Investor Presentation - APOLLO INVESTMENT CORPORATION
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APOLLO INVESTMENT CORPORATION Investor Presentation May 2021 Unless otherwise noted, information as of March 31, 2021 It should not be assumed that investments made in the future will be profitable or will equal the performance of the investments shown in this document.
Disclaimers, Definitions, and Important Notes
Forward-Looking Statements
We make forward-looking statements in this presentation and other filings we make with the SEC within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and
are generally beyond our control. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of
operations, plans and objectives, including information about our ability to generate attractive returns while attempting to mitigate risk. Words such as “believe,” “expect,” “anticipate,”
“estimate,” “plan,” “continue,” “intend,” “should,” “may” or similar expressions, are intended to identify forward-looking statements. Statements regarding the following subjects, among
others, may be forward-looking: the return on equity; the yield on investments; the ability to borrow to finance assets; and other risks associated with investing including changes in
business conditions and the general economy. Statements regarding the following subjects, among others, maybe forward looking: the macro- and micro-economic impact of the COVID-
19 pandemic; the severity and duration of the COVID-19 pandemic; actions taken by governmental authorities to contain the COVID-19 pandemic or treat its impact; the impact of the
COVID-19 pandemic on our financial condition, results of operations, liquidity and capital resources. For additional information about the COVID-19 pandemic and its potential impact
on the Company’s results of operations and financial condition, please refer to the COVID-19 Developments section and additional disclosure in our Form 10-K for the period ended
March 31, 2021.
The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-
looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to
us. Some of these factors are described in the company’s filings with the SEC. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially
from those expressed in our forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it
is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise. This presentation may contain statistics and other data that in some cases has been obtained from or
compiled from information made available by third-party service providers.
Past Performance
Past performance is not indicative nor a guarantee of future returns, the realization of which is dependent on many factors, many of which are beyond the control of Apollo Global
Management, Inc. (“AGM”); Apollo Investment Management, L.P. (the “Investment Adviser”); and the Company (collectively “Apollo”). There can be no assurances that future dividends
will match or exceed historic ones, or that they will be made at all. Net returns give effect to all fees and expenses. Unless otherwise noted, information included herein is presented as of
the date indicated on the cover page and may change at any time without notice. The Company is subject to certain significant risks relating to our business and investment objective. For
more detailed information on risks relating to the Company, see the latest Form 10-K and subsequent quarterly reports filed on Form 10-Q.
Financial Data
Financial data used in this presentation for the periods shown is from the Company’s Form 10-K and Form 10-Q filings with the SEC during such periods. Unless otherwise indicated, the
numbers shown herein are rounded and unaudited. Quarterly and annual financial information for the Company refers to fiscal periods. All share and per share data shown herein is
adjusted for the one-for-three reverse stock split of the Company’s common stock which took effect at the close of business on November 30, 2018.
2Disclaimers, Definitions, and Important Notes
AUM Definition
Assets Under Management (“AUM”) refers to the investments AGM manages or with respect to which it has control, including capital it has the right to call from its investors pursuant to
their capital commitments to various funds. AGM’s AUM equals the sum of: (i) the fair value of its private equity investments plus the capital that it is entitled to call from its investors
pursuant to the terms of their capital commitments plus non-recallable capital to the extent a fund is within the commitment period in which management fees are calculated based on total
commitments to the fund; (ii) the net asset value of AGM’s capital markets funds, other than certain senior credit funds, which are structured as collateralized loan obligations or certain
collateralized loan obligation and collateralized debt obligation credit funds that have a fee generating basis other than mark-to-market asset values, plus used or available leverage and/or
capital commitments; (iii) the gross asset values or net asset values of AGM’s real estate entities and the structured portfolio vehicle investments included within the funds AGM manages,
which includes the leverage used by such structured portfolio vehicles; (iv) the incremental value associated with the reinsurance investments of the portfolio company assets that AGM
manages; and (v) the fair value of any other investments that AGM manages plus unused credit facilities, including capital commitments for investments that may require pre-qualification
before investment plus any other capital commitments available for investment that are not otherwise included in the clauses above. AGM’s AUM measure includes AUM for which it
charges either no or nominal fees. AGM’s definition of AUM is not based on any definition of AUM contained in its operating agreement or in any of its Apollo fund management
agreements. AGM considers multiple factors for determining what should be included in its definition of AUM. Such factors include but are not limited to (1) its ability to influence the
investment decisions for existing and available assets; (2) its ability to generate income from the underlying assets in its funds; and (3) the AUM measures that it uses internally or believes
are used by other investment managers. Given the differences in the investment strategies and structures among other alternative investment managers, AGM’s calculation of AUM may
differ from the calculations employed by other investment managers and, as a result, this measure may not be directly comparable to similar measures presented by other investment
managers.
3Agenda
• Overview of AINV & Apollo’s Direct Origination Platform
• Direct Lending Market Backdrop
• Investment Strategy & Portfolio
• Conclusion
• Appendices
4Overview of AINV &
Apollo’s Direct Origination Platform
5Overview of Apollo Investment Corporation (“AINV”)
Specialty Finance • Publicly traded (NASDAQ: AINV) business development company (“BDC”) treated for federal income tax purposes as a
Company Focused on regulated investment company (“RIC”)
Lending to US Middle • Primarily provides debt solutions to U.S. middle market companies with a focus on direct origination
Market Companies • Since IPO in April 2004 and through March 31, 2021, invested $21.9 billion in 552 portfolio companies
• $2.45 billion investment portfolio across 135 companies and 25 different industries, spanning a broad range of asset types1,2
• Externally managed by an affiliate3 of AGM, a leading alternative asset manager with approximately $461 billion of AUM2,4
Externally Managed by with expertise in private equity, credit and real assets
Apollo Global
• AGM was founded in 1990
Management (“AGM”)
• AINV operates as part of AGM’s Direct Origination Business
Apollo Affiliation • Experienced management team
Provides Significant • Broad product offering
Benefits • Large and diverse direct origination team with joint front engine across AINV and MidCap Financial (“MidCap”)5
Distribution yield at market price Distribution yield at NAV
Current Market Market capitalization
Base 7 8.8% Base 9 7.8%
Information 6 $915 million
Base + Supplemental 8 10.3% Base + Supplemental 10 9.1%
1 On a fair value basis. 2 As of March 31, 2021. 3 Apollo Investment Management, L.P. 4 See definition of AUM at beginning of presentation. 5 MidCap Financial refers to MidCap FinCo Designated Activity Company, a
designated activity company limited by shares incorporated under the laws of Ireland, and its subsidiaries, including MidCap Financial Services, LLC. MidCap Financial is managed by Apollo Capital Management, L.P., a subsidiary of
Apollo Global Management, Inc., pursuant to an investment management agreement between Apollo Capital Management, L.P. and MidCap FinCo Designated Activity Company. 6 As of May 24, 2021. 7 Most recent quarterly base
distribution annualized divided by share price. 8 Most recent quarterly base and supplemental distribution annualized divided by share price. There can be no assurances that the Board will continue to declare a base distribution of
$0.31 per share or a supplemental distribution. 9 Most recent quarterly base distribution annualized divided by net asset value per share. 10 Most recent quarterly base and supplemental distribution annualized divided by net asset value
per share. There can be no assurances that the Board will continue to declare a base distribution of $0.31 per share or a supplemental distribution.
