Apollo Senior Floating Rate Fund Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

 

Investment Company Act file number                 811-22481                            

Apollo Senior Floating Rate Fund Inc.

(Exact name of registrant as specified in charter)

9 West 57th Street

New York, New York 10019

(Address of principal executive offices) (Zip code)

Joseph Moroney, President

9 West 57th Street

New York, New York 10019

(Name and address of agent for service)

Registrant’s telephone number, including area code:  (212) 515-3200

Date of fiscal year end:  December 31

Date of reporting period:  June 30, 2015


Item 1. Reports to Stockholders.

The Report to Shareholders is attached herewith.


LOGO

 

 

Apollo Senior Floating Rate Fund Inc. (NYSE: AFT)

Apollo Tactical Income Fund Inc. (NYSE: AIF)

Semi-Annual Report

 

June 30, 2015

(unaudited)


 

TABLE OF CONTENTS

 

Manager Commentary

   3

Financial Data

  

Apollo Senior Floating Rate Fund Inc.

   4

Apollo Tactical Income Fund Inc.

   5

Schedule of Investments

  

Apollo Senior Floating Rate Fund Inc.

   6

Apollo Tactical Income Fund Inc.

   15

Statements of Assets and Liabilities

   23

Statements of Operations

   24

Statements of Changes in Net Assets

  

Apollo Senior Floating Rate Fund Inc.

   25

Apollo Tactical Income Fund Inc.

   26

Statement of Cash Flows

  

Apollo Senior Floating Rate Fund Inc.

   27

Apollo Tactical Income Fund Inc.

   28

Financial Highlights

  

Apollo Senior Floating Rate Fund Inc.

   29

Apollo Tactical Income Fund Inc.

   30

Notes to Financial Statements

   31

Additional Information

   45

Important Information About This Report

   48

Economic and market conditions change frequently.

There is no assurance that the trends described in this report will continue or commence.

 

 

 

 

 

 

This report, including the financial information herein, is transmitted to shareholders of the Funds for their information. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. Statements and other information herein are as dated and are subject to change.


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Manager Commentary (unaudited)

As of June 30, 2015

Dear Shareholders,

We would like to start by saying thank you for your interest in the Apollo Senior Floating Rate Fund Inc. and the Apollo Tactical Income Fund Inc. (the “Funds”). We appreciate the trust and confidence you have placed with us through your investment in the Funds.

The first half of 2015 played out largely as we suspected it might in our December 2014 letter, with global markets exhibiting elevated volatility as investors dealt with uncertainty over rates, geopolitical and growth concerns, specifically with regards to Greece and China, and the ongoing impact of falling or low commodity prices. However, despite these challenges, high yield bonds and leveraged loans were able to generate positive performance of +2.76%1 and +2.83%2, respectively, over the first half of the year, outperforming equities and a variety of other fixed income asset classes.

Both high yield bonds and leveraged loans have been able to post these strong relative returns despite experiencing quite divergent technical pictures. High yield bond issuance is running only slightly behind 2014, a year that saw the third highest such annual volume on record, while loan issuance volumes are down 36%3 on a gross basis versus 2014. High yield investors continued to pour money into the sector, seemingly shrugging off concerns about Greece and rates and focused on reaching for yield in a low default rate environment. This allowed high yield issuers to issue more debt than they did the year before yet still experience solid performance, even more impressively in light of the high yield market’s heavier exposure to oil and gas credits. The loan markets on the other hand, benefitted from the negative impact that Leveraged Lending Guidelines, issued by the Federal Reserve and Office of the Comptroller of the Currency in 2013 and 2014, had on the willingness of banks to underwrite certain types of loans. Though retail flows continued to be negative, collateralized loan obligations issuance continued at a strong pace, and combined with the limited amount of supply, created an environment ripe for loan prices to rise and spreads to compress via a wave of repricing to start the second quarter.

The benign default environment seen during 2014 continued during the first half of 2015, as the default rate by principal amount for the 12-month period ended June 30, 2015 was 1.9%3 for high yield bonds and 1.7%3 for leveraged loans. This compares to long term averages of 3.7%3 for high yield bonds and 3.4%3 for leveraged loans since 1998. Despite the overall trend of increased leverage and subpar economic growth over the last two to three years, high yield and loan borrowers continue to display credit metrics supportive of a continuation of the low-default rate environment revenues and earnings before interest, taxes, depreciation and amortization for high yield companies increased 3.3%4 and 12.5%4, respectively, excluding energy-related issuers. Furthermore, combined with diminishing tail risks and expectations of a longer path to higher interest rates, it is reasonable to expect another 12 to 24 months of below average default rates, excluding energy.

However, the market will continue to face challenges, some familiar, some new. Familiar challenges include the ongoing uncertainties regarding Europe and China, the length and depth of the selloff in commodities and the uncertain reaction of financial markets when interest rates finally start to move. The “new” challenges, in our opinion, primarily relate to changing regulations and the future impact they will have on the markets. Will the banks choose to exit certain businesses entirely? Who will fill those gaps? How will this impact returns to investors? Though we have seen some of these issues start to emerge recently, they will surely play out over the long term, creating risks and opportunities for investors along the way.

We appreciate your interest and support in the Funds. If you have any questions about the Funds, please call 1-888-301-3838, or go to our website at www.agmfunds.com.

Sincerely,

Apollo Credit Management, LLC

 

1JPMorgan Domestic High Yield Index, June 30, 2015

2S&P/LSTA Leveraged Loan Total Return Index, June 30, 2015

3JPMorgan in the Credit Strategy Weekly Update, July 17, 2015

4JPMorgan in the Credit Strategy Weekly Update, July 10, 2015

 

Semi-Annual Report  |  3


Apollo Senior Floating Rate Fund Inc.

Financial Data

As of June 30, 2015 (unaudited)

 

Portfolio Composition (as % of Current Market

Value of Investment Securities)

 

 

 

 

Loans

 

     93.5%   

 

High Yield Bonds

 

     5.6%   

 

Equity/Other

 

     0.9%   

 

Portfolio Characteristics (a)

 

 

 

 

Weighted Average Floating-Rate Spread

 

     4.90%   

 

Weighted Average Fixed-Rate Coupon

 

     10.00%   

 

Weighted Average Days to Reset (floating assets)

 

     55   

 

Weighted Average Modified Duration (in years) (fixed assets)

 

     1.90   

 

Average Position Size

 

     $2,084,964   

 

Number of Positions

 

     205   

 

Weighted Average Rating

 

     B   

 

Credit Quality (b)

 

 

 

 

BB

 

     14.8%   

 

B

 

     72.2%   

 

CCC+ or Lower

 

     8.0%   

 

Not Rated

 

     5.0%   

 

Top 5 Industries (as % of Current Market Value of

Investment Securities) (c)

 

 

 

 

Healthcare & Pharmaceuticals

 

     11.0%   

 

Banking, Finance, Insurance & Real Estate

 

     9.5%   

 

High Tech Industries

 

     9.1%   

 

Media: Broadcasting & Subscription

 

     7.8%   

 

Services: Business

 

     6.7%   

 

Total

 

     44.1%   

Top 10 Issuers (as % of Current Market Value of

Investment Securities) (d)

 

 

 

 

First Data Corp.

 

     3.4%   

 

Asurion, LLC

 

     1.4%   

 

Opal Acquisition, Inc.

 

     1.4%   

 

WideOpenWest Finance, LLC

 

     1.3%   

 

Global Tel*Link Corp.

 

     1.3%   

 

PetSmart, Inc.

 

     1.3%   

 

Charming Charlie, LLC

 

     1.3%   

 

Securus Technologies Holdings, Inc.

 

     1.2%   

Surgery Center Holdings, Inc.

 

     1.2%   

 

Valeant Pharmaceuticals International, Inc.

 

     1.2%   

 

Total

 

     15.0%   

 

Performance Comparison

 

 

 
     Six Months
Ended
June 30,
2015
   

Since

Inception

on February 23,
2011 to
June 30,

2015

 

 

 

 

AFT - Market Price

 

     10.48%(e)           4.24%(e)(f)           

 

AFT - NAV

 

     4.01%(e)           6.20%(e)(f)           

 

S&P/LSTA Leveraged Loan Index (g)

 

     (0.42)%             4.17%(f)              
 

 

(a) Averages based on par value of investment securities, except for the weighted average modified duration, which is based on market value.
(b) Credit quality is calculated as a percentage of fair value of investment securities at June 30, 2015. The quality ratings reflected were issued by Standard & Poor’s Ratings Group (“S&P”), a nationally recognized statistical rating organization. Credit quality ratings reflect the rating agency’s opinion of the credit quality of the underlying positions in the Fund’s portfolio and not that of the Fund itself. Credit quality ratings are subject to change.
(c) The industry classifications reported are from widely recognized market indexes or rating group indexes, and/or as defined by Fund management, with the primary source being Moody’s Investors Service (“Moody’s”), a nationally recognized statistical rating organization.
(d) Holdings are subject to change and are provided for informational purposes only.
(e) Performance reflects total return assuming all distributions were reinvested at the dividend reinvestment rate. Past performance does not necessarily indicate how the Fund will perform in the future. The performance information provided does not reflect the deduction of taxes that a shareholder would pay on distributions received from the Fund.
(f) Annualized.
(g) The S&P/LSTA Leveraged Loan Index is a broad index designed to reflect the performance of the U.S. Dollar facilities in the leveraged loan market.

 

4  |  Semi-Annual Report


Apollo Tactical Income Fund Inc.

Financial Data

As of June 30, 2015 (unaudited)

 

Portfolio Composition (as % of Current Market

 

Value of Investment Securities)

      

 

 

 

Loans

 

     67.6%   

 

High Yield Bonds

 

     21.6%   

 

Structured Products

 

     9.8%   

 

Equity/Other

 

     1.0%   

 

Portfolio Characteristics (a)

      

 

 

 

Weighted Average Floating-Rate Spread

 

     5.61%   

 

Weighted Average Fixed-Rate Coupon

 

     8.42%   

 

Weighted Average Days to Reset
(floating assets)

 

     54   

 

Weighted Average Modified Duration (in years)
(fixed assets)

 

     3.30   

 

Average Position Size

 

     $2,216,111   

 

Number of Positions

 

     181   

 

Weighted Average Rating

 

     B   

 

Credit Quality (b)

      

 

 

 

BB

 

     13.0%   

 

B

 

     60.6%   

 

CCC+ or Lower

 

     15.2%   

 

Not Rated

     11.2%   

 

Top 5 Industries (as % of Current Market Value of

Investment Securities) (c)

 

 

 

 

High Tech Industries

 

     8.0%   

 

Energy: Oil & Gas

 

     8.0%   

 

Banking, Finance, Insurance & Real Estate

 

     7.2%   

 

Telecommunications

 

     6.8%   

 

Healthcare & Pharmaceuticals

 

     6.6%   

 

Total

 

     36.6%   

Top 10 Issuers (as % of Current Market Value of

Investment Securities) (d)

 

 

 

 

 

 

Laureate Education, Inc.

 

     1.5%   

 

TPC Group, Inc.

 

     1.5%   

 

JFIN CLO, Ltd.

 

     1.4%   

 

Onex Carestream Finance, L.P.

 

     1.4%   

 

Avaya, Inc.

 

     1.4%   

 

Summit Midstream Holdings, LLC/ Summit Midstream Finance Corp.

 

     1.4%   

 

Surgery Center Holdings, Inc.

 

     1.3%   

 

Land O’Lakes Capital Trust I

 

     1.3%   

 

Atlas Senior Loan Fund, Ltd.

 

     1.3%   

 

First Data Corp.

