on the Company's future net investment income, the fair value of its portfolio investments, its financial condition and the results of operations and financial condition of the Company's portfolio companies. See Note 2 for information regarding the potential impact of the COVID-19 pandemic.
On May 20, 2021 the Company’s Board of Directors, including a majority of the directors who are not “interested persons” of the Company as defined in the Investment Company Act of 1940, voted to approve the continuation of the Company’s investment advisory management agreement through May 20, 2022.

On May 20, 2021, the Board of Directors voted to immediately decrease the size of the Board from ten to eight, thereby eliminating two vacancies.
On May 20, 2021, the Company’s Board of Directors declared a distribution of $0.31 per share, payable on July 7, 2021 to stockholders of record as of June 17, 2021. On May 20, 2021, the Company’s Board also declared a supplemental distribution of $0.05 per share payable on July 7, 2021 to stockholders of record as of June 17, 2021. There can be no assurances that the Board will continue to declare a base distribution of $0.31 per share or a supplemental distribution.
189


Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of March 31, 2021 (the end of the period covered by this report), we, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the 1934 Act). Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.
Management’s Report on Internal Control Over Financial Reporting
Management’s Report on Internal Control Over Financial Reporting, which is contained in “Item 8. Financial Statements and Supplementary Data” of this report, is incorporated by reference herein.
Attestation Report of the Independent Registered Public Accounting Firm
Our independent registered public accounting firm, PricewaterhouseCoopers LLP, has issued an attestation report on the Company’s internal control over financial reporting, which is contained in “Item 8. Financial Statements and Supplementary Data” of this report.
Changes in Internal Control Over Financial Reporting
Management has not identified any change in the Company’s internal control over financial reporting that occurred during the fourth fiscal quarter of 2021 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9B. Other Information
None.
190


PART III
Item 10. Directors, Executive Officers and Corporate Governance
Information required by this item will be contained in the Company’s definitive Proxy Statement for its 2021 Annual Stockholder Meeting, to be filed with the SEC within 120 days after March 31, 2021, and is incorporated herein by reference.
Item 11. Executive Compensation
Information required by this item will be contained in the Company’s definitive Proxy Statement for its 2021 Annual Stockholder Meeting, to be filed with the SEC within 120 days after March 31, 2021, and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information required by this item will be contained in the Company’s definitive Proxy Statement for its 2021 Annual Stockholder Meeting, to be filed with the SEC within 120 days after March 31, 2021, and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information required by this item will be contained in the Company’s definitive Proxy Statement for its 2021 Annual Stockholder Meeting, to be filed with the SEC within 120 days after March 31, 2021, and is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services
Information required by this item will be contained in the Company’s definitive Proxy Statement for its 2021 Annual Stockholder Meeting, to be filed with the SEC within 120 days after March 31, 2021, and is incorporated herein by reference.
191


PART IV
Item 15. Exhibits and Financial Statement Schedules
(a)The following documents are filed as part of this report:
i.Financial Statements – See the Index to Financial Statements in Item 8 of this report.
ii.Financial Statement Schedules – None.
iii.Exhibits – The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC (according to the number assigned to them in Item 601 of Regulation S-K):
3.1(a)
3.1(b)
3.1(c)
3.1(d)
3.2
4.1
4.2In accordance with Item 601(b)(4)(iii)(A) of Regulation S-K, certain instruments respecting long-term debt of the Registrant have been omitted but will be furnished to the SEC upon request.
4.3
4.4
4.5
4.6
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.10
11.1
12.1
14.1
21.1
31.1
31.2
32.1
99.1
99.2
99.3
_________________________
192



*Filed herewith.
(1)Incorporated by reference from the Registrant’s pre-effective Amendment No. 1 to the Registration Statement under the Securities Act of 1933, as amended, on Form N-2, filed on June 20, 2005.
(2)Incorporated by reference from the Registrant’s pre-effective Amendment No. 3 to the Registration Statement under the Securities Act of 1933, as amended, on Form N-2, filed on April 1, 2004.
(3)Incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-K, filed on May 18, 2018.
(4)Incorporated by reference from the Registrant’s pre-effective Amendment No. 1 to the Registration Statement under the Securities Act of 1933, as amended, on Form N-2, filed on March 12, 2004.
(5)Incorporated by reference from the Registrant’s Registration Statement under the Securities Act of 1933, as amended, on Form N-2, filed on October 7, 2008.
(6)Incorporated by reference from the Registrant’s Form 10-K, filed on May 23, 2012.
(7)Incorporated by reference to Exhibit 4.1 as applicable, to the Registrant’s Form 8-K, filed on March 3, 2015.
(8)Incorporated by reference from the Registrant’s post-effective amendments No.1 to the Registration Statement under the Securities Act of 1933, as amended, on form N-2, filed on August 14, 2006.
(9)Incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K, filed on May 18, 2018.
(10)Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, filed on August 10, 2018.
(11)Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, filed on December 22, 2020.
(12)Incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K, filed on December 3, 2018.
(13)Incorporated by reference to Exhibit 10.2 to the Registrant’s Form 10-Q, filed on February 6, 2019.
(14)Incorporated by reference to Exhibit 3.1 to Registrant’s Form 8-K, filed on July 22, 2019.
(15)Incorporated by reference to Exhibit 4.6 to Registrant’s From 10k, Filed May 21, 2020

193


SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on May 20, 2021.
APOLLO INVESTMENT CORPORATION
By:
/s/ HOWARD WIDRA
Howard Widra
Chief Executive Officer
194


Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
/s/ HOWARD WIDRA/s/ GREGORY W. HUNT
Howard WidraGregory W. Hunt
Chief Executive OfficerChief Financial Officer and Treasurer
(Principal Executive Officer)(Principal Financial Officer)
May 20, 2021May 20, 2021
/s/ AMIT JOSHI/s/ JOHN J. HANNAN
Amit JoshiJohn J. Hannan
Chief Accounting Officer and Assistant TreasurerChairman of the Board of Directors, Director
(Principal Accounting Officer)May 20, 2021
May 20, 2021
/s/ R. RUDOLPH REINFRANK/s/ BARBARA MATAS
R. Rudolph ReinfrankBarbara Matas
DirectorDirector
May 20, 2021May 20, 2021
/s/ BRADLEY J. WECHSLER/s/ JEANETTE W. LOEB
Bradley J. WechslerJeanette W. Loeb
DirectorDirector
May 20, 2021May 20, 2021
/s/ ELLIOT STEIN, JR./s/ FRANK C. PULEO
Elliot Stein, Jr.Frank C. Puleo
DirectorDirector
May 20, 2021May 20, 2021
195