SEC Filing Summary: Apollo Investment Corporation
Business Context and Reporting Period
This Form 8-K was filed on November 20, 2018, by Apollo Investment Corporation (not Midcap Financial Investment Corp as indicated in metadata). The report details the amendment and restatement of the Company's senior secured, multi-currency, revolving credit facility executed on November 19, 2018.
Key Financial Metrics and Facility Terms
- Facility Size: Current lender commitments of $1,590,000,000 with an option to expand up to $2,385,000,000.
- Maturity Date: November 19, 2023.
- Pricing Structure:
- Eurocurrency borrowings: 175 or 200 basis points over Adjusted LIBO Rate.
- Alternate Base Rate borrowings: 75 or 100 basis points over Alternate Base Rate.
- Financial Covenants:
- Minimum shareholders' equity requirement.
- Asset coverage ratio (Total Assets less Total Liabilities to Total Indebtedness): Not less than 1.5:1.0.
- Secured asset coverage ratio (Certain Total Assets less Total Liabilities to Total Secured Indebtedness): Not less than 2.0:1.0.
The filing text does not provide specific values for revenue, profit, cash flow, or current liquidity positions outside of the facility terms.
Material Changes
The primary material change is the restructuring of the Company's credit facility. The agreement introduces specific leverage restrictions and a Borrowing Base mechanism that applies different advance rates to portfolio assets based on asset coverage ratios. The facility also includes standard limitations on additional indebtedness, liens, investments, asset transfers, and restricted payments.
Outlook, Risks, and Contingencies
Borrowings remain subject to compliance with the Investment Company Act of 1940 leverage restrictions. The agreement includes customary events of default. Management commentary is limited to the execution of the agreement and the issuance of a press release on November 20, 2018, which is incorporated by reference but not detailed in this text.
Investor Verification Checklist
- Verify the full text of the Amended and Restated Credit Agreement (Exhibit 10.1) for specific definitions of the Borrowing Base and advance rates.
- Review the press release (Exhibit 99.1) for management's strategic rationale regarding the facility expansion.
- Confirm the Company's current compliance with the 1.5:1.0 and 2.0:1.0 asset coverage ratios in subsequent quarterly filings.
- Monitor the utilization of the facility against the $1.59 billion commitment and the potential drawdown of the additional $795 million capacity.