 

     1.3%   

 

Total

 

     13.8%   

 

Performance Comparison

 

 

 
     Six Months
Ended
June 30,
2015
   

Since

Inception

on February 25,
2013 to
June 30,

2015

 

 

 

 

AIF - Market Price

 

     3.14%(e)           (1.89)%(e)(f)           

 

AIF - NAV

 

     5.07%(e)           6.69%(e)(f)           

 

S&P/LSTA Leveraged Loan Index (g)

 

     (0.42)%           3.59%(f)              
 

 

(a) Averages based on par value of investment securities, except for the weighted average modified duration, which is based on market value.
(b) Credit quality is calculated as a percentage of fair value of investment securities at June 30, 2015. The quality ratings reflected were issued by S&P, a nationally recognized statistical rating organization. Credit quality ratings reflect the rating agency’s opinion of the credit quality of the underlying positions in the Fund’s portfolio and not that of the Fund itself. Credit quality ratings are subject to change.
(c) The industry classifications reported are from widely recognized market indexes or rating group indexes, and/or as defined by Fund management, with the primary source being Moody’s, a nationally recognized statistical rating organization. The Top 5 Industries table above excludes Structured Products which represent 9.8% of the portfolio as of June 30, 2015.
(d) Holdings are subject to change and are provided for informational purposes only.
(e) Performance reflects total return assuming all distributions were reinvested at the dividend reinvestment rate. Past performance does not necessarily indicate how the Fund will perform in the future. The performance information provided does not reflect the deduction of taxes that a shareholder would pay on distributions received from the Fund.
(f) Annualized.
(g) The S&P/LSTA Leveraged Loan Index is a broad index designed to reflect the performance of the U.S. Dollar facilities in the leveraged loan market.

 

Semi-Annual Report  |  5


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments

June 30, 2015  (unaudited)

 

   

Principal
 Amount ($) 

 

   

 Value ($) 

 

 

Senior Loans - 136.7%(a)

   

AEROSPACE & DEFENSE - 8.6%

   

 

Alion Science and Technology Corp.

   

Tranche A Term Loan, (LIBOR + 7.00%, 1.00% Floor), 8.00%, 08/17/18(b)(c)

    1,862,744            1,825,490   

Tranche B Term Loan, (LIBOR + 10.00%, 1.00% Floor), 11.00%, 08/16/19(b)(c)

    1,823,684            1,763,247   

B/E Aerospace, Inc.

   

Term Loan, (LIBOR + 3.25%, 0.75% Floor), 4.00%, 12/16/21(c)

    2,634,688            2,653,210   

Camp International Holding Co.

   

2013 First Lien Replacement Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 05/31/19(c)

    2,405,688            2,413,711   

2013 Second Lien Replacement Term Loan, (LIBOR + 7.25%, 1.00% Floor), 8.25%, 11/29/19(c)

    1,000,000            1,005,000   

DAE Aviation Holdings, Inc.

   

First Lien Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 06/24/22(c)(d)

    2,780,000            2,780,000   

Photonis Technologies SAS

   

First Lien Initial Dollar Term Loan, (LIBOR + 7.50%, 1.00% Floor), 8.50%, 09/18/19(c)

    2,457,759            2,359,449   

SRA International, Inc.

   

Term Loan, (LIBOR + 5.25%, 1.25% Floor), 6.50%, 07/20/18(c)

    3,460,380            3,474,793   

TASC, Inc.

   

First Lien New Term Loan, (LIBOR + 6.00%, 1.00% Floor), 7.00%, 05/22/20(c)

    497,500            503,099   

First Lien Term Loan, (LIBOR + 6.00%, 1.00% Floor), 7.00%, 05/22/20(c)

    1,420,853            1,436,845   

Second Lien Term Loan, 12.00%, 05/21/21(e)

    2,233,239            2,328,151   

U.S. Joiner Holding Co.

   

Term Loan, (LIBOR + 6.00%, 1.00% Floor), 7.00%,
04/16/20(b)(c)

    1,638,227            1,630,036   

Vencore, Inc.

   

Second Lien Term Loan, (LIBOR + 8.00%, 1.00% Floor), 9.00%, 05/23/20(c)

    606,000            607,012   
   

 

 

 
              24,780,043   
   

 

 

 

AUTOMOTIVE - 1.1%

   

 

American Tire Distributors, Inc.

   

Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 09/01/21(c)

    1,871,710            1,891,606   
   

Principal
 Amount ($) 

 

   

 Value ($) 

 

 

AUTOMOTIVE (continued)

   

 

Fram Group Holdings, Inc./Prestone Holdings, Inc.

   

Second Lien Term Loan, (LIBOR + 9.50%, 1.50% Floor), 11.00%, 01/29/18(c)

    1,490,285            1,371,062   
   

 

 

 
            3,262,668   
   

 

 

 

 

BANKING, FINANCE, INSURANCE & REAL ESTATE - 8.5%

  

 

Amwins Group, LLC

   

First Lien New Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 09/06/19(c)

    4,369,466            4,415,345   

Asurion, LLC

   

Incremental Tranche B-1 Term Loan, (LIBOR + 3.75%, 1.25% Floor), 5.00%, 05/24/19(c)

    4,379,819            4,395,937   

Second Lien Term Loan, (LIBOR + 7.50%, 1.00% Floor), 8.50%, 03/03/21(c)

    1,562,000            1,590,803   

Bats Global Markets, Inc.

   

Term Loan, (LIBOR + 3.75%, 0.00% Floor), 3.94%, 03/13/18(c)

    2,032,204            2,034,744   

First Data Corp.

   

2017 Second New Dollar Term Loan, (LIBOR + 3.50%, 0.00% Floor), 3.69%, 03/24/17(c)

    2,500,000            2,495,700   

Hyperion Insurance Group, Limited (United Kingdom)

   

Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 04/29/22(c)(f)

    2,041,549            2,053,033   

Jefferies Finance LLC (JFIN Co-Issuer Corp.)

   

First Lien Term Loan, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 05/14/20(b)(c)

    1,521,739            1,521,739   

Medical Card System, Inc.

   

Term Loan (3.00%, PIK), (LIBOR + 10.00%, 2.00% Floor), 11.24%, 03/17/17(b)(c)(g)

    4,681,843            3,440,124   

MMM Holdings, Inc.

   

MMM Term Loan, (LIBOR + 8.25%, 1.50% Floor), 9.75%, 12/12/17(b)(c)

    660,493            527,292   

MSO of Puerto Rico, Inc.

   

MSO Term Loan, (LIBOR + 8.25%, 1.50% Floor), 9.75%, 12/12/17(b)(c)

    480,175            383,338   

Walter Investment Management

   

Corp.

   

Tranche B Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 12/18/20(c)

    1,685,554            1,596,540   
   

 

 

 
            24,454,595   
   

 

 

 

 

BEVERAGE, FOOD & TOBACCO - 3.8%

  

 

ARG IH Corp.

   

Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 11/15/20(c)

    1,896,000            1,905,480   
 

 

6  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments  (continued)

June 30, 2015  (unaudited)

 

 

   

Principal
 Amount ($) 

 

   

 Value ($) 

 

 

Senior Loans(a)  (continued)

   

BEVERAGE, FOOD & TOBACCO (continued)

  

 

Hearthside Group Holdings, LLC

   

Term Loan, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 06/02/21(c)

    3,114,302            3,124,672   

Performance Food Group, Inc.

   

Second Lien Initial Term Loan, (LIBOR + 5.25%, 1.00% Floor), 6.25%, 11/14/19(c)

    1,028,498            1,033,640   

PFS Holding, Corp.

   

First Lien Term Loan, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 01/31/21(c)

    2,775,863            2,565,355   

Winebow Holdings, Inc. (The Vintner Group, Inc.)

   

Second Lien Term Loan, (LIBOR + 7.50%, 1.00% Floor), 8.50%, 01/02/22(b)(c)

    2,260,897            2,181,766   
   

 

 

 
              10,810,913   
   

 

 

 

 

CAPITAL EQUIPMENT - 0.8%

   

 

Zebra Technologies Corp.

   

Initial Term Loan, (LIBOR + 4.00%, 0.75% Floor), 4.75%, 10/27/21(c)

    2,344,425            2,373,742   
   

 

 

 

 

CHEMICALS, PLASTICS & RUBBER - 3.5%

  

 

 

Allnex (Luxembourg) & Cy S.C.A. (Luxembourg)

   

Tranche B-1 Term Loan, (LIBOR + 3.25%, 1.25% Floor), 4.50%, 10/03/19(b)(c)(f)

    422,496            423,553   

Allnex USA, Inc. (Luxembourg)

   

Tranche B-2 Term Loan, (LIBOR + 3.25%, 1.25% Floor), 4.50%, 10/03/19(b)(c)(f)

    219,213            219,761   

Chemstralia Pty, Ltd. (Chemstralia Finco, LLC) (Australia)

   

Initial Term Loan, (LIBOR + 6.25%, 1.00% Floor), 7.25%,
02/28/22(b)(c)(f)

    2,267,045            2,278,380   

Magnetation, LLC / Mag Finance Corp.

   

Term Loan (3.00% PIK), 12.00%, 12/07/15(b)(e)

    123,544            119,565   

Polymer Group, Inc.

   

Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 12/19/19(c)

    263,066            264,490   

Trinseo Materials Operating S.C.A. (Trinseo Materials Finance, Inc.) (Luxembourg)

   

First Lien Term Loan B, (LIBOR + 3.25%, 1.00% Floor), 4.25%, 11/05/21(c)(f)

    1,254,545            1,255,530   

U.S. Farathane, LLC

   

Initial Term Loan, (LIBOR + 5.75%, 1.00% Floor), 6.75%, 12/23/21(c)

    952,961            962,491   
   

Principal
 Amount ($) 

 

   

 Value ($) 

 

 

CHEMICALS, PLASTICS & RUBBER (continued)

  

 

Univar Inc.

   

Term Loan B, (LIBOR + 3.50%, 1.50% Floor), 5.01%, 06/30/17(c)

    1,710,177            1,710,827   

Term Loan, (LIBOR + 3.25%, 1.00% Floor), 4.25%,
06/24/22(c)(d)

    2,776,436            2,776,880   
   

 

 

 
              10,011,477   
   

 

 

 

CONSTRUCTION & BUILDING - 0.2%

  

 

Headwaters, Inc.

   

Term Loan B, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 03/24/22(c)

    500,000            501,250   
   

 

 

 

CONSUMER GOODS: DURABLE - 0.1%

  

 

Britax US Holdings, Inc.

   

Initial Dollar Term Loan, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 10/15/20(c)

    461,497            366,890   
   

 

 

 

CONSUMER GOODS: NON-DURABLE - 3.8%

  

 

ABG Intermediate Holdings 2, LLC

   

First Lien Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 05/27/21(c)

    3,505,515            3,506,970   

BRG Sports, Inc.

   

First Lien Term Loan, (LIBOR + 5.50%, 1.00% Floor), 6.50%, 04/15/21(c)

    1,835,486            1,844,664   

Fender Musical Instruments Corp.

   

Initial Term Loan, (LIBOR +

   

4.50%, 1.25% Floor), 5.75%,

   

04/03/19(c)

    327,500            328,592   

Nine West Holdings, Inc.

   

Unsecured Initial Term Loan, (LIBOR + 5.25%, 1.00% Floor), 6.25%, 01/08/20(c)

    768,672            548,970   

Polyconcept Investments, B.V.

   

Term Loan, (LIBOR + 4.75%, 1.25% Floor), 6.00%, 06/28/19(c)

    3,723,119            3,730,100   

The Topps Co., Inc.

   

Term Loan, (LIBOR + 6.00%, 1.25% Floor), 7.25%, 10/02/18(c)

    1,104,789            1,088,217   
   

 

 

 
      11,047,513   
   

 

 

 

CONTAINERS, PACKAGING & GLASS - 3.8%

  

 

BWay Intermediate Co., Inc.

   

Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 08/14/20(c)

    3,307,520            3,317,162   

Hoover Group

   

First Lien Term Loan, (LIBOR + 6.75%, 1.00% Floor), 7.75%, 01/28/21(b)(c)

    1,488,001            1,391,281   

NVLX Acquisition, LLC

   

First Lien Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 12/05/21(c)

    2,547,239            2,572,711   
 

 

 

See accompanying Notes to Financial Statements.  |  7


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments  (continued)

June 30, 2015  (unaudited)

 

 

   

Principal
 Amount ($) 

 

   

 Value ($) 

 

 

Senior Loans(a) (continued)

  

 

CONTAINERS, PACKAGING & GLASS (continued)

  

 

Pelican Products, Inc.

   

First Lien Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 04/10/20(c)

    2,758,219            2,758,232   

Tekni-Plex, Inc.

   

First Lien Tranche B-1 Term Loan, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 06/01/22(c)

    772,028            773,669   
   

 

 

 
              10,813,055   
   

 

 

 

ENERGY: OIL & GAS - 8.0%

   

 

American Energy-Marcellus, LLC

   

First Lien Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 08/04/20(c)

    3,061,946            2,394,074   

Azure Midstream Energy, LLC

   

Term Loan, (LIBOR + 6.50%, 1.00% Floor), 7.50%, 11/15/18(c)

    651,825            650,195   

BlackBrush Oil & Gas, L.P.

   

Closing Date Second Lien Term Loan, (LIBOR + 6.50%, 1.00% Floor), 7.50%, 07/30/21(c)

    3,090,344            2,870,157   

Chief Exploration & Development, LLC

   

Second Lien Term Loan, (LIBOR + 6.50%, 1.00% Floor), 7.50%, 05/16/21(c)

    1,950,784            1,847,393   

CITGO Holding, Inc.

   

Term Loan, (LIBOR + 8.50%, 1.00% Floor), 9.50%, 05/12/18(c)

    1,938,665            1,950,297   

Drillships Financing Holding, Inc.

   

Tranche B-1 Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 03/31/21(c)

    3,275,126            2,688,321   

Drillships Ocean Ventures, Inc.

   

Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 07/25/21(c)

    311,018            265,920   

EMG Utica, LLC

   

Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 03/27/20(c)

    1,971,926            1,930,023   

HGIM Corp.

   

Term Loan A, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 06/18/18(c)

    4,505,592            4,071,929   

Southcross Energy Partners, L.P.

   

Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 08/04/21(c)

    340,401            338,486   

Southcross Holdings Borrower, L.P.

   

Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 08/04/21(c)

    862,964            841,032   

Sprint Industrial Holdings, LLC

   

First Lien Term Loan, (LIBOR + 5.75%, 1.25% Floor), 7.00%, 05/14/19(b)(c)

    2,619,470            2,344,426   
   

Principal
 Amount ($) 

 

   

 Value ($) 

 

 

ENERGY: OIL & GAS (continued)

   

 

W3 Co.

   

First Lien Term Loan, (LIBOR + 4.50%, 1.25% Floor), 5.75%, 03/13/20(c)

    917,806            835,203   
   

 

 

 
              23,027,456   
   

 

 

 

ENVIRONMENTAL INDUSTRIES - 1.0%

  

 

Emerald 2, Limited (United Kingdom)

   

Facility B-1 Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 05/14/21(c)(f)

    2,901,337            2,883,203   
   

 

 

 

FOREST PRODUCTS & PAPER - 1.4%

  

 

Caraustar Industries, Inc.

   

Incremental Term Loan, (LIBOR + 6.75%, 1.25% Floor), 8.00%, 05/01/19(c)

    1,641,750            1,649,959   

Term Loan, (LIBOR + 6.75%, 1.25% Floor), 8.00%, 05/01/19(c)

    2,286,475            2,296,467   
   

 

 

 
      3,946,426   
   

 

 

 

HEALTHCARE & PHARMACEUTICALS - 14.9%

  

 

ABB/Con-Cise Optical Group, LLC

   

Term Loan B-1, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 02/06/19(c)

    1,506,328            1,502,561   

Alere Inc.

   

Term Loan B, (LIBOR + 3.25%, 1.00% Floor), 4.25%,
06/18/22(c)(d)

    1,571,429            1,574,729   

Alvogen Pharma US, Inc.

   

First Lien Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 04/01/22(c)

    1,399,070            1,406,066   

Amneal Pharmaceuticals, LLC

   

Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 11/01/19(c)

    2,668,056            2,677,581   

Ardent Medical Services, Inc.

   

First Lien Term Loan, (LIBOR + 5.25%, 1.50% Floor), 6.75%, 07/02/18(c)

    2,883,954            2,893,557   

ATI Holdings, Inc.

   

Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 12/20/19(c)

    1,505,755            1,513,283   

Concentra, Inc.

   

First Lien Tranche B Term Loan, (LIBOR + 3.00%, 1.00% Floor), 4.00%, 06/01/22(c)

    1,147,826            1,147,826   

Concordia Healthcare Corp. (Canada)

   

Initial Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%,
04/21/22(c)(f)

    500,000            503,072   

Endo Luxembourg Finance I Company S.a.r.l.

   

First Lien Term Loan B, (LIBOR + 3.00%, 0.75% Floor), 3.75%, 06/24/22(c)(d)

    3,371,758            3,383,627   
 

 

8  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments  (continued)

June 30, 2015  (unaudited)

 

 

   

Principal
 Amount ($) 

 

   

 Value ($) 

 

 

Senior Loans(a) (continued)

  

 

HEALTHCARE & PHARMACEUTICALS (continued)

  

 

InVentiv Health, Inc.

   

Term Loan B-3, (LIBOR + 6.25%, 1.50% Floor), 7.75%, 05/15/18(c)

    723,864            721,754   

Opal Acquisition, Inc.

   

Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 11/27/20(c)

    5,894,267            5,811,393   

Premier Dental Services, Inc.

   

New Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%,
11/01/18(b)(c)

    5,176,253            4,723,331   

Smile Brands Group, Inc.

   

Term Loan B, (LIBOR + 6.25%, 1.25% Floor), 7.50%,
08/16/19(b)(c)

    3,621,175            2,498,611   

Sterigenics-Nordion Holdings, LLC

   

Initial Term Loan, (LIBOR + 3.25%, 1.00% Floor), 4.25%, 05/15/22(c)

    1,080,882            1,080,882   

Steward Health Care System, LLC

   

Term Loan, (LIBOR + 5.50%, 1.25% Floor), 6.75%,
04/10/20(b)(c)

    2,762,826            2,728,290   

Surgery Center Holdings, Inc.

   

First Lien Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 11/03/20(c)

    2,136,209            2,140,215   

Second Lien Initial Term Loan, (LIBOR + 7.50%, 1.00% Floor), 8.50%, 11/03/21(c)

    3,000,000            3,000,000   

U.S. Renal Care, Inc.

   

Second Lien Term Loan, (LIBOR + 9.00%, 1.25% Floor), 10.25%, 01/03/20(b)(c)

    1,504,000            1,519,980   

Valeant Pharmaceuticals International, Inc. (Canada)

   

Tranche B Term Loan Series F-1, (LIBOR + 3.25%, 0.75% Floor), 4.00%, 04/01/22(c)(f)

    1,498,972            1,498,890   

Walgreens Infusion Services

   

First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 04/07/22(c)

    500,000            503,960   
   

 

 

 
              42,829,608   
   

 

 

 

HIGH TECH INDUSTRIES - 13.3%

   

 

Commscope, Inc.

   

Term Loan B, (LIBOR + 3.00%, 0.75% Floor), 05/27/22(c)(d)

    1,344,156            1,344,721   

Deltek, Inc.

   

First Lien Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 12/19/22(c)(d)

    2,734,800            2,741,651   

Second Lien Term Loan, (LIBOR + 8.50%, 1.00% Floor), 9.50%, 06/23/23(c)

    1,124,528            1,132,962   
   

Principal
 Amount ($) 

 

   

 Value ($) 

 

 

HIGH TECH INDUSTRIES (continued)

   

 

Flexera Software, LLC

   

Second Lien Term Loan, (LIBOR + 7.00%, 1.00% Floor), 8.00%,
04/02/21(c)

    1,428,292            1,423,829   

Freescale Semiconductor, Inc.

   

Tranche B-5 Term Loan, (LIBOR + 3.75%, 1.25% Floor), 5.00%,
01/15/21(c)

    3,900,723            3,920,227   

GTCR Valor Companies, Inc.

   

First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%,
05/30/21(c)

    2,372,104            2,373,586   

Italic Merger Sub (Informatica)

   

Term Loan B, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 06/03/22(c)(d)

    4,089,928            4,088,660   

Kronos, Inc.

   

First Lien Incremental Term Loan, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 10/30/19(c)

    778,458            780,015   

Landslide Holdings, Inc. (Crimson Acquisition Corp.)

   

Second Lien Term Loan, (LIBOR + 7.25%, 1.00% Floor), 8.25%,
02/25/21(b)(c)

    563,000            546,110   

Lanyon Solutions, Inc. (Lanyon, Inc.)

   

First Lien Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 11/13/20(c)

    1,450,607            1,436,101   

MSC.Software Corp.

   

First Lien Initial Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%,
05/29/20(c)

    1,772,100            1,769,885   

Riverbed Technology, Inc.

   

Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 04/24/22(c)

    1,413,219            1,429,648   

RP Crown Parent, LLC

   

First Lien New Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%,
12/21/18(c)

    3,090,829            2,980,734   

Second Lien Term Loan, (LIBOR + 10.00%, 1.25% Floor), 11.25%, 12/21/19(c)

    1,000,000            924,065   

SS&C Technologies Holdings Europe SARL (Luxembourg)

   

Term Loan B-2, (LIBOR + 3.25%, 0.75% Floor), 4.00%, 06/29/22(c)(d)(f)

    532,827            533,829   

SS&C Technologies, Inc./ Sunshine Acquisition II, Inc.

   

Term Loan B-1, (LIBOR + 3.25%, 0.75% Floor), 4.00%, 06/29/22(c)(d)

    2,365,231            2,369,678   

STG-Fairway Acquisitions, Inc.

   

First Lien Term Loan, (LIBOR + 5.25%, 1.00% Floor), 6.25%, 06/30/22(c)(d)

    2,992,443            2,966,259   
 

 

See accompanying Notes to Financial Statements.  |  9


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments  (continued)

June 30, 2015  (unaudited)

 

 

   

Principal
 Amount ($) 

 

   

 Value ($) 

 

 

Senior Loans(a) (continued)

  

 

HIGH TECH INDUSTRIES (continued)

  

 

 

TIBCO Software, Inc.

   

Term Loan, (LIBOR + 5.50%, 1.00% Floor), 6.50%, 12/04/20(c)

    1,995,000            1,997,494   

Vision Solutions, Inc.

   

First Lien Term Loan, (LIBOR + 4.50%, 1.50% Floor), 6.00%, 07/23/16(b)(c)

    3,378,562            3,378,562   
   

 

 

 
              38,138,016   
   

 

 

 

HOTEL, GAMING & LEISURE - 8.8%

   

 

CDS U.S. Intermediate Holdings, Inc.

   

Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%,
06/24/22(c)(d)

    590,426            591,164   

Centaur Acquisition, LLC

   

Second Lien Term Loan, (LIBOR + 7.50%, 1.25% Floor), 8.75%, 02/20/20(c)

    826,000            836,668   

Delta 2 (Lux) S.a.r.l. (Luxembourg)

   

Facility B-3 (USD) Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 07/30/21(c)(f)

    4,605,263            4,585,115   

Diamond Resorts Corp.

   

Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 05/09/21(c)

    842,616            845,254   

Equinox Holdings, Inc.

   

First Lien New Initial Term Loan, (LIBOR + 3.75%, 1.25% Floor), 5.00%, 01/31/20(b)(c)

    2,977,988            2,998,462   

Global Cash Access, Inc.

   

Term Loan B, (LIBOR + 5.25%, 1.00% Floor), 6.25%, 12/18/20(c)

    1,433,761            1,447,202   

Intertain Group Limited, The (Intertain Group Finance LLC, The) (Canada)

   

Initial Term Loan B, (LIBOR + 6.50%, 1.00% Floor), 7.50%, 04/08/22(b)(c)(f)

    839,161            839,161   

Life Time Fitness, Inc.

   

Closing Date Term Loan, (LIBOR + 3.25%, 1.00% Floor), 4.25%, 06/10/22(c)

    3,130,435            3,112,044   

Peppermill Casinos, Inc.

   

Term Loan B, (LIBOR + 6.00%, 1.25% Floor), 7.25%,
11/09/18(b)(c)

    1,949,789            1,958,320   

Planet Fitness Holdings, LLC

   

Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 03/31/21(c)

    3,957,055            3,959,528   

Scientific Games International, Inc.

   

Initial Term Loan B-2, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 10/01/21(c)

    3,533,738            3,536,406   

Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%,
10/18/20(c)(d)

    498,734            499,388   
   

 

 

 
      25,208,712   
   

 

 

 
   

Principal
 Amount ($) 

 

   

 Value ($) 

 

 

MEDIA: ADVERTISING, PRINTING & PUBLISHING - 4.4%

  

 

ALM Media, LLC

   

First Lien Term Loan B, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 07/31/20(b)(c)

    3,921,240            3,842,815   

F&W Media, Inc.

   

Initial Term Loan, (LIBOR + 6.50%, 1.25% Floor), 7.75%, 06/30/19(c)

    3,798,350            3,750,871   

Information Resources, Inc.

   

Term Loan, (LIBOR + 3.75%, 1.00% Floor), 3.75%, 09/30/20(c)

    1,979,849            1,993,054   

The Reader’s Digest Association, Inc.

   

Term Loan, (LIBOR + 11.00%, 1.50% Floor), 12.50%,
09/30/15(b)(c)

    3,004,805            2,974,757   
   

 

 

 
              12,561,497   
   

 

 

 

MEDIA: BROADCASTING & SUBSCRIPTION - 10.1%

  

 

Emmis Operating Co.

   

Term Loan, (LIBOR + 6.00%, 1.00% Floor), 7.00%,
06/10/21(b)(c)

    1,995,000            1,915,200   

Granite Broadcasting Corp.

   

First Lien Tranche B Term Loan, (LIBOR + 5.50%, 1.25% Floor), 6.75%, 05/23/18(b)(c)

    1,269,955            1,269,167   

Hargray Communications Group, Inc. (HCP Acquisition, LLC)

   

Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 06/26/19(c)

    4,205,263            4,233,523   

Hemisphere Media Holdings, LLC (Intermedia Espanol, Inc.)

   

New Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 07/30/20(c)

    2,544,752            2,547,932   

Numericable U.S., LLC

   

Dollar Denominated Tranche B-1

   

Term Loan, (LIBOR + 3.75%, 0.75% Floor), 4.50%, 05/21/20(c)

    1,589,750            1,595,711   

Dollar Denominated Tranche B-2

   

Term Loan, (LIBOR + 3.75%, 0.75% Floor), 4.50%, 05/21/20(c)

    1,375,350            1,380,508   

Radio One, Inc.

   

First Lien Term Loan, (LIBOR + 4.50%, 0.00% Floor), 4.78%, 12/31/18(b)(c)

    2,443,991            2,493,641   

SESAC Holdco II, LLC

   

First Lien Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 02/07/19(c)

    2,000,760            2,005,762   

Telecommunications Management, LLC

   

First Lien Initial Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 04/30/20(c)

    1,126,889            1,124,776   
 

 

 

10  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments  (continued)

June 30, 2015 (unaudited)

 

 

    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

Senior Loans(a) (continued)

     

MEDIA: BROADCASTING & SUBSCRIPTION (continued)

  

Second Lien Initial Term Loan, (LIBOR + 8.00%, 1.00% Floor), 9.00%, 10/30/20(b)(c)

     710,475             699,817   

WideOpenWest Finance, LLC

     

Replacement Term Loan B, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 04/01/19(c)

     5,581,970             5,581,580   

William Morris Endeavor Entertainment, LLC (IMG Worldwide Holdings, LLC)

     

First Lien Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 05/06/21(c)

     3,998,878             3,999,378   
     

 

 

 
        28,846,995   
     

 

 

 

MEDIA: DIVERSIFIED & PRODUCTION - 1.7%

  

Tech Finance & Co., S.C.A. (Luxembourg)

     

U.S. Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 07/11/20(c)(f)

     4,739,222             4,758,984   
     

 

 

 

METALS & MINING - 0.8%

  

Murray Energy Corp.

     

Term Loan B-1, (LIBOR + 6.00%, 1.00% Floor), 7.00%, 04/17/17(c)

     1,273,632             1,268,856   

Oxbow Carbon, LLC (Oxbow Calcining, LLC)

     

Second Lien Initial Term Loan, (LIBOR + 7.00%, 1.00% Floor), 8.00%, 01/17/20(b)(c)

     1,025,641             971,795   
     

 

 

 
              2,240,651   
     

 

 

 

RETAIL - 9.5%

  

Academy Ltd.

     

Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 06/16/22(c)(d)

     3,000,000             3,003,750   

At Home Holding III, Inc.

     

Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 06/03/22(c)

     1,565,217             1,565,217   

Bass Pro Group, LLC

     

2015 New Term Loan, (LIBOR + 3.25%, 0.75% Floor), 4.00%, 06/05/20(c)

     2,818,334             2,822,617   

Charming Charlie, LLC

     

Initial Term Loan, (LIBOR + 8.00%, 1.00% Floor), 9.00%, 12/24/19(c)

     5,282,042             5,275,439   

David’s Bridal, Inc.

     

Initial Term Loan, (LIBOR + 3.75%, 1.25% Floor), 5.00%, 10/11/19(c)

     2,021,355             1,943,027   

HMK Intermediate Holdings, LLC

     

Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 03/30/19(b)(c)

     1,098,972             1,097,599   
    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

RETAIL (continued)

  

Mattress Holding Corp.

     

Initial Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 10/20/21(c)

     2,749,873             2,776,216   

PetSmart, Inc.

     

Tranche B-1 Term Loan, (LIBOR + 3.25%, 1.00% Floor), 4.25%, 03/11/22(c)

     5,391,548             5,387,504   

Sears Roebuck Acceptance Corp. (KMART Corp.)

     

Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%,
06/30/18(c)

     2,989,886             2,954,381   

Vince, LLC (Vince Intermediate Holding, LLC)

     

Term Loan B, (LIBOR + 4.75%, 1.00% Floor), 5.75%,
11/27/19(c)

     415,465             415,984   
     

 

 

 
              27,241,734   
     

 

 

 

SERVICES: BUSINESS - 9.8%

  

Brock Holdings III, Inc.

     

First Lien Term Loan, (LIBOR + 4.50%, 1.50% Floor), 6.00%, 03/16/17(c)

     605,395             603,694   

Carecore National, LLC

     

Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%,
03/05/21(c)

     1,405,988             1,413,018   

EIG Investors Corp.

     

Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%,
11/09/19(c)

     3,645,879             3,638,277   

Element Materials Technology Group U.S. Holdings, Inc. (Element Materials Technology Holdings U.K., Ltd.)

     

Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 5.00%,
08/06/21(c)

     644,904             646,519   

Evergreen Skills Lux S.a.r.l.

     

First Lien Initial Term Loan, (LIBOR + 4.75%, 1.00% Floor), 5.75%, 04/28/21(c)

     2,029,687             1,977,676   

Second Lien Initial Term Loan, (LIBOR + 8.25%, 1.00% Floor), 9.25%, 04/28/22(c)

     1,000,000             938,335   

GCA Services Group, Inc.

     

Second Lien Initial Term Loan, (LIBOR + 8.00%, 1.25% Floor), 9.25%, 11/01/20(b)(c)

     834,400             834,400   

Genex Holdings, Inc.

     

First Lien Term Loan B, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 05/28/21(c)(d)

     1,916,885             1,920,882   

IBC Capital I, Limited

     

First Lien Initial Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 09/09/21(c)

     1,995,000             1,955,100   

Infogroup, Inc.

     

Term Loan B, (LIBOR + 6.00%, 1.50% Floor), 7.50%,
05/26/18(c)

     3,480,634             3,358,812   
 

 

See accompanying Notes to Financial Statements.  |  11


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments  (continued)

June 30, 2015 (unaudited)

 

 

    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

Senior Loans(a) (continued)

     

SERVICES: BUSINESS (continued)

  

Onex Carestream Finance, L.P.

     

First Lien 2013 Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 06/07/19(c)

     2,384,766             2,386,078   

Second Lien Term Loan, (LIBOR + 8.50%, 1.00% Floor), 9.50%, 12/07/19(c)

     2,415,389             2,406,331   

Packers Holdings, LLC

     

Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 12/02/21(c)

     497,500             501,231   

SGS Cayman, L.P. (Cayman Islands)

     

Initial Cayman Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 04/23/21(c)(f)

     430,409             433,456   

SNL Financial, LC

     

New Term Loan, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 10/23/18(c)

     943,851             946,508   

Stafford Logistics, Inc. (dba Custom Ecology, Inc.)

     

Term Loan, (LIBOR + 5.50%, 1.25% Floor), 6.75%, 06/26/19(b)(c)

     2,427,875             2,306,481   

Sutherland Global Services, Inc.

     

Initial U.S. Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 04/23/21(c)

     1,849,016             1,862,107   
     

 

 

 
            28,128,905   
     

 

 

 

SERVICES: CONSUMER - 2.6%

  

Laureate Education, Inc.

     

2018 New Series Extended Term Loan, (LIBOR + 3.75%, 1.25% Floor), 5.00%, 06/15/18(c)

     5,188,771             4,857,987   

NVA Holdings, Inc.

     

First Lien Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 08/14/21(c)

     1,736,398             1,741,468   

Second Lien Term Loan, (LIBOR + 7.00%, 1.00% Floor), 8.00%, 08/14/22(b)(c)

     955,026             958,607   
     

 

 

 
        7,558,062   
     

 

 

 

TELECOMMUNICATIONS - 9.4%

  

Altice Financing, S.A. (Luxembourg)

     

Dollar Denominated Tranche Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 02/04/22(c)(f)

     1,022,821             1,030,068   

Avaya, Inc.

     

Replacement Term Loan B-6, (LIBOR + 5.50%, 1.00% Floor), 6.50%, 03/31/18(c)

     558,576             556,948   

Term Loan B-3, (LIBOR + 4.50%, 0.00% Floor), 4.68%, 10/26/17(c)

     1,478,618             1,470,168   
    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

TELECOMMUNICATIONS (continued)

  

CWC Cayman Finance, Limited (Cayman Islands)

     

Secured Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 04/28/17(c)(f)

     1,420,327             1,422,102   

Unsecured Term Loan, (LIBOR + 5.50%, 1.00% Floor), 6.50%, 04/28/17(b)(c)(f)

     1,470,588             1,477,941   

Global Tel*Link Corp.

     

First Lien Term Loan, (LIBOR + 3.75%, 1.25% Floor), 5.00%, 05/23/20(b)(c)

     5,695,422             5,581,513   

Grande Communications Networks, LLC

     

Initial Term Loan, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 05/29/20(c)

     4,016,260             4,001,219   

LTS Buyer, LLC (Sidera Networks, Inc.)

     

Second Lien Term Loan, (LIBOR + 6.75%, 1.25% Floor), 8.00%, 04/12/21(c)

     456,665             455,902   

Ntelos, Inc.

     

Advanced Term Loan B, (LIBOR + 4.75%, 1.00% Floor), 5.75%, 11/09/19(b)(c)

     4,008,381             3,547,417   

Securus Technologies Holdings, Inc.

     

First Lien Initial Term Loan, (LIBOR + 3.50%, 1.25% Floor), 4.75%, 04/30/20(c)

     2,543,723             2,482,241   

Second Lien Initial Term Loan, (LIBOR + 7.75%, 1.25% Floor), 9.00%, 04/30/21(c)

     2,800,000             2,692,200   

The TelX Group, Inc.

     

Second Lien Initial Term Loan, (LIBOR + 6.50%, 1.00% Floor), 7.50%, 04/09/21(c)

     600,000             603,000   

U.S. TelePacific Corp.

     

Advance Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 11/25/20(c)

     1,783,599             1,785,829   
     

 

 

 
            27,106,548   
     

 

 

 

TRANSPORTATION: CARGO - 1.7%

  

Carrix, Inc.

     

Term Loan, (LIBOR + 3.50%, 1.00% Floor), 4.50%,
01/07/19(c)

     4,012,764             3,766,982   

OSG Bulk Ships, Inc.

     

Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 08/05/19(c)

     1,044,450             1,047,719   
     

 

 

 
        4,814,701   
     

 

 

 

TRANSPORTATION: CONSUMER - 2.0%

  

Blue Bird Body Co.

     

Facility Term Loan, (LIBOR + 5.50%, 1.00% Floor), 6.50%, 06/26/20(b)(c)

     1,440,993             1,444,595   
 

 

12  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments  (continued)

June 30, 2015 (unaudited)

 

 

    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

Senior Loans(a) (continued)

  

TRANSPORTATION: CONSUMER (continued)

  

Landmark Aviation FBO Canada, Inc. (Canada)

     

Canadian Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 10/25/19(c)(f)

     93,190             92,724   

LM U.S. Member LLC (LM U.S. Corp Acquisition Inc.)

     

First Lien Initial Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 10/25/19(c)

     2,348,030             2,336,290   

Travel Leaders Group, LLC

     

Term Loan B, (LIBOR + 6.00%, 1.00% Floor), 7.00%,
12/07/20(c)

     1,836,024             1,861,269   
     

 

 

 
        5,734,878   
     

 

 

 

UTILITIES: ELECTRIC - 3.1%

  

Granite Acquisition, Inc.

     

First Lien Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 12/17/21(c)

     2,402,360             2,432,366   

First Lien Term Loan C, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 12/17/21(c)

     106,235             107,562   

Second Lien Term Loan B, (LIBOR + 7.25%, 1.00% Floor), 8.25%, 12/19/22(c)

     1,309,090             1,339,638   

Panda Sherman Power, LLC Construction Term Loan Advances, (LIBOR + 7.50%, 1.50% Floor), 9.00%,
09/14/18(b)(c)

     1,191,374             1,180,950   

Pike Corp.

     

First Lien Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 12/22/21(c)

     2,776,574             2,790,457   

Second Lien Initial Term Loan, (LIBOR + 8.50%, 1.00% Floor), 9.50%, 06/22/22(c)

     1,000,000             993,335   
     

 

 

 
        8,844,308   
     

 

 

 

Total Senior Loans
(Cost $396,300,233)

            392,292,830   
     

 

 

 

Corporate Notes and Bonds - 8.2%(e)

  

BANKING, FINANCE, INSURANCE & REAL ESTATE - 4.0%

  

First Data Corp.

     

12.63%, 01/15/21

     10,000,000             11,575,000   
     

 

 

 

CHEMICALS, PLASTICS & RUBBER - 0.1%

  

Magnetation, LLC / Mag Finance Corp.

     

11.00%, 05/15/18(b)(h)(i)

     753,000             263,866   
     

 

 

 
    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

HEALTHCARE & PHARMACEUTICALS - 1.2%

  

Valeant Pharmaceuticals International, Inc. (Canada)

     

7.50%, 07/15/21(f)(i)

     3,200,000             3,452,000   
     

 

 

 

MEDIA: ADVERTISING, PRINTING & PUBLISHING - 0.6%

  

Acosta, Inc.

     

7.75%, 10/01/22(i)

     1,600,000             1,616,000   
     

 

 

 

MEDIA: BROADCASTING & SUBSCRIPTION - 1.3%

  

Columbus International, Inc. (Barbados)

     

7.38%, 03/30/21(f)(i)

     1,285,000             1,386,194   

Intelsat Jackson Holdings S.A. (Luxembourg)

     

7.25%, 10/15/20(f)

     1,000,000             992,500   

Radio One, Inc.

     

9.25%, 02/15/20(i)

     1,484,000             1,357,860   
     

 

 

 
        3,736,554   
     

 

 

 

MEDIA: DIVERSIFIED & PRODUCTION - 1.0%

  

SiTV, Inc.

     

10.38%, 07/01/19(i)

     3,420,000             2,838,600   
     

 

 

 

Total Corporate Notes and Bonds
(Cost $23,313,939)

        23,482,020   
     

 

 

 
     
     
    

 

Share       
 Quantity      

 

    

 Value ($) 

 

 

Preferred Stock - 1.4%

     

BANKING, FINANCE, INSURANCE & REAL ESTATE - 1.4%

  

Watford Holdings, Ltd. (Bermuda)

     

8.50% (b)(f)

     160,000             3,904,160   
     

 

 

 

Total Preferred Stock
(Cost $3,920,000)

        3,904,160   
     

 

 

 

Warrants - 0.0%

     

BANKING, FINANCE, INSURANCE & REAL ESTATE - 0.0%

  

Medical Card System, Inc.

     

07/26/18(b)(j)

     54,913               
     

 

 

 

Total Warrants
(Cost $ — )

          
     

 

 

 

Total Investments-146.3%

        419,679,010   

(Cost of $423,534,172) (k)(l)

     

Other Assets & Liabilities,
Net-5.7%

        16,383,168   

Loan Outstanding-(52.0)%

        (149,177,541
     

 

 

 

Net Assets (Applicable to Common Shares)-100.0%

            286,884,637   
     

 

 

 
 

 

See accompanying Notes to Financial Statements.  |  13


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments  (continued)

June 30, 2015 (unaudited)

 

 

(a)  “Senior Loans” are senior, secured loans made to companies whose debt is rated below investment grade and investments with similar characteristics. Senior Loans typically hold a first lien priority and pay interest at rates that are determined periodically on the basis of a floating base lending rate plus a spread. Unless otherwise identified, all Senior Loans carry a variable rate of interest. These base lending rates are primarily the London Interbank Offered Rate (“LIBOR”) and secondarily the prime rate offered by one or more major U.S. banks and the certificate of deposit rate used by commercial lenders. The rates shown represent the weighted average rate at June 30, 2015. Senior Loans are generally not registered under the Securities Act of 1933 (the “1933 Act”) and often contain certain restrictions on resale and cannot be sold publicly. Senior Loans often require prepayments from excess cash flow or permit the borrower to repay at its election. The degree to which borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with accuracy. As a result, the actual maturity may be substantially less than the stated maturity shown.

Senior Loan assets may have additional unfunded loan commitments. As of June 30, 2015, the Fund had unfunded loan commitments, which could be extended at the option of the borrower, pursuant to the following loan agreements:

 

Borrower    Unfunded Loan
Commitments
 

 

 

Charger OpCo B.V. (Oak Tea, Inc.)*

     $ 3,740,601     

LTS Buyer, LLC (Sidera Networks, Inc.)

       1,912,192     
  

 

 

 

Total Unfunded Loan Commitments

     $ 5,652,793     
  

 

 

 
 

 

* The loan commitment for Charger OpCo B.V. (Oak Tea, Inc.) was subsequently funded on July 2, 2015.

 

(b)  Fair Value Level 3 security. All remaining securities are categorized as Level 2.
(c)  The interest rate on this Senior Loan is subject to a base rate plus 1 month or 3 month LIBOR, which at June 30, 2015 was 0.19% and 0.28%, respectively. As the interest rate is subject to a minimum LIBOR floor which was greater than the 1 month or 3 month LIBOR rate at June 30, 2015, the prevailing rate in effect at June 30, 2015 was the base rate plus the LIBOR floor, except as indicated.
(d)  All or a portion of this Senior Loan position has not settled. Full contract rates do not take effect until settlement date, therefore, are subject to change.
(e)  Fixed rate asset.
(f)  Foreign issuer traded in U.S. dollars.
(g)  Represents a payment-in-kind (“PIK”) security which may pay interest in additional principal amount.
(h)  The issuer is in default of its payment obligation as of May 5, 2015, as such, income is no longer being accrued.
(i)  Securities exempt from registration pursuant to Rule 144A under the 1933 Act. These securities may only be resold in transactions exempt from registration to qualified institutional buyers. At June 30, 2015, these securities amounted to $10,914,520, or 3.8% of net assets.
(j)  Non income-producing asset.
(k)  The Fund has granted a security interest in substantially all of its assets in the event of default under the credit facility (Note 8).
(l)  The aggregate cost of securities for federal income tax purposes was $423,548,842. Cost for U.S. federal income tax purposes differs from book basis primarily due to the deferral of losses from wash sales. Unrealized appreciation and depreciation on investments are as follows:

 

Gross unrealized appreciation

    $      5,092,702   

Gross unrealized depreciation

     (8,962,534)   
  

 

 

 

Net unrealized depreciation

    $     (3,869,832)   
  

 

 

 
 

 

14  |  See accompanying Notes to Financial Statements.


Apollo Tactical Income Fund Inc.

Schedule of Investments

June 30, 2015 (unaudited)

 

    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

 

Senior Loans - 98.4%(a)

     

AEROSPACE & DEFENSE - 7.8%

  

  

Alion Science and Technology Corp.

     

Tranche A Term Loan, (LIBOR + 7.00%, 1.00% Floor), 8.00%, 08/17/18(b)(c)

     1,862,744             1,825,490   

Tranche B Term Loan, (LIBOR + 10.00%, 1.00% Floor), 11.00%, 08/16/19(b)(c)

     1,823,684             1,763,247   

Camp International Holding Co.

     

2013 First Lien Replacement Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 05/31/19(c)

     1,118,638             1,122,368   

2013 Second Lien Replacement Term Loan, (LIBOR + 7.25%, 1.00% Floor), 8.25%, 11/29/19(c)

     1,350,000             1,356,750   

DAE Aviation Holdings, Inc.

     

First Lien Term Loan, (LIBOR +

     

4.25%, 1.00% Floor), 5.25%, 06/24/22(c)(d)

     2,780,000             2,780,000   

Photonis Technologies SAS

     

First Lien Initial Dollar Term Loan, (LIBOR + 7.50%, 1.00% Floor), 8.50%, 09/18/19(c)

     2,457,759             2,359,449   

SRA International, Inc.

     

Term Loan, (LIBOR + 5.25%, 1.25% Floor), 6.50%, 07/20/18(c)

     2,832,952             2,844,751   

TASC, Inc.

     

First Lien New Term Loan, (LIBOR + 6.00%, 1.00% Floor), 7.00%, 05/22/20(c)

     497,500             503,099   

First Lien Term Loan, (LIBOR + 6.00%, 1.00% Floor), 7.00%, 05/22/20(c)

     1,420,853             1,436,845   

Second Lien Term Loan, 12.00%, 05/21/21(e)

     2,233,239             2,328,151   

U.S. Joiner Holding Co.

     

Term Loan, (LIBOR + 6.00%, 1.00% Floor), 7.00%, 04/16/20(b)(c)

     1,638,227             1,630,036   

Vencore, Inc.

     

Second Lien Term Loan, (LIBOR + 8.00%, 1.00% Floor), 9.00%, 05/23/20(c)

     606,000             607,012   
     

 

 

 
                20,557,198   
     

 

 

 

AUTOMOTIVE - 0.7%

  

American Tire Distributors, Inc.

     

Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 09/01/21(c)

     1,871,710             1,891,606   
     

 

 

 

BANKING, FINANCE, INSURANCE & REAL ESTATE - 4.9%

  

Asurion, LLC

     

Second Lien Term Loan, (LIBOR + 7.50%, 1.00% Floor), 8.50%, 03/03/21(c)

     4,624,000             4,709,267   
    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

 

BANKING, FINANCE, INSURANCE & REAL ESTATE (continued)

  

Hyperion Insurance Group, Limited (United Kingdom)

     

Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%,
04/29/22(c)(f)

     2,041,549             2,053,033   

Jefferies Finance LLC (JFIN Co-Issuer Corp.)

     

First Lien Term Loan, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 05/14/20(b)(c)

     1,521,739             1,521,739   

Medical Card System, Inc.

     

Term Loan (3.00%, PIK), (LIBOR + 10.00%, 2.00% Floor), 11.24%, 03/17/17(b)(c)(g)

     4,321,701             3,175,499   

MMM Holdings, Inc.

     

MMM Term Loan, (LIBOR + 8.25%, 1.50% Floor), 9.75%,
12/12/17(b)(c)

     1,138,536             908,928   

MSO of Puerto Rico, Inc.

     

MSO Term Loan, (LIBOR + 8.25%, 1.50% Floor), 9.75%,
12/12/17(b)(c)

     827,710             660,786   
     

 

 

 
        13,029,252   
     

 

 

 

BEVERAGE, FOOD & TOBACCO - 1.0%

  

PFS Holding Corp.

     

Second Lien Term Loan, (LIBOR + 7.25%, 1.00% Floor), 8.25%, 01/31/22(c)

     499,800             373,600   

Winebow Holdings, Inc. (The Vintner Group, Inc.)

     

Second Lien Term Loan, (LIBOR + 7.50%, 1.00% Floor), 8.50%, 01/02/22(b)(c)

     2,505,795             2,418,092   
     

 

 

 
                2,791,692   
     

 

 

 

CAPITAL EQUIPMENT - 0.9%

     

Zebra Technologies Corp.

     

Initial Term Loan, (LIBOR + 4.00%, 0.75% Floor), 4.75%, 10/27/21(c)

     2,344,425             2,373,742   
     

 

 

 

CHEMICALS, PLASTICS & RUBBER - 2.8%

  

Chemstralia Pty, Ltd. (Chemstralia Finco, LLC) (Australia)

     

Initial Term Loan, (LIBOR + 6.25%, 1.00% Floor), 7.25%,
02/28/22(b)(c)(f)

     2,267,045             2,278,380   

Magnetation, LLC / Mag Finance Corp.

     

Term Loan (3.00% PIK), 12.00%, 12/07/15(b)(e)

     567,841             549,557   

Polymer Group, Inc.

     

Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 12/19/19(c)

     770,531             774,704   

U.S. Farathane, LLC

     

Initial Term Loan, (LIBOR + 5.75%, 1.00% Floor), 6.75%, 12/23/21(c)

     952,961             962,491   
 

 

See accompanying Notes to Financial Statements.  |  15


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

June 30, 2015 (unaudited)

 

 

    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

Senior Loans(a) (continued)

     

CHEMICALS, PLASTICS & RUBBER (continued)

  

Univar Inc.

     

Term Loan, (LIBOR + 3.25%, 1.00% Floor), 4.25%,
06/24/22(c)(d)

     2,776,436             2,776,880   
     

 

 

 
        7,342,012   
     

 

 

 

CONSUMER GOODS: NON-DURABLE - 4.4%

  

ABG Intermediate Holdings 2, LLC

  

  

First Lien Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 05/27/21(c)

     3,505,515             3,506,970   

BRG Sports, Inc.

     

First Lien Term Loan, (LIBOR + 5.50%, 1.00% Floor), 6.50%, 04/15/21(c)

     1,835,486             1,844,664   

Fender Musical Instruments Corp.

  

  

Initial Term Loan, (LIBOR + 4.50%, 1.25% Floor), 5.75%, 04/03/19(c)

     327,500             328,592   

Nine West Holdings, Inc.

     

Unsecured Initial Term Loan, (LIBOR + 5.25%, 1.00% Floor), 6.25%, 01/08/20(c)

     2,109,635             1,506,659   

Polyconcept Investments, B.V.

     

Term Loan, (LIBOR + 4.75%, 1.25% Floor), 6.00%,
06/28/19(c)

     3,266,734             3,272,859   

The Topps Co., Inc.

     

Term Loan, (LIBOR + 6.00%, 1.25% Floor), 7.25%,
10/02/18(c)

     1,104,789             1,088,217   
     

 

 

 
              11,547,961   
     

 

 

 

CONTAINERS, PACKAGING & GLASS - 3.0%

  

BWay Intermediate Co., Inc.

     

Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 08/14/20(c)

     1,529,999             1,534,459   

Hoover Group

     

First Lien Term Loan, (LIBOR + 6.75%, 1.00% Floor), 7.75%, 01/28/21(b)(c)

     773,308             723,043   

NVLX Acquisition, LLC

     

First Lien Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 12/05/21(c)

     2,048,489             2,068,974   

Pelican Products, Inc.

     

First Lien Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 04/10/20(c)

     2,758,219             2,758,232   

Tekni-Plex, Inc.

     

First Lien Tranche B-1 Term Loan, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 06/01/22(c)

     772,028             773,669   
     

 

 

 
        7,858,377   
     

 

 

 
    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

ENERGY: OIL & GAS - 6.4%

     

American Energy-Marcellus, LLC

     

First Lien Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 08/04/20(c)

     1,561,946             1,221,254   

Azure Midstream Energy, LLC

     

Term Loan, (LIBOR + 6.50%, 1.00% Floor), 7.50%,
11/15/18(c)

     651,825             650,195   

BlackBrush Oil & Gas, L.P.

     

Closing Date Second Lien Term Loan, (LIBOR + 6.50%, 1.00% Floor), 7.50%, 07/30/21(c)

     3,090,344             2,870,157   

Chief Exploration & Development, LLC

     

Second Lien Term Loan, (LIBOR + 6.50%, 1.00% Floor), 7.50%, 05/16/21(c)

     2,926,177             2,771,089   

Drillships Financing Holding, Inc.

     

Tranche B-1 Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%,
03/31/21(c)

     3,275,126             2,688,321   

Drillships Ocean Ventures, Inc.

     

Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 07/25/21(c)

     311,018             265,920   

EMG Utica, LLC

     

Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%,
03/27/20(c)

     1,037,624             1,015,575   

HGIM Corp.

     

Term Loan A, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 06/18/18(c)

     671,025             606,439   

Southcross Energy Partners, L.P.

     

Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 08/04/21(c)

     340,401             338,486   

Southcross Holdings Borrower, L.P.

     

Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 08/04/21(c)

     862,964             841,032   

Sprint Industrial Holdings, LLC

     

First Lien Term Loan, (LIBOR + 5.75%, 1.25% Floor), 7.00%, 05/14/19(b)(c)

     2,619,470             2,344,426   

Targa Resources Corp.

     

Term Loan, (LIBOR + 4.75%, 1.00% Floor), 5.75%,
02/27/22(c)

     371,251             375,313   

W3 Co.

     

First Lien Term Loan, (LIBOR + 4.50%, 1.25% Floor), 5.75%, 03/13/20(c)

     1,101,222             1,002,112   
     

 

 

 
                16,990,319   
     

 

 

 

ENVIRONMENTAL INDUSTRIES - 1.1%

  

Emerald 2, Limited (United Kingdom)

     

Facility B-1 Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 05/14/21(c)(f)

     2,901,337             2,883,203   
     

 

 

 
 

 

16  |  See accompanying Notes to Financial Statements.


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

June 30, 2015 (unaudited)

 

 

    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

Senior Loans(a) (continued)

     

FOREST PRODUCTS & PAPER - 1.5%

  

Caraustar Industries, Inc.

     

Incremental Term Loan, (LIBOR + 6.75%, 1.25% Floor), 8.00%, 05/01/19(c)

     1,194,000             1,199,970   

Term Loan, (LIBOR + 6.75%, 1.25% Floor), 8.00%,
05/01/19(c)

     2,743,286             2,755,274   
     

 

 

 
        3,955,244   
     

 

 

 

HEALTHCARE & PHARMACEUTICALS - 8.3%

  

Alvogen Pharma US, Inc.

     

First Lien Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 04/01/22(c)

     1,399,070             1,406,066   

Ardent Medical Services, Inc.

     

First Lien Term Loan, (LIBOR + 5.25%, 1.50% Floor), 6.75%, 07/02/18(c)

     806,121             808,805   

Concordia Healthcare Corp. (Canada)

     

Initial Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 04/21/22(c)(f)

     500,000             503,072   

Opal Acquisition, Inc.

     

Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 5.00%,
11/27/20(c)

     4,479,389             4,416,409   

Premier Dental Services, Inc.

     

New Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 11/01/18(b)(c)

     3,682,213             3,360,019   

Smile Brands Group, Inc.

     

Term Loan B, (LIBOR + 6.25%, 1.25% Floor), 7.50%, 08/16/19(b)(c)

     3,621,175             2,498,611   

Steward Health Care System, LLC

     

Term Loan, (LIBOR + 5.50%, 1.25% Floor), 6.75%,
04/10/20(b)(c)

     1,276,431             1,260,476   

Surgery Center Holdings, Inc.

     

First Lien Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 11/03/20(c)

     1,652,639             1,655,738   

Second Lien Initial Term Loan, (LIBOR + 7.50%, 1.00% Floor), 8.50%, 11/03/21(c)

     3,500,000             3,500,000   

U.S. Renal Care, Inc.

     

Incremental Tranche B-1 Second Lien Term Loan, (LIBOR + 7.50%, 1.00% Floor), 8.50%, 01/03/20(b)(c)

     1,212,000             1,224,878   

Second Lien Term Loan, (LIBOR + 9.00%, 1.25% Floor), 10.25%, 01/03/20(b)(c)

     788,000             796,372   

Walgreens Infusion Services

     

First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 04/07/22(c)

     500,000             503,960   
     

 

 

 
              21,934,406   
     

 

 

 
    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

HIGH TECH INDUSTRIES - 10.5%

  

Deltek, Inc.

     

First Lien Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 12/19/22(c)(d)

     1,893,440             1,898,183   

Second Lien Term Loan, (LIBOR + 8.50%, 1.00% Floor), 9.50%, 06/23/23(c)

     1,124,528             1,132,962   

Flexera Software, LLC

     

Second Lien Term Loan, (LIBOR + 7.00%, 1.00% Floor), 8.00%, 04/02/21(c)

     1,428,292             1,423,829   

GTCR Valor Companies, Inc.

     

First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 05/30/21(c)

     2,372,104             2,373,586   

Italic Merger Sub (Informatica)

     

Term Loan B, (LIBOR + 3.50%, 1.00% Floor), 4.50%, 06/03/22(c)(d)

     3,118,963             3,117,996   

Landslide Holdings, Inc. (Crimson Acquisition Corp.)

     

Second Lien Term Loan, (LIBOR + 7.25%, 1.00% Floor), 8.25%, 02/25/21(b)(c)

     1,682,000             1,631,540   

Lanyon Solutions, Inc. (Lanyon, Inc.)

     

First Lien Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 11/13/20(c)

     579,769             573,971   

Second Lien Term Loan, (LIBOR + 8.50%, 1.00% Floor), 9.50%, 11/15/21(c)

     2,219,037             2,130,275   

MSC.Software Corp.

     

First Lien Initial Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 05/29/20(c)

     891,990             890,875   

Second Lien Initial Term Loan, (LIBOR + 7.50%, 1.00% Floor), 8.50%, 05/31/21(b)(c)

     2,550,000             2,505,375   

Riverbed Technology, Inc.

     

Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%,
04/24/22(c)

     1,413,219             1,429,648   

RP Crown Parent, LLC

     

First Lien New Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 12/21/18(c)

     3,090,829             2,980,734   

Second Lien Term Loan, (LIBOR + 10.00%, 1.25% Floor), 11.25%, 12/21/19(c)

     1,000,000             924,065   

STG-Fairway Acquisitions, Inc.

     

First Lien Term Loan, (LIBOR + 5.25%, 1.00% Floor),
06/30/22(c)(d)

     2,992,443             2,966,259   

TIBCO Software, Inc.

     

Term Loan, (LIBOR + 5.50%, 1.00% Floor), 6.50%,
12/04/20(c)

     1,995,000             1,997,494   
     

 

 

 
              27,976,792   
     

 

 

 
 

 

See accompanying Notes to Financial Statements.  |  17


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

June 30, 2015 (unaudited)

 

 

    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

Senior Loans(a) (continued)

     

HOTEL, GAMING & LEISURE - 5.2%

  

CDS U.S. Intermediate Holdings, Inc.

     

Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 06/24/22(c)(d)

     590,426             591,164   

Centaur Acquisition, LLC

     

Second Lien Term Loan, (LIBOR + 7.50%, 1.25% Floor), 8.75%, 02/20/20(c)

     3,000,000             3,038,745   

Diamond Resorts Corp.

     

Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 05/09/21(c)

     842,616             845,254   

Global Cash Access, Inc.

     

Term Loan B, (LIBOR + 5.25%, 1.00% Floor), 6.25%, 12/18/20(c)

     1,115,289             1,125,745   

Intertain Group Limited, The (Intertain Group Finance LLC, The) (Canada)

     

Initial Term Loan B, (LIBOR + 6.50%, 1.00% Floor), 7.50%, 04/08/22(b)(c)(f)

     839,161             839,161   

Peppermill Casinos, Inc.

     

Term Loan B, (LIBOR + 6.00%, 1.25% Floor), 7.25%, 11/09/18(b)(c)

     1,954,676             1,963,228   

Planet Fitness Holdings, LLC

     

Term Loan, (LIBOR + 3.75%, 1.00% Floor), 4.75%, 03/31/21(c)

     1,854,966             1,856,124   

Scientific Games International, Inc.

     

Initial Term Loan B-2, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 10/01/21(c)

     3,533,738             3,536,406   
     

 

 

 
        13,795,827   
     

 

 

 

MEDIA: ADVERTISING, PRINTING & PUBLISHING - 2.9%

  

ALM Media, LLC

     

First Lien Term Loan B, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 07/31/20(b)(c)

     3,921,240             3,842,815   

F&W Media, Inc.

     

Initial Term Loan, (LIBOR + 6.50%, 1.25% Floor), 7.75%, 06/30/19(c)

     3,798,350             3,750,871   
     

 

 

 
                7,593,686   
     

 

 

 

MEDIA: BROADCASTING & SUBSCRIPTION - 5.1%

  

Emmis Operating Co.

     

Term Loan, (LIBOR + 6.00%, 1.00% Floor), 7.00%, 06/10/21(b)(c)

     1,995,000             1,915,200   

Granite Broadcasting Corp.

     

First Lien Tranche B Term Loan, (LIBOR + 5.50%, 1.25% Floor), 6.75%, 05/23/18(b)(c)

     575,329             574,973   
    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

MEDIA: BROADCASTING & SUBSCRIPTION (continued)

  

Hemisphere Media Holdings, LLC (Intermedia Espanol, Inc.)

     

New Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 07/30/20(c)

     2,544,752             2,547,932   

Radio One, Inc.

     

First Lien Term Loan, (LIBOR + 4.50%, 0.00% Floor), 4.78%, 12/31/18(b)(c)

     2,443,991             2,493,641   

SESAC Holdco II, LLC

     

First Lien Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 02/07/19(c)

     1,988,225             1,993,196   

Telecommunications Management, LLC

     

Second Lien Initial Term Loan, (LIBOR + 8.00%, 1.00% Floor), 9.00%, 10/30/20(b)(c)

     1,065,712             1,049,726   

William Morris Endeavor Entertainment, LLC (IMG Worldwide Holdings, LLC)

     

First Lien Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 05/06/21(c)

     3,003,339             3,003,714   
     

 

 

 
        13,578,382   
     

 

 

 

MEDIA: DIVERSIFIED & PRODUCTION - 1.5%

  

Tech Finance & Co., S.C.A. (Luxembourg)

     

U.S. Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%,
07/11/20(c)(f)

     4,027,323             4,044,117   
     

 

 

 

METALS & MINING - 1.0%

  

Murray Energy Corp.

     

Term Loan B-1, (LIBOR + 6.00%, 1.00% Floor), 7.00%,
04/17/17(c)

     1,273,632             1,268,856   

Oxbow Carbon, LLC (Oxbow Calcining, LLC)

     

Second Lien Initial Term Loan, (LIBOR + 7.00%, 1.00% Floor), 8.00%, 01/17/20(b)(c)

     1,538,462             1,457,692   
     

 

 

 
                2,726,548   
     

 

 

 

RETAIL - 7.9%

     

Academy Ltd.

     

Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 5.00%,
06/16/22(c)(d)

     3,000,000             3,003,750   

At Home Holding III, Inc.

     

Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%,
06/03/22(c)

     1,565,217             1,565,217   

Bass Pro Group, LLC

     

2015 New Term Loan, (LIBOR + 3.25%, 0.75% Floor), 4.00%, 06/05/20(c)

     2,818,334             2,822,617   

Charming Charlie, LLC

     

Initial Term Loan, (LIBOR + 8.00%, 1.00% Floor), 9.00%, 12/24/19(c)

     1,214,640             1,213,121   
 

 

18  |  See accompanying Notes to Financial Statements.


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

June 30, 2015 (unaudited)

 

 

    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

Senior Loans(a) (continued)

  

RETAIL (continued)

     

David’s Bridal, Inc.

     

Initial Term Loan, (LIBOR + 3.75%, 1.25% Floor), 5.00%, 10/11/19(c)

     2,021,355             1,943,027   

Mattress Holding Corp.

     

Initial Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 10/20/21(c)

     2,749,873             2,776,216   

PetSmart, Inc.

     

Tranche B-1 Term Loan, (LIBOR + 3.25%, 1.00% Floor), 4.25%, 03/11/22(c)

     4,000,000             3,997,000   

Sears Roebuck Acceptance Corp. (KMART Corp.)

     

Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%,
06/30/18(c)

     3,142,449             3,105,133   

Vince, LLC (Vince Intermediate Holding, LLC)

     

Term Loan B, (LIBOR + 4.75%, 1.00% Floor), 5.75%,
11/27/19(c)

     415,465             415,984   
     

 

 

 
              20,842,065   
     

 

 

 

SERVICES: BUSINESS - 8.7%

  

Carecore National, LLC

     

Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%,
03/05/21(c)

     994,962             999,937   

EIG Investors Corp.

     

Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%,
11/09/19(c)

     1,871,063             1,867,162   

Element Materials Technology Group U.S. Holdings, Inc. (Element Materials Technology Holdings U.K., Ltd.)

     

Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 5.00%,
08/06/21(c)

     644,904             646,519   

Evergreen Skills Lux S.a.r.l.

     

First Lien Initial Term Loan, (LIBOR + 4.75%, 1.00% Floor), 5.75%, 04/28/21(c)

     997,487             971,927   

Second Lien Initial Term Loan, (LIBOR + 8.25%, 1.00% Floor), 9.25%, 04/28/22(c)

     1,000,000             938,335   

Genex Holdings, Inc.

     

First Lien Term Loan B, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 05/28/21(c)(d)

     1,916,885             1,920,882   

Infogroup, Inc.

     

Term Loan B, (LIBOR + 6.00%, 1.50% Floor), 7.50%,
05/26/18(c)

     3,359,091             3,241,522   

Onex Carestream Finance, L.P.

     

Second Lien Term Loan, (LIBOR + 8.50%, 1.00% Floor), 9.50%, 12/07/19(c)

     5,448,718             5,428,286   

SGS Cayman, L.P. (Cayman Islands)

     

Initial Cayman Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 04/23/21(c)(f)

     430,409             433,456   
    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

SERVICES: BUSINESS (continued)

  

Stadium Management Corp. (SMG)

     

2014 Second Lien Term Loan, (LIBOR + 8.25%, 1.00% Floor), 9.25%, 02/27/21(b)(c)

     2,490,000             2,502,450   

Stafford Logistics, Inc. (dba Custom Ecology, Inc.)

     

Term Loan, (LIBOR + 5.50%, 1.25% Floor), 6.75%,
06/26/19(b)(c)

     2,427,875             2,306,481   

Sutherland Global Services, Inc.

     

Initial U.S. Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 04/23/21(c)

     1,849,016             1,862,107   
     

 

 

 
        23,119,064   
     

 

 

 

SERVICES: CONSUMER - 1.9%

  

Laureate Education, Inc.

     

2018 New Series Extended Term Loan, (LIBOR + 3.75%, 1.25% Floor), 5.00%, 06/15/18(c)

     4,319,717             4,044,335   

NVA Holdings, Inc.

     

Second Lien Term Loan, (LIBOR + 7.00%, 1.00% Floor), 8.00%, 08/14/22(b)(c)

     955,026             958,607   
     

 

 

 
              5,002,942   
     

 

 

 

TELECOMMUNICATIONS - 6.0%

  

Altice Financing, S.A. (Luxembourg)

     

Dollar Denominated Tranche Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%,
02/04/22(c)(f)

     1,022,821             1,030,068   

CWC Cayman Finance, Limited (Cayman Islands)

     

Secured Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 04/28/17(c)(f)

     1,420,327             1,422,102   

Unsecured Term Loan, (LIBOR + 5.50%, 1.00% Floor), 6.50%, 04/28/17(b)(c)(f)

     1,470,588             1,477,941   

Global Tel*Link Corp.

     

First Lien Term Loan, (LIBOR + 3.75%, 1.25% Floor), 5.00%, 05/23/20(b)(c)

     1,238,332             1,213,565   

Ntelos, Inc.

     

Advanced Term Loan B, (LIBOR + 4.75%, 1.00% Floor), 5.75%, 11/09/19(b)(c)

     4,008,381             3,547,417   

Securus Technologies Holdings, Inc.

     

Second Lien Initial Term Loan, (LIBOR + 7.75%, 1.25% Floor), 9.00%, 04/30/21(c)

     5,000,000             4,807,500   

The TelX Group, Inc.

     

Second Lien Initial Term Loan, (LIBOR + 6.50%, 1.00% Floor), 7.50%, 04/09/21(c)

     600,000             603,000   
 

 

See accompanying Notes to Financial Statements.  |  19


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

June 30, 2015 (unaudited)

 

 

    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

Senior Loans(a) (continued)

  

TELECOMMUNICATIONS (continued)

  

U.S. TelePacific Corp.

     

Advance Term Loan, (LIBOR + 5.00%, 1.00% Floor), 6.00%, 11/25/20(c)

     1,783,599             1,785,829   
     

 

 

 
        15,887,422   
     

 

 

 

TRANSPORTATION: CARGO - 1.8%

  

Carrix, Inc.

     

Term Loan, (LIBOR + 3.50%, 1.00% Floor), 4.50%,
01/07/19(c)

     4,012,764             3,766,982   

OSG Bulk Ships, Inc.

     

Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 5.25%, 08/05/19(c)

     1,044,450             1,047,719   
     

 

 

 
        4,814,701   
     

 

 

 

TRANSPORTATION: CONSUMER - 1.2%

  

Blue Bird Body Co.

     

Facility Term Loan, (LIBOR + 5.50%, 1.00% Floor), 6.50%, 06/26/20(b)(c)

     1,440,993             1,444,595   

Travel Leaders Group, LLC

     

Term Loan B, (LIBOR + 6.00%, 1.00% Floor), 7.00%,
12/07/20(c)

     1,836,024             1,861,269   
     

 

 

 
        3,305,864   
     

 

 

 

UTILITIES: ELECTRIC - 1.9%

  

Granite Acquisition, Inc.

     

Second Lien Term Loan B, (LIBOR + 7.25%, 1.00% Floor), 8.25%, 12/19/22(c)

     1,309,090             1,339,638   

Pike Corp.

     

First Lien Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 12/22/21(c)

     2,776,574             2,790,457   

Second Lien Initial Term Loan, (LIBOR + 8.50%, 1.00% Floor), 9.50%, 06/22/22(c)

     1,000,000             993,335   
     

 

 

 
        5,123,430   
     

 

 

 

Total Senior Loans
(Cost $265,283,600)

              260,965,852   
     

 

 

 

Corporate Notes and Bonds - 31.5%(e)

  

AUTOMOTIVE - 0.4%

  

American Tire Distributors, Inc.

     

10.25%, 03/01/22(h)

     1,028,000             1,102,530   
     

 

 

 

BANKING, FINANCE, INSURANCE & REAL ESTATE - 4.1%

  

First Data Corp.

     

10.63%, 06/15/21

     3,256,000             3,614,160   

11.25%, 01/15/21

     1,190,000             1,323,875   

National Financial Partners Corp.

     

9.00%, 07/15/21(h)

     4,000,000             3,965,000   

SquareTwo Financial Corp.

     

11.63%, 04/01/17

     2,647,000             1,958,780   
     

 

 

 
        10,861,815   
     

 

 

 
    

Principal   
 Amount ($) 

 

    

 Value ($) 

 

 

BEVERAGE, FOOD & TOBACCO - 3.5%

  

Chiquita Brands International, Inc. / Chiquita Brands, LLC

     

7.88%, 02/01/21

     2,462,000             2,662,038   

Land O’Lakes Capital Trust I

     

7.45%, 03/15/28(h)

     4,719,000             5,037,533   

NBTY, Inc.

     

9.00%, 10/01/18

     1,625,000             1,683,906   
     

 

 

 
        9,383,477   
     

 

 

 

CAPITAL EQUIPMENT - 1.1%

  

Optimas OE Solutions Holdings, LLC / Optimas OE Solutions, Inc.

     

8.63%, 06/01/21(h)

     3,000,000             3,060,000   
     

 

 

 

CHEMICALS, PLASTICS & RUBBER - 2.6%

  

Magnetation, LLC / Mag Finance Corp.

     

11.00%, 05/15/18(b)(h)(i)

     3,461,000             1,212,804   

TPC Group, Inc. (Texas Petrochemical)

     

8.75%, 12/15/20(h)

     6,000,000             5,580,000   
     

 

 

 
        6,792,804   
     

 

 

 

CONSUMER GOODS: NON-DURABLE - 1.8%

  

American Greetings Corp.

     

7.38%, 12/01/21

     4,529,000             4,772,434   
     

 

 

 

ENERGY: OIL & GAS - 5.2%

  

Citgo Holding, Inc.

     

10.75%, 02/15/20(h)

     3,000,000             3,082,500   

Northern Oil and Gas, Inc.

  

8.00%, 06/01/20

     1,519,000             1,389,885   

Sidewinder Drilling, Inc.

  

9.75%, 11/15/19(b)(h)

     6,000,000             4,050,000   

Summit Midstream Holdings, LLC / Summit Midstream Finance Corp.

     

7.50%, 07/01/21

     5,000,000             5,262,500   
     

 

 

 
              13,784,885   
     

 

 

 

HEALTHCARE & PHARMACEUTICALS - 1.3%

  

Valeant Pharmaceuticals International, Inc. (Canada)

     

7.50%, 07/15/21(f)(h)

     3,200,000             3,452,000   
     

 

 

 

HIGH TECH INDUSTRIES - 1.2%

  

Cimpress NV (Netherlands)

     

7.00%, 04/01/22(b)(f)(h)

     3,000,000             3,093,750   
     

 

 

 

MEDIA: ADVERTISING, PRINTING & PUBLISHING - 0.6%

  

Acosta, Inc.

     

7.75%, 10/01/22(h)

     1,600,000             1,616,000   
     

 

 

 

MEDIA: BROADCASTING & SUBSCRIPTION - 3.5%

  

Columbus International, Inc. (Barbados)

     

7.38%, 03/30/21(f)(h)

     3,285,000             3,543,694   

Intelsat Jackson Holdings S.A. (Luxembourg)

     

7.25%, 10/15/20(f)

     1,000,000             992,500   
 

 

20  |  See accompanying Notes to Financial Statements.


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

June 30, 2015 (unaudited)

 

 

     Principal            
    

 Amount ($) 

 

    

 Value ($) 

 

 

Corporate Notes and Bonds(e) (continued)

  

MEDIA: BROADCASTING & SUBSCRIPTION (continued)

  

Intelsat Luxembourg, S.A. (Luxembourg)

     

7.75%, 06/01/21(f)

     3,000,000             2,516,250   

Radio One, Inc.

     

9.25%, 02/15/20(h)

     2,484,000             2,272,860   
     

 

 

 
        9,325,304   
     

 

 

 

MEDIA: DIVERSIFIED & PRODUCTION - 1.1%

  

SiTV, Inc.

     

10.38%, 07/01/19(h)

     3,420,000             2,838,600   
     

 

 

 

 

SERVICES: CONSUMER - 1.1%

  

Laureate Education, Inc.

     

10.00%, 09/01/19(h)

     2,000,000             1,872,500   

StoneMor Partners, L.P. / Cornerstone Family Services of West Virginia

     

7.88%, 06/01/21

     987,000             1,031,415   
     

 

 

 
        2,903,915   
     

 

 

 

TELECOMMUNICATIONS - 4.0%

  

Altice US Finance I Corp.

     

5.38%, 07/15/23(h)

     1,333,000             1,303,008   

Avaya, Inc.

     

9.00%, 04/01/19(h)

     5,255,000             5,386,375   

Windstream Services, LLC

     

7.75%, 10/15/20

     4,000,000             3,930,000   
     

 

 

 
        10,619,383   
     

 

 

 

 

Total Corporate Notes and Bonds
(Cost $88,803,331)

                83,606,897   
     

 

 

 

Structured Products - 14.3%(j)

  

Anchorage Capital CLO, Ltd. (Cayman Islands)

     

Series 2015-6A, Class E2, 7.11%, 04/15/27(b)(f)(h)(k)

     4,400,000             4,415,840   

Atlas Senior Loan Fund, Ltd. (Cayman Islands)

     

Series 2012-1A, Class B3L, 7.77%, 08/15/24(b)(f)(h)(k)

     5,000,000             4,975,000   

Cent CLO, L.P. (Cayman Islands)

     

Series 2013-17A, Class D, 6.28%, 01/30/25(b)(f)(h)(k)

     4,000,000             3,874,000   

ECP CLO, Ltd. (Cayman Islands)

     

Series 2014-6, 6.83%,
07/15/26(b)(f)(h)(k)

     4,000,000             3,837,320   

Ivy Hill Middle Market Credit Fund Ltd. 10 (Cayman Islands)

     

7.58%, 07/18/27(b)(f)

     2,350,000             2,328,944   

JFIN CLO, Ltd. (Cayman Islands)

     

Series 2013-1I, Class E, 6.28%, 01/20/25(b)(f)(k)

     2,000,000             1,703,200   

Series 2015-1A, Class E, 5.35%, 03/15/26(b)(f)(h)(k)

     4,500,000             3,793,500   

Marea CLO, Ltd. (Cayman Islands)

     

Series 2012-1A, Class E, 6.38%, 10/15/23(b)(f)(h)(k)

     4,000,000             3,969,284   
     Principal            
    

 Amount ($) 

 

    

 Value ($) 

 

 

NXT Capital CLO, LLC 2014-1

     

Series 2014-1, 5.78%,
04/23/26(b)(h)(k)

     5,000,000                4,500,000   

OCP CLO, Ltd. (Cayman Islands)

     

Series 2014-5A, Class E, 5.53%, 04/26/26(b)(f)(h)(k)

     3,000,000                2,426,475   

Octagon Investment Partners XIV, Ltd. (Cayman Islands)

     

Series 2012-1A, Class E, 6.78%, 01/15/24(b)(f)(h)(k)

     2,200,000                1,994,234   
     

 

 

 

Total Structured Products
(Cost $38,440,753)

        37,817,797   
     

 

 

 
     
     Share            
    

Quantity

 

    

  Value ($)

 

 

Preferred Stock - 1.5%

     

BANKING, FINANCE, INSURANCE & REAL ESTATE - 1.5%

  

Watford Holdings, Ltd. (Bermuda)

     

8.50% (b)(f)

     160,000                3,904,160   
     

 

 

 

Total Preferred Stock
(Cost $3,920,000)

        3,904,160   
     

 

 

 

Warrants - 0.0%

     

BANKING, FINANCE, INSURANCE & REAL ESTATE - 0.0%

  

Medical Card System, Inc.

     

07/26/18(b)(l)

     50,689                  
     

 

 

 

 

Total Warrants
(Cost $ — )

          
     

 

 

 

 

Total Investments-145.7%

        386,294,706   

(Cost of $396,447,684) (m)(n)

     

Other Assets & Liabilities,
Net-6.3%

        16,744,123   

Loan Outstanding-(52.0)%

        (137,960,921
     

 

 

 

Net Assets -100.0%

                265,077,908   
     

 

 

 
 

 

See accompanying Notes to Financial Statements.  |  21


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

June 30, 2015 (unaudited)

 

 

(a)  “Senior Loans” are senior, secured loans made to companies whose debt is rated below investment grade and investments with similar characteristics. Senior Loans typically hold a first lien priority and pay interest at rates that are determined periodically on the basis of a floating base lending rate plus a spread. Unless otherwise identified, all Senior Loans carry a variable rate of interest. These base lending rates are primarily the LIBOR and secondarily the prime rate offered by one or more major U.S. banks and the certificate of deposit rate used by commercial lenders. The rates shown represent the weighted average rate at June 30, 2015. Senior Loans are generally not registered under the 1933 Act and often contain certain restrictions on resale and cannot be sold publicly. Senior Loans often require prepayments from excess cash flow or permit the borrower to repay at its election. The degree to which borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with accuracy. As a result, the actual maturity may be substantially less than the stated maturity shown.

Senior Loan assets may have additional unfunded loan commitments. As of June 30, 2015, the Fund had unfunded loan commitments, which could be extended at the option of the borrower, pursuant to the following loan agreements:

 

     Unfunded Loan       
Borrower    Commitments     

 

    

Charger OