Apollo Global Management, Inc. — Form 8-K Summary
Reporting date: August 23, 2023. The filing reports a material debt issuance and planned redemption of Apollo Asset Management, Inc. preferred stock.
Business Context and Transaction
Apollo Global Management, Inc. issued $600.0 million aggregate principal amount of 7.625% Fixed-Rate Resettable Junior Subordinated Notes due 2053 in an underwritten public offering. The notes were issued under an August 23, 2023 indenture and are guaranteed by the guarantors named in that indenture.
Key Financial Terms and Liquidity Impact
- Principal amount: $600.0 million.
- Initial interest rate: 7.625% annually through December 15, 2028.
- Reset rate: Beginning on the first call date, the rate resets for each reset period to the applicable Five-Year U.S. Treasury Rate plus 3.226%.
- Interest payments: Payable quarterly in arrears beginning December 15, 2023, subject to the company’s right to defer interest payments.
- Maturity: 2053.
- Use of proceeds: Together with cash on hand, proceeds are intended to redeem all outstanding AAM Series A and Series B preferred stock, with aggregate liquidation value of $575.0 million, and to pay related fees and expenses.
The filing does not provide revenue, profit, cash-flow, margin, total debt, or cash-balance figures for the reporting period.
Material Changes Versus the Prior Comparable Period
The filing does not present comparative operating or financial results. The principal changes disclosed are the creation of $600.0 million of junior subordinated debt and the planned redemption of AAM preferred stock.
Outlook, Risks, and Unusual Items
- Apollo Asset Management, Inc. issued redemption notices on August 23, 2023 for all outstanding 6.375% Series A and Series B preferred stock.
- The preferred stock is scheduled to be redeemed on September 22, 2023 at $25.00 per share plus declared and unpaid dividends through, but excluding, the redemption date.
- The notes carry a relatively high fixed coupon and will become floating/reset-rate obligations after December 15, 2028, exposing the company to future interest-rate changes.
- The notes are junior subordinated obligations, and the company may defer interest payments subject to the indenture terms.
- The filing states that it is not itself a notice of redemption with respect to the AAM preferred stock.
Investor Verification Checklist
- Review the indenture for call rights, interest-deferral provisions, subordination, guarantees, covenants, and reset mechanics.
- Confirm the final net proceeds, offering expenses, and the amount of cash used for the preferred-stock redemption.
- Verify completion of the September 22, 2023 redemption and the aggregate dividends paid with the redemption price.
- Assess the effect of the transaction on Apollo’s consolidated debt, interest expense, liquidity, and capital structure.
- Review subsequent filings for any changes to the notes, preferred-stock redemption, or interest-payment status.