6Apollo Global Management Overview
Firm Profile Private Equity Credit Real Assets
Founded: 1990
174 Investment 261 Investment 111 Investment
AUM: ~$461 bn1 Professionals2 Professionals Professionals
$89 bn in AUM1 $323 bn in AUM1 $48 bn in AUM1
Employees: 1,725
Offices Worldwide: 163
Key Attributes Global Footprint
Value-oriented, contrarian
approach
London Frankfurt
Opportunistic across market New York
Los Angeles Luxembourg
cycles Madrid Tokyo
Bethesda Delhi
San Diego Shanghai
Houston
Integrated platform across asset Mumbai Hong Kong
classes and geographies
Singapore
Deep industry knowledge
Sydney
All figures as of March 31, 2021, unless otherwise noted. Please refer to the beginning of this presentation for the definition of AUM.
(1) Business segment AUM may not sum to total firm AUM due to rounding.
(2) Private equity headcount includes executive officers and strategy.
(3) Number may not be fully reflective of all Apollo affiliated office space worldwide.
7Broad Credit Coverage and Experienced Team
Apollo Credit
$323 Billion in AUM & 261 Investment Professionals (1)
Jim Zelter, Co-President and Chief Investment Officer of Credit
Anthony Civale, Co-Chief Operating Officer
John Zito, Senior Partner and Deputy Chief Investment Officer of Credit
Corporate Fixed Corporate Direct Structured Credit Consumer & Principal Structured Insurance
Income Credit Origination & ABS Residential Credit Finance Group Solutions Group
$88 billion in AUM $74 billion in AUM $26 billion in AUM $28 billion in AUM $23 billion in AUM $17 billion in AUM (ISG) (3)
39 Professionals 60 Professionals 48 Professionals (2) 15 Professionals 24 Professionals 12 Professionals 44 Professionals
Leadership
Jim Hassett Joseph Moroney Howard Widra Bret Leas Nancy De Liban Jamshid Ehsani Jeff Jacobs
Brigitte Posch John Zito Tanner Powell Rob Graham Jim Galowski (4)
Leslie Mapondera Gary Rothschild Matt O’Mara
Justin Sendak Jasjit Singh
Strategies
• Investment grade • Senior secured loans • Middle market loans • CLO liabilities • Residential real estate • High Grade Alpha • Portfolio construction
bonds • High yield • ABLs / revolvers • CLO equity – RMBS & whole (private capital & asset allocation
• Sovereign bonds loans efficient originations) • Asset & liability
• Event-driven • Aircraft / aviation • Regulatory & solution
• Emerging markets finance capital • Consumer whole • ADIP / ACRA management
• Multi-sector credit
loans & ABS • Insurance ABS • Risk management
• IG private placements • Large corporate • Life sciences • Synthetics
• Conduit CMBS • Life Settlements • Structuring for capital
direct lending • Lender finance • Asset-backed
securities • Small balance CMLs • Insurance Multi- efficiency
• Dislocated credit • Bespoke / sell-side
sourcing Credit
Commercial Real European Infrastructure and
Hybrid Capital
Estate Debt Principal Finance Energy Credit
Other Credit Related Robert Ruberton
Strategies Scott Weiner Skardon Baker Various
Matthew Michelini
$30 billion in AUM $7 billion in AUM $3 billion in AUM
$12 billion in AUM
32 Professionals 27 Professionals 13 Professionals
25 Professionals
Note: All strategies and leadership listed above reflect global coverage. AUM and headcount as of March 31, 2021. Subject to change at any time without notice. Please refer to the slides in this presentation entitled “Risk Factors and
Definitions” for the definition of AUM. (1) Strategy headcounts exclude 19 global business professionals. (2) Includes headcounts for AOP. (3) ISG manages $264 bn in assets for affiliate insurance balance sheets, including those sub-
advised by Apollo’s Credit, Private Equity, and Real Assets businesses. (4) In addition, serves as co-portfolio manager of the SCRF Funds and Partner, European Credit.
8AGM’s Direct Origination Business Transformed by MidCap
Fully integrated into Apollo’s Credit platform and serving as the hub of the Direct Origination Business
MidCap Financial Snapshot
Business Overview
Privately held middle market-focused specialty finance firm that provides senior debt solutions to companies across all industries
Founded in 2008 and headquartered in Bethesda, Maryland with four additional primary offices in New York, Chicago, Los Angeles,
and Atlanta
Only originates first lien senior secured assets, first mortgage loans and ABLs and only underwrites loans originated in-house
Acquired by an entity managed by Apollo Global Management in 2013
Scaled Platform
~$8.2 billion of funds employed and manages / services ~$30 billion of commitments1
229 total professionals, 44 focused on origination as of March 31, 20211
Experienced Management Team
Deep industry expertise and average experience of ~20 years at blue chip lenders, including Merrill Lynch Capital, GE Capital, and
Heller Financial
Members of the senior management team have worked together for over 20 years
Unique platform built over 10+ years with significant barriers to entry
Large, multi-asset class origination teams are challenging to replicate
Broad support from dozens of world-class financing partners provides capital strength
Scalable back-office infrastructure is unusual among asset managers and allows for broader product offerings
Direct origination team generates robust volume of senior floating rate loans on par with any peer
Wide funnel provides a large investment universe resulting in high degree of selectivity
Healthcare Financial MidCap Financial
Partners (“HCFP”) MLC Healthcare MidCap Financial Holdings, Holdings, LLC MidCap launched in
formed HCFP acquired by Heller Heller acquired by GE Finance founded MLC acquired by GE acquired by Athene its current form
LLC formed
1993 1999 2001 2003 2007 2008 2013 2015
Notes: For discussion purposes only. Reflects the views and opinions of Apollo and MidCap Analysts. Subject to change at anytime without notice. Past performance is not indicative nor a guarantee of future returns. On March 29,
2016, the Company received an exemptive order from the SEC permitting greater flexibility to participate in co-investment transactions with certain of its affiliates, including Midcap, where terms other than price and quantity are
negotiated, subject to the conditions included therein. 1 As of March 31, 2021.
9AGM’s Direct Origination Diverse Product Offering and
Dedicated Vehicles
Overview of Products
Leveraged Life Sciences Asset Based Real Estate Lender Franchise
Lending & Technology Lending Lending * Finance Lending *
Lending
Product Capabilities
Senior Cash Flow Debt First Mortgage Debt * Senior Asset Based Debt Senior Venture Debt
Providing Solutions for All Financing Needs of Middle Market Companies
Common Management
Overlapping underwriting and portfolio management resources
Apollo Investment Corporation MidCap
• Business development company (BDC) under the Investment Company • Full-service finance company focused on directly sourced middle market
Act of 1940 that has elected to be treated as a regulated investment senior debt
company (RIC) for federal income tax purposes • Business lines in asset-back loans, leveraged loans, real estate and
• Focused on providing senior debt solutions to US middle market venture lending
companies • Privately-held including by investors affiliated with Apollo Global
• Publicly-listed on NASDAQ Global Select Market • $29.9 billion of commitments managed / serviced of which MidCap holds
• $2.45 billion investment portfolio (on a fair value basis) across 135 $12.4 billion, of which $8.2 billion are funded and outstanding1
companies1 • Established 2008
₋ 80% of the corporate lending portfolio is in investments made
pursuant to the Company’s co-investment order1,2
• Established 2004
Additional capacity in select opportunistic credit accounts
1 As of March 31, 2021. 2 On March 29, 2016, the Company received an exemptive order from the SEC permitting greater flexibility to participate in co-investment transactions with certain of its affiliates, including MidCap, where
terms other than price and quantity are negotiated, subject to the conditions included therein. As of March 31, 2021, the corporate lending portfolio represented 79.1% of the total investment portfolio, at fair value, and excludes
aviation, oil and gas, renewables, shipping and commodities. * AINV has not made a commitment pursuant to the exemptive order in this product category.
10Direct Lending Market Backdrop
11We Believe Direct Lending is an Attractive Asset Class
We believe direct lending is an attractive asset class with solid risk-adjusted returns. Directly originated loans can
provide high current income with lower volatility and credit losses compared to other similar fixed income
investment alternatives.
Higher Average Returns Lower Volatility of Returns Control of Origination is Designed
to Result in Better Economics and
Annualized Average Quarterly Returns Standard Deviation of Quarterly Total Risk-Adjust Returns
2004 – 4Q20 Returns 2004 –4Q20
Full due diligence access
9.1% 5.4%
5.1% Control over credit
7.7% 7.8%
documentation / covenant
protections
5.1% Relationship with borrower
Hold size flexibility & syndication
1.9% control
1.3%
Origination economics
Premium spreads
U.S. Middle U.S. Middle U.S. High Yield U.S. Middle U.S. Middle U.S. High Yield
Market Market Leveraged Index Market Market Leveraged Index
Senior Loans Loans Loan Index Senior Loans Loans Loan Index
Note: U.S. Middle Market Senior Loan data based on Cliffwater Senior Direct Lending-Senior Only (CDLI-S) U.S. Middle Market Loan data based on Cliffwater Direct Lending Index (CDLI), U.S. Leverage Loan Index data based on
S&P LSTA all loans and High Yield Index based on Bloomberg Barclays US Corporate High Yield Bond Index. Index performance is shown for illustrative purposes only and does not reflect any deduction for fees and expenses.
Subject to change.
12We Believe Reduced Bank Lending Spurred Growth in Direct Lending
Direct lending has grown in part due to bank consolidation and changes in bank lending preferences
Number of U.S. Banks Continues to Decline1 Banks’ Reduced Participation in Loan Market2
12,000
1
49% decline since 2000
0.9
10,000
0.8
0.7
8,000
0.6
6,000
0.5
0.4
4,000 0.3
0.2
2,000
0.1
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
LTM 3/21
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Banks & Securities Firms Non-Banks
1. Source: Federal Deposit Insurance Corp. 2. Source: LCD’s Quarterly Leveraged Lending Review: 1Q 2021. Non-banks includes institutional investors and finance companies. Subject to change.
13Middle Market Lending is Well Positioned for Growth
Middle Market Companies Account For $600
Significant Need for Refinancing of Significant Private Equity Dry Powder
a Significant Portion of the U.S.
Middle Market Loan Commitments 2 Supports Continued Demand for Loans 3
Economy 1
Why Sponsors Prefer Direct Lending Solutions
Middle market loan commitments
Customized financing solutions
Ease and speed of execution
$500
maturing through 1Q 2028 Certainty of close
200,000
U.S. middle market
No need for a rating
Can provide delay draw term loans for future
businesses capital needs
Sponsors able to keep valuations private
$400
Non-sponsored syndicated
~$319 billion
One-third of private sector GDP +
Sponsored syndicated $300
~$238 billion
+
Employs ~ 48 million people Estimated Sponsored direct $200
~$358 billion
=
$100
~$915 billion in middle market
loan commitments
$0
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
Dec-19
Dec-20
Feb-21
1. Source: National Center for the Middle Market 4Q 2020 Middle Market Indicator. 2. Source: Refinitiv LPC’s MM Weekly, The Middle Market Opportunity, May 7, 2021. 3 Source: Prequin. As of May 2021. Based on North
America buyout dry powder. Subject to change.
14Investment Strategy & Portfolio
15Apollo Investment Corporation Investment Strategy
Specialty lender primarily focused on providing solutions to U.S. corporate borrowers in the middle market
Primarily sources investments through the Apollo Direct Origination platform which generates robust volume
of senior floating rate loans
AINV’s ability to co-invest alongside the broader Apollo platform enhances ability to win deals on the basis of
size and certainty of execution1
Focused on true first lien exposure, but flexibility to invest across the capital structure
Robust leveraged lending platform with extensive coverage of middle market sponsors
Additional niche capabilities in asset-based lending, life sciences and technology lending, and lender finance
Prudent portfolio construction including granular position sizes and emphasis on diversification (by sponsor,
industry and end market)
1 On March 29, 2016, the Company received an exemptive order from the SEC permitting greater flexibility to participate in co-investment transactions with certain of its affiliates where terms other than price and quantity are
negotiated, subject to the conditions included therein.
16Investment Portfolio as March 31, 2021
Merx Aviation
Corporate Lending 3 $316 million1 or 12.9% of portfolio
$1.9 billion1 or 79.1% of portfolio
80 aircraft (77 narrowbody, 2 widebody, 1
First Lien % 87% freighter)
Floating Rate % 100% 10 aircraft types
Sponsored % 87% 39 lessees in 25 countries
Pursuant to co-investment order % 80%
Weighted average age of aircraft ~11.5 years 8
Average Borrower Exposure $15.6mn
Median EBITDA 4 $37mn Weighted average lease maturity ~4.4 years
Weighted Average Net Leverage 4, 5, 6, 7 5.34x
Weighted Average Attachment Point 4, 6, 7 0.6x
Interest Coverage 4, 6, 7 2.9x Total Portfolio
$2.45 bn1
Weighted Average
Yield
Non-Core and Legacy
8.0%2 $196 million1 or 8.0% of portfolio
Strategy Fair Value % of portfolio
Shipping $105 million 4.3%
Oil & Gas $46 million 1.9%
Renewables $20 million 0.8%
Legacy & Other $26 million 1.1%
1 On a fair value basis. 2 Weighted average yield on debt investments. Based on average of beginning of period and end of period portfolio yield. On a cost basis. Exclusive of investments on non-accrual status. 3 Corporate lending
includes leveraged lending, life sciences, asset based and lender finance. Excludes Merx Aviation and non-core and legacy investments. 4 Source: Company data. 5 Through AINV position. 6 Excludes select investments where metric
is not relevant or appropriate or data is not available. 7 Weighted average by cost. Current metric. 8 Weighted average age of aircraft is weighted by aircraft appraisal value for each aircraft which is updated on a semi-annual basis.
17Portfolio by Industry 1
Portfolio Diversification
Healthcare & Pharmaceuticals 16.1%
High Tech Industries 13.9%
Aviation and Consumer Transport 13.6%
Business Services 13.2%
Transportation – Cargo, Distribution 5.6%
Consumer Services 4.8%
Beverage, Food & Tobacco 4.0%
Consumer Goods – Non-durable 3.6%
Diversified Investment Vehicles, Banking, Finance, Real Estate 2.5%
Advertising, Printing & Publishing 2.4%
Chemicals, Plastics & Rubber 2.3%
Automotive 2.1%
Energy – Oil & Gas 1.9%
Retail 1.7%
Media – Diversified & Production 1.7%
Education 1.7%
Manufacturing, Capital Equipment 1.5%
Insurance 1.4%
Aerospace & Defense 1.2%
Construction & Building 1.2%
Consumer Goods – Durable 1.2%
Telecommunications 0.9%
2
Other 1.5%
1 As of March 31, 2021. On a fair value basis 2 Other includes: Wholesale; Environmental Industries; and Energy – Electricity.
18Portfolio Concentration
Portfolio by Origination Strategy ($ in millions) Top Ten Corporate Lending Portfolio Companies1,2 ($ in millions)
% of % of
Corporate
Fair Value Portfolio Rank Portfolio Company
Lending
Leveraged Lending $ 1,678 69%
Fair Value Portfolio
Life Sciences 127 5%
1 ChyronHego Corporation $ 90 4.6%
Asset Based and Lender Finance 132 5%
2 NFA Group 41 2.1%
Total Corporate Lending Portfolio $ 1,937 79%
3 Simplifi Holdings, Inc. 39 2.0%
Aviation 316 13%
4 RA Outdoors, LLC (Active Outdoors) 38 1.9%
Total Core Assets 2,253 92%
5 MAKS 34 1.8%
Non-Core and Legacy 196 8%
6 Electro Rent Corporation 34 1.7%
Total Portfolio $ 2,449 100% 7 Heniff and Superior 34 1.7%
8 McLarens 33 1.7%
9 PSI Services, LLC 32 1.7%
10 GoHealth 32 1.6%
Top 10 Corporate Lending Portfolio Companies $ 406 21.0%
Other 1,531 79.0%
Total Corporate Lending Portfolio $ 1,937 100.0%
1 Based on corporate lending portfolio. 2 Top ten portfolio companies based on market value as of March 31, 2021.
19Merx Diversified Platform
Well-Positioned to Navigate The Current Environment
Experienced senior management team with over 100 years of combined aviation experience across multiple
economic cycles, with deep industry knowledge and strong relationships with key stakeholders globally
Team of 25+ aviation professionals, further complemented by CFO, tax and operations support at Apollo
Extensive experience in all aspects of aircraft underwriting, acquisition, financing, transaction structuring,
technical management, lessee relationships and investment realization
Long-standing industry relationships resulting in keeping aircraft on lease, ample cash on balance sheet to
meet debt service and de-lever
Defensive resilient predominately narrow body portfolio with conscious diversification across asset types,
lessees, jurisdiction and lease maturities
Diversified pools of value – not cross-collateralized
Growing servicing platform – expands Merx’s revenue sources and aligns to growth in AGM’s overall aviation
platform
20Merx Aviation is Well-Diversified
Fleet compares favorably with other major lessors in terms of asset, geography, age, maturity, and
lessee diversification
Merx Portfolio1 Number of Aircraft by Type1 Aircraft by Age (years)1
80 aircraft
16
11
1 4
5
10 aircraft types 2
7 33
39 lessees in 25 countries 1 7 7
6
5 5 5
4 4
3 3 3
Weighted average age of aircraft 25 2 2 2 2 2 2
~11.5 years
Weighted average lease maturity 737-800 A320-200 777-200F A321-200 A321neo
10
11
12
13
14
15
16
17
18
19
20
21
1
2
3
4
5
6
7
8
9
~4.4 years A319-100 A330-200 737-700 737-900ER 787-8 # of aircraft by age (years)
Aircraft by Region1,3 Staggered Lease Maturity1,4 Aircraft Value by Lessee 1,2 4
4% 3% 14
13
6% 12 19 Lessees
2% 9%
Each < 2%
10 10 8%
32% 23%
7 6%
10%
5 2% 5%
2%
3 2% 6%
2
21% 1 1 4%
22% 2% 4% 4%
4%
2% 3%
Asia North America Europe 2%
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Latin America Africa Australia 3%
# of leases maturing by year 3% 3%
Middle East N/A 3%
1 As of March 31, 2021. 2 On a fair value basis. 3 Based on base value. Aircraft off lease are shown as N/A. 4 Excludes aircraft off lease. For more information about Merx, please visit www.merxaviation.com.
21Credit Quality
The credit quality of our portfolio companies has generally remained stable, despite the current challenging
environment.
Median LTM EBITDA Net Leverage through AINV Position 1
$ in millions 5.93 x
5.65 x
5.27 x 5.48 x 5.31 x 5.34 x
$35 $37 $37 $35 $34 $37
Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21
Total Cash Interest Coverage 1 AINV Attachment Point 1
2.8 x 2.8 x 2.8 x 2.8 x 2.9 x
2.5 x
0.9 x 0.9 x 0.8 x 0.8 x
0.6 x 0.6 x
Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21
Note: Past performance is not indicative nor a guarantee of future results.
Source: Company data.
1 Based on corporate lending portfolio. Excludes select investments where metric is not relevant or appropriate or data is not available. Weighed average by cost. Current metric.
22Credit Quality (continued)
As of March 31, 2021, 5.7% of total investments at amortized cost, or 1.4% of total investments at fair
value, were on non-accrual status.
($ in thousands) 4Q'21 3Q'21 2Q'21 1Q'21 4Q'20
•
Mar-21 Dec-20 Sep-20 Jun-20 Mar-20
Investments on Non-Accrual Status
Non-accrual investments at amortized cost $154,831 $155,313 $142,653 $181,943 $158,694
Non-accrual investments/total portfolio, at amortized cost 5.7% 5.6% 4.9% 6.1% 5.1%
Non-accrual investments at fair value $33,738 $28,014 $30,399 $46,729 $48,668
Non-accrual investments/total portfolio, at fair value 1.4% 1.1% 1.2% 1.7% 1.7%
Investments on Non-Accrual Status as of March 31, 2021 Industry Cost Fair Value
Ambrosia Buyer Corp. Business Services $20,536 $12,795
Crowne Automotive Automotive 1,293 398
Glacier Oil & Gas Corp. (f/k/a Miller Energy Resources, Inc.) Energy – Oil & Gas 36,926 8,111
KLO Holdings, LLC Consumer Goods – Durable 0 0
Solarplicity Group Limited (f/k/a AMP Solar UK) Energy – Electricity 7,637 2,534
Spotted Hawk Energy – Oil & Gas 88,439 9,899
Total $154,831 $33,738
Note: Numbers may not sum due to rounding
23Conclusion
24Reasons to Own AINV
Affiliation with Apollo Global Management, Inc., a leading global alternative investment manager
Access to MidCap’s extensive highly differentiated sourcing 1
Significant expertise in niche verticals with flexible product set
Full-service product suite including term loans, revolver and agent capabilities
Well-diversified senior corporate lending portfolio, which we believe is resilient
Well-positioned to participate in large commitments
Fee structure closely aligns the incentives of the manager with the interests of shareholders
Good liquidity and no near-term debt maturities
Notes: Reflects the views of Apollo. For detailed information on risks relating to AINV, see the latest Form 10-K.
1 On March 29, 2016, the Company received an exemptive order from the SEC permitting greater flexibility to participate in co-investment transactions with certain of its affiliates, including MidCap, where terms other than price and
quantity are negotiated, subject to the conditions included therein.
25Appendices
26Specialty Niches
• Secured loans to manufacturing, distribution, retail and services companies
• Core product consists of revolvers advancing against accounts receivable and inventory; will selectively include term
loans against fixed assets or as supported by cash flow
Asset Based
• High-touch asset class requiring liquidity for daily revolver fundings, collateral evaluation and diligence expertise,
borrowing base monitoring capabilities and complex cash dominion structures
• Leverages MidCap’s in-place portfolio and collateral monitoring infrastructure
• Low loan-to-value loans, covered by material asset values and cash on hand, made to borrowers in product development
(e.g., biotech companies) or early commercialization
• Enterprise value loans
Life Sciences
• Niche market with what we believe to be disproportionate risk reward
• Typically have multiple sources of exit including strong equity support, well funded balance sheets, and liquidation value
• No underwriting of science – only of cash support and development timeline
• Senior secured facilities made to lenders in various industries (consumer and commercial) secured by their underlying
collateral
• Typically benefit from multiple levels of credit support and protection in addition to support of underlying borrowers
• Defined eligibility criteria or loan-by-loan approval, borrowing base structure with ability to remove specific assets, and
Lender Finance
corporate and/or personal recourse with various restrictive covenants
• Highly structured transactions skewing towards larger commitments ($25+ million) to provide diversification of
underlying collateral
• We believe significant opportunities exist to fill the capital void left by large banks exiting and descaling in this asset class
• MidCap Financial acquired PNC Bank’s Franchise Finance business
Franchise Finance
• Franchise finance loans to franchisees operating in the quick service restaurant (QSR) and other industries
27Financial Highlights
($ in thousands, except per share data) 4Q'21 3Q'21 2Q'21 1Q'21 4Q'20
•
Mar-21 Dec-20 Sep-20 Jun-20 Mar-20
Financial Highlights
Net investment income per share $0.39 $0.43 $0.43 $0.43 $0.59
Net realized and change in unrealized gains (losses) from investments and
$0.26 $0.08 $0.08 ($0.39) ($2.81)
foreign currencies per share
Earnings (loss) per share $0.65 $0.51 $0.51 $0.05 ($2.22)
Net asset value per share $15.88 $15.59 $15.44 $15.29 $15.70
Distribution recorded per common share $0.36 $0.36 $0.36 $0.45 $0.45
Net leverage ratio 1
1.36 x 1.43 x 1.56 x 1.66 x 1.71 x
Investment Activity
Commitments 2
Gross commitments made $105,503 $107,734 $17,500 $17,239 $153,442
Exits of commitments (167,784) (256,772) (180,291) (337,822) (212,483)
Net investment commitments made ($62,281) ($149,038) ($162,791) ($320,583) ($59,041)
Funded Investment Activity
Gross fundings, excluding Merx Aviation and revolvers $116,241 $105,450 $54,233 $52,968 $209,775
Net fundings, including Merx Aviation and revolvers ($52,646) ($130,108) ($103,104) ($94,971) $7,675
Notes: Numbers may not sum due to rounding. 1 The Company’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign
currencies, divided by net assets. 2 Based on commitments for core portfolio and non-core and legacy investments.
28Portfolio Highlights
($ in thousands) 4Q'21 3Q'21 2Q'21 1Q'21 4Q'20
• Mar-21 Dec-20 Sep-20 Jun-20 Mar-20
Portfolio by Strategy, at fair value ($)
Leveraged lending $1,677,875 $1,674,018 $1,736,895 $1,761,933 $1,835,702
Life sciences 127,089 123,042 114,447 114,770 112,105
Asset based and lender finance 132,238 161,169 197,518 224,074 236,892
Corporate lending portfolio 1 $1,937,202 $1,958,230 $2,048,860 $2,100,777 $2,184,700
Merx Aviation 315,561 324,605 323,544 329,481 333,747
Core portfolio $2,252,763 $2,282,835 $2,372,404 $2,430,258 $2,518,446
Non-core and legacy 2 196,388 194,032 214,179 240,782 266,987
Total investment portfolio $2,449,151 $2,476,867 $2,586,583 $2,671,040 $2,785,433
Portfolio by Strategy, at fair value (%)
Leveraged lending 69% 68% 67% 66% 66%
Life sciences 5% 5% 4% 4% 4%
Asset based and lender finance 5% 7% 8% 8% 9%
Corporate lending portfolio 1
79% 79% 79% 79% 78%
Merx Aviation 13% 13% 13% 12% 12%
Core portfolio 92% 92% 92% 91% 90%
Non-core and legacy 2 8% 8% 8% 9% 10%
Total investment portfolio 100% 100% 100% 100% 100%
Weighted Average Yield on Debt Investments, average 3
Corporate lending portfolio 1 7.8% 7.8% 7.9% 8.1% 8.5%
Merx Aviation 10.0% 4
10.0% 10.0% 10.0% 12.0%
Core portfolio 8.0% 8.0% 8.1% 8.4% 8.9%
Non-core and legacy 2 8.8%5 8.8% 9.4% 8.8% 7.7%
Total investment portfolio 8.0% 8.1% 8.1% 8.4% 8.9%
Number of portfolio companies, at period end 135 143 147 149 152
1 Corporate lending includes leveraged lending, life sciences, asset based and lender finance. Excludes Merx Aviation and non-core and legacy investments. 2 Non-core assets include oil & gas, structured credit, renewables, shipping
and commodities. 3 Based on average of beginning of period and end of period portfolio yield. On a cost basis. Exclusive of investments on non-accrual status. 4 Based on yield on $191 million debt investment out of a total
investment of $316 million, on a fair value basis. 5 Based on yield on $47 million of debt investments out of total non-core and legacy investments of $196 million, on a fair value basis.
29Corporate Lending Portfolio Detail 1
($ in thousands) 4Q'21 3Q'21 2Q'21 1Q'21 4Q'20
• Mar-21 Dec-20 Sep-20 Jun-20 Mar-20
Portfolio by Asset Class, measured at fair value ($)
First lien $1,679,404 $1,693,609 $1,754,266 $1,794,208 $1,847,574
Second lien 229,499 247,336 284,216 297,618 328,709
Other 28,299 17,285 10,378 8,951 8,417
Total corporate lending portfolio $1,937,202 $1,958,230 $2,048,860 $2,100,777 $2,184,700
Portfolio by Asset Class, measured at fair value (%)
First lien 87% 86% 86% 85% 85%
Second lien 12% 13% 14% 14% 15%
Other 1% 1% 1% 0% 0%
Total corporate lending portfolio 100% 100% 100% 100% 100%
Weighted Average Spread over LIBOR of Floating Rate Assets (in bps)
First lien 596 600 600 598 595
Second lien 871 866 682 860 854
Weighted average spread 628 633 638 636 635
Weighted Average Net Leverage 2, 3, 4, 5
First lien 5.27 x 5.24 x 5.55 x 5.88 x 5.33 x
Second lien 5.80 x 5.68 x 6.09 x 6.16 x 6.01 x
Weighted average net leverage 5.34 x 5.31 x 5.65 x 5.93 x 5.48 x
Interest Rate Type, measured at fair value
Fixed rate % 0% 0% 0% 0% 0%
Floating rate % 100% 100% 100% 100% 100%
Sponsored / Non-sponsored, measured at fair value
Sponsored % 87% 88% 86% 86% 88%
Non-sponsored % 13% 12% 14% 14% 12%
Other Metrics
Pursuant to co-investment order % 80% 80% 78% 77% 76%
Average borrower exposure $15,623 $14,835 $15,405 $15,561 $15,831
Interest coverage 2, 4, 5 2.9 x 2.8 x 2.8 x 2.8 x 2.8 x
Attachment point 2, 4, 5 0.6 x 0.6 x 0.8 x 0.8 x 0.9 x
1 Corporate lending includes leveraged lending, life sciences, asset based and lender finance. Excludes Merx Aviation and non-core and legacy investments. Non-core assets include oil & gas, structured credit, renewables, shipping and
commodities 2 Source: Company data. 3 Through AINV position. 4 Excludes select investments where metric is not relevant or appropriate or data is not available. 5 Weighted average by cost. Current metric.
30Corporate Lending Commitments 1
($ in thousands) 4Q'21 3Q'21 2Q'21 1Q'21 4Q'20
•
Mar-21 Dec-20 Sep-20 Jun-20 Mar-20
Gross Commitments Made by Asset Class
First lien $105,503 $107,063 $17,500 $17,238 $153,439
Second lien 0 0 0 0 0
Other 0 671 0 0 1
Gross commitments made $105,503 $107,734 $17,500 $17,238 $153,440
Gross Commitments Made Information
Number of portfolio companies 11 13 2 2 14
Average commitment size $9,591 $8,287 $8,750 $8,619 $10,960
Floating Rate % 100% 100% 100% 100% 100%
Pursuant to co-investment order % 91% 92% 100% 12% 83%
Weighted Average Spread over LIBOR of New Floating Rate Commitments (in bps)
First lien 690 598 614 401 580
Second lien N/A N/A N/A N/A N/A
Weighted average spread 690 598 614 401 580
Weighted Average Net Leverage of New Commitments 2
First lien 4.2 x 4.4 x 4.7 x 4.4 x 4.8 x
Second lien N/A N/A N/A N/A N/A
Weighted average net leverage 4.2 x 4.4 x 4.7 x 4.4 x 4.8 x
Exits of Commitments by Asset Class
First lien ($144,088) ($219,633) ($105,883) ($104,121) ($161,925)
Second lien (21,961) (36,831) (17,750) (33,637) (49,489)
Other (1,664) (308) 0 (30) 0
Exits of commitments ($167,714) ($256,772) ($123,633) ($137,788) ($211,414)
1 Corporate lending includes leveraged lending, life sciences, asset based and lender finance. Excludes Merx Aviation and non-core and legacy investments. Non-core assets include oil & gas, structured credit, renewables, shipping and
commodities. 2 Source: Company data. Through AINV position. Excludes select investments where debt-to-EBITDA is not a relevant or appropriate metric, or data is not available. Weighted average by cost. Current metric.
31Funded Investment Activity
($ in thousands) 4Q'21 3Q'21 2Q'21 1Q'21 4Q'20
•
Mar-21 Dec-20 Sep-20 Jun-20 Mar-20
Fundings, excluding Merx Aviation and Revolvers
Gross fundings 1 $116,241 $105,450 $54,233 $52,968 $209,775
Sales and syndications 1 0 (17,802) (13,434) (67,828) (122,901)
Repayments 1 (172,259) (184,919) (108,159) (48,947) (126,697)
Net fundings, excluding Merx Aviation and revolvers ($56,019) ($97,271) ($67,360) ($63,806) ($39,823)
Merx Aviation
Gross Fundings $10,500 $0 $0 $0 $0
Repayments (20,000) 0 0 0 0
Net fundings, Merx Aviation ($9,500) $0 $0 $0 $0
Revolvers, excluding Merx Aviation
Gross Fundings $89,425 $51,726 $51,632 $84,921 $214,460
Sales and Syndications 0 0 (730) (1,279) 266
Repayments (76,552) (84,563) (86,646) (114,807) (167,227)
Net fundings, revolvers $12,873 ($32,837) ($35,743) ($31,164) $47,499
Total Funded Investment Activity
Gross Fundings $216,166 $157,176 $105,865 $137,889 $424,235
Sales and Syndications 0 (17,802) (14,164) (69,106) (122,635)
Repayments (268,811) (269,482) (194,805) (163,753) (293,924)
Net fundings, including Merx Aviation and revolvers ($52,646) ($130,108) ($103,104) ($94,971) $7,675
Number of Portfolio Companies
Number of portfolio companies, at beginning of period 143 147 149 152 151
Number of new portfolio companies 4 7 2 1 9
Number of exited portfolio companies (12) (11) (4) (4) (8)
Number of portfolio companies, at period end 135 143 147 149 152
1 Excludes Merx Aviation and revolvers.
32Net Asset Value Rollforward
($ in thousands, except per share data) 4Q'21 3Q'21 2Q'21 1Q'21 4Q'20
Mar-21 Dec-20 Sep-20 Jun-20 Mar-20
Per Share
NAV, beginning of period $15.59 $15.44 $15.29 $15.70 $18.27
Net investment income 0.39 0.43 0.43 0.43 0.59
Net realized and change in unrealized gains (losses) 0.26 0.08 0.08 (0.39) (2.81)
Net increase (decrease) in net assets resulting from operations 0.65 0.51 0.51 0.05 (2.22)
Repurchase of common stock – – – – 0.10
Distribution recorded 0.36 0.36 0.36 (0.45) (0.45)
NAV, end of period $15.88 $15.59 $15.44 $15.29 $15.70
Total
NAV, beginning of period $1,017,411 $1,007,738 $997,943 $1,024,315 $1,215,882
Net investment income 25,635 28,257 27,906 28,229 38,786
Net realized and change in unrealized gains (losses) 16,777 4,909 5,383 (25,234) (186,033)
Net increase (decrease) in net assets resulting from operations 42,411 33,166 33,289 2,995 (147,247)
Repurchase of common stock – – – – (14,954)
Distributions recorded (23,493) (23,493) (23,493) (29,367) (29,367)
NAV, end of period $1,036,329 $1,017,411 $1,007,738 $997,943 $1,024,315
Net Asset Value Per Share
$15.70 $15.29 $15.44 $15.59 $15.88
Mar-20 Jun-20 Sep-20 Dec-20 Mar-21
Note: Numbers may not sum due to rounding.
33Quarterly Operating Results
For the Three Months Ended
($ in thousands, except per share data) 4Q'21 3Q'21 2Q'21 1Q'21 4Q'20
Mar-21 Dec-20 Sep-20 Jun-20 Mar-20
Total investment income
Interest income (excluding PIK) $48,084 $50,415 $52,581 $53,626 $64,782
Dividend income 309 1,076 1,222 1,145 2,380
PIK interest income 1,753 1,627 925 1,514 1,143
Other income 680 1,246 163 384 3,294
Total investment income $50,825 $54,364 $54,891 $56,669 $71,600
Expenses
Management fees $8,691 $8,957 $9,262 $9,524 $10,289
Performance-based incentive fees – – – – –
Interest and other debt expenses 12,966 13,213 13,845 15,392 18,953
Administrative services expense 1,175 1,201 1,201 1,188 1,525
Other general and administrative expenses 2,459 2,813 2,778 2,446 2,185
Total expenses 25,291 26,184 27,085 28,550 32,952
Management and performance-based incentive fees waived and offset (25) – – –
Expense reimbursements (75) (77) (100) (110) (138)
Net expenses $25,191 $26,107 $26,986 $28,440 $32,814
Net investment income $25,635 $28,257 $27,906 $28,229 $38,786
Net realized gains (losses) ($3,379) ($6,711) ($2,999) ($8,417) $20
Net change in unrealized gains (losses) 20,156 11,620 8,382 (16,817) (186,053)
Net realized and change in unrealized gains (losses) 16,777 4,909 5,383 (25,234) (186,033)
Net increase (decrease) in net assets resulting from operations $42,411 $33,166 $33,289 $2,995 ($147,247)
Additional Data
Net investment income per share $0.39 $0.43 $0.43 $0.43 $0.59
Earnings (loss) per share $0.65 $0.51 $0.51 $0.05 ($2.22)
Distribution recorded per common share ($0.36) $0.36 $0.36 $0.45 $0.45
Weighted average shares outstanding 65,259,176 65,259,176 65,259,176 65,259,176 66,270,865
Shares outstanding, end of period 65,259,176 65,259,176 65,259,176 65,259,176 65,259,176
Note: Numbers may not sum due to rounding.
34Quarterly Balance Sheet
($ in thousands, except share and per share data) 4Q'21 3Q'21 2Q'21 1Q'21 4Q'20
•
Mar-21 Dec-20 Sep-20 Jun-20 Mar-20
Assets
Investments at fair value $2,449,151 $2,476,867 $2,586,583 $2,671,040 $2,785,433
Cash and cash equivalents (including foreign currencies) 54,624 54,175 31,334 44,394 43,676
Interest receivable 13,135 14,665 16,876 16,161 19,150
Receivable for investments sold 1,351 5,613 609 56,144 978
Other assets
1 26,227 27,460 17,968 21,236 21,820
Total Assets $2,544,488 $2,578,779 $2,653,369 $2,808,975 $2,871,058
Liabilities
Debt $1,465,371 $1,512,313 $1,600,328 $1,755,104 $1,794,617
Payables for investments purchased – 108 38 499 –
Distributions payable 23,493 23,493 23,493 29,367 29,367
Management and performance-base incentive fees payable 8,666 8,957 9,262 9,524 10,289
Interest payable 2,096 6,369 2,440 7,096 2,887
Accrued administrative services expense 794 2,503 2,324 2,158 2,797
Other liabilities and accrued expenses 7,739 7,625 7,745 7,284 6,787
Total Liabilities $1,508,159 $1,561,368 $1,645,631 $1,811,032 $1,846,743
Net Assets $1,036,329 $1,017,411 $1,007,738 $997,943 $1,024,315
Additional Data
Net asset value per share $15.88 $15.59 $15.44 $15.29 $15.70
Debt-to-equity ratio 1.41 x 1.49 x 1.59 x 1.76 x 1.75 x
Net leverage ratio 2 1.36 x 1.43 x 1.56 x 1.66 x 1.71 x
Shares outstanding, end of period 65,259,176 65,259,176 65,259,176 65,259,176 65,259,176
Note: Numbers may not sum due to rounding.
1 Other assets include cash collateral on option contracts, dividends receivable, deferred financing costs, variation margin receivable on options contracts and prepaid expenses and other assets. 2 The Company’s net leverage ratio is
defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.
35Funding Sources as of March 31, 2021
Debt Facilities ($ in thousands)
Debt Facilities Debt Issued/ Final Maturity Interest Principal Amount
Amended Date Rate Outstanding
Senior Secured Facility (1.81 billion)1 12/22/2020 12/22/2025 L + 200 bps $1,119,186
2025 Notes 3/3/2015 3/3/2025 5.250% 350,000
Weighted Average Annualized Interest Cost2 & Total Debt Obligations 3.044% $1,469,186
Deferred Financing Cost and Debt Discount (3,814)
Total Debt Obligations, Net of Deferred Financing Cost and Debt Discount $1,465,371
Note: Numbers may not sum due to rounding.
1 Total commitments remain $1.810 billion until November 2022 and will decrease to $1.705 thereafter. 2 Includes the stated interest expense and commitment fees on the unused portion of the Senior Secured Facility. Excludes
amortized debt issuance costs. For the three months ended March 31, 2021. Based on average debt obligations outstanding.
36Interest Rate Exposure as of March 31, 2021
Investment Portfolio by Interest Rate Type 1 Funding Sources by Interest Rate Type
Fixed rate debt
14%
Fixed rate assets Common
9% Floating rate
equity
assets
41%
79%
Variable rate
assets
3% Floating rate
Non yielding and debt
non-accrual 45%
assets
9%
Floating Asset Rate Floor Net Investment Income Interest Rate Sensitivity
Par or Cost % of Floating Rate Annual Net Investment Annual Net
(in millions) Portfolio Income Investment Income
(in millions) Per Share
Interest Rate Floors
Basis Point Change
No Floor $122 6%
Up 200 basis points $0.8 $0.012
< 1.00% 139 7%
Up 100 basis points ($5.0) ($0.077)
1.00% to 1.24% 1,546 78%
Up 50 basis points ($3.9) ($0.059)
1.25% to 1.49% 10 1%
Down 25 basis points $0.4 $0.006
1.50% to 1.74% 74 4%
= or > 1.75% 82 4%
Total $1,973 100%
Note: Numbers may not sum due to rounding.
1 Total investment portfolio. On a fair value basis.
37Realized and Change in Unrealized Gains (Losses) by Strategy
Gains (Losses)1 by Strategy, Total Gains (Losses)1 by Strategy, per Share
($ in millions) 4Q'21 3Q'21 2Q'21 1Q'21 4Q'20 Trailing 5 per share 4Q'21 3Q'21 2Q'21 1Q'21 4Q'20 Trailing 5
Mar-21 Dec-20 Sep-20 Jun-20 Mar-20 Quarters Mar-21 Dec-20 Sep-20 Jun-20 Mar-20 Quarters
Leveraged lending $14.5 $19.7 $21.8 $3.0 ($61.4) ($2.4) Leveraged lending $0.22 $0.30 $0.33 $0.05 ($0.93) ($0.03)
Life sciences ($0.3) $1.7 $1.1 $0.3 ($5.8) ($2.9) Life sciences ($0.00) $0.03 $0.02 $0.00 ($0.09) $0.04
Asset based and lender finance ($1.3) ($2.0) $2.2 $2.3 ($6.6) ($5.3) Asset based and lender finance ($0.02) ($0.03) $0.03 $0.04 ($0.10) $0.02
Fx gain (loss) on corporate lending ($0.6) ($8.6) ($7.3) ($1.0) $9.2 ($8.3) Fx gain (loss) on corporate lending ($0.01) ($0.13) ($0.11) ($0.01) $0.14 ($0.12)
Corporate lending portfolio $12.4 $10.8 $17.8 $4.7 ($64.5) ($18.9) Corporate lending portfolio $0.19 $0.17 $0.27 $0.07 ($0.97) ($0.27)
Merx Aviation $0.5 $1.1 ($5.9) ($4.3) ($29.3) ($38.0) Merx Aviation $0.01 $0.02 ($0.09) ($0.07) ($0.44) ($0.58)
Core portfolio $12.8 $11.9 $11.8 $0.4 ($93.9) ($57.0) Core portfolio $0.20 $0.18 $0.18 $0.01 ($1.42) ($0.85)
Oil & Gas $2.9 ($11.6) ($6.1) ($3.7) ($52.3) ($70.8) Oil & Gas $0.05 ($0.18) ($0.09) ($0.06) ($0.79) ($1.07)
Renewables $1.1 $4.3 ($1.2) ($0.3) ($14.0) ($10.1) Renewables $0.02 $0.07 ($0.02) $0.00 ($0.21) ($0.15)
Shipping ($0.4) $0.2 $0.0 ($9.3) ($1.5) ($11.0) Shipping ($0.01) $0.00 $0.00 ($0.14) ($0.02) ($0.16)
Legacy & Other $0.3 $0.3 $0.9 ($12.4) ($24.8) ($35.7) Legacy & Other $0.01 $0.00 $0.01 ($0.19) ($0.37) ($0.54)
Fx gain (loss) non-core ($0.0) ($0.1) ($0.1) $0.0 $0.5 $0.3 Fx gain (loss) non-core ($0.00) ($0.00) $0.00 $0.00 $0.01 $0.01
Non-core and legacy $3.9 ($7.0) ($6.5) ($25.6) ($92.2) ($127.3) Non-core and legacy $0.06 ($0.11) ($0.10) ($0.39) ($1.39) ($1.93)
Total investment portfolio $16.8 $4.9 $5.4 ($25.2) ($186.0) ($184.1) Total investment portfolio $0.26 $0.08 $0.08 ($0.39) ($2.81) ($2.79)
Corporate Lending Gain (Loss) by Lien Type Corporate Lending Gain (Loss) by Lien Type
($ in millions) 4Q'21 3Q'21 2Q'21 1Q'21 4Q'20 Trailing 5 per share 4Q'21 3Q'21 2Q'21 1Q'21 4Q'20 Trailing 5
Mar-21 Dec-20 Sep-20 Jun-20 Mar-20 Quarters Mar-21 Dec-20 Sep-20 Jun-20 Mar-20 Quarters
1st lien corporate lending $9.7 $13.8 $14.6 $4.2 ($52.5) ($10.2) 1st lien corporate lending $0.15 $0.21 $0.22 $0.06 ($0.79) ($0.14)
2nd lien corporate Lending $2.7 ($2.9) $3.2 $0.5 ($12.1) ($8.7) 2nd lien corporate Lending $0.04 ($0.05) $0.05 $0.01 ($0.18) ($0.13)
Corporate lending portfolio $12.4 $10.8 $17.8 $4.7 ($64.5) ($18.9) Corporate lending portfolio $0.19 $0.17 $0.27 $0.07 ($0.97) ($0.27)
1 Realized and changed in unrealized gains (losses).
38Outstanding Commitments
($ in thousands) 4Q'21 3Q'21 2Q'21 1Q'21 4Q'20
Mar-21 Dec-20 Sep-20 Jun-20 Mar-20
Revolver Obligations and Bridge Loans
Funded 1 $110,773 $98,160 $135,638 $176,969 $208,998
Unfunded 1, 2 264,461 310,491 281,665 275,095 269,716
Par $375,235 $408,651 $417,303 $452,064 $478,715
3
Unfunded Revolver and Bridge Loan Availability
Unavailable $113,120 $98,561 $98,710 $95,417 $131,841
Available 151,341 211,930 182,955 179,678 137,876
Total Unfunded $264,461 $310,491 $281,665 $275,095 $269,718
Delayed Draw Term Loans 4
Par $172,247 $186,123 $175,748 $194,788 $230,778
Number of borrowers 37 38 36 38 46
See Note 8 (Commitments and Contingencies) in the Company's Form 10-K for the period ended March 31, 2021 for additional information.
1 The funded revolver obligations include standby letters of credit issued and outstanding under the Senior Secured Facility. The unfunded revolver obligations include all other standby letters of credit issued and outstanding. 2 The
unfunded revolver obligations relate to loans with various maturity dates. 3 Revolver availability is determined based on each loan’s respective credit agreement which includes covenants that need to be met prior to funding and / or
collateral availability for asset-based revolver obligations. 4 The delayed draw term loans include conditionality for the use of proceeds and are generally only accessible for acquisitions and also require lender approval. In addition, the
delayed draw term loans require the satisfaction of certain pre-negotiated terms and conditions which can include covenants to maintain specified leverage levels and other related borrowing base covenants.
39Shareholder Alignment
Fee Structure Closely Aligns the Incentives of the Manager with the Interests of the Shareholders
• The base management fee was permanently reduced 1 from an annual rate of 2.0% of the Company’s gross
assets to
- 1.5% of gross assets up to 1.0x debt-to-equity
- 1.0% of gross assets in excess of 1.0x debt-to-equity 2
• The incentive fee on income was revised to include a total return requirement
- Rolling twelve quarter look-back beginning from April 1, 2018 3
Share Repurchase Program
• Board of Directors has authorized $250 million of share repurchases of which the Company has repurchased
$223.1 million 4
• The Company has approximately $26.9 million available for stock repurchases 5
1 Effective April 1, 2018. 2 The Company announced that on April 4, 2018, its Board of Directors approved the application of the modified asset coverage requirements set forth in new Section 61(a)(2) of the Investment Company
Act of 1940, as amended by the SBCAA. As a result, the asset coverage ratio test applicable to the Company decreased from 200% to 150%, effective April 4, 2019. 3 The calculation of the incentive fee with the total return
requirement began on January 1, 2019. The incentive fee rate and performance threshold remain 20% and 7% respectively. There was no change to the catch-up provision. For the period between April 1, 2018 through December 31,
2018, the incentive fee rate was waived to 15%, subject to the 7% annualized performance threshold. 4 Since the inception of the share repurchase program and through May 19, 2021. Inclusive of commissions. 5 As of May 19, 2021.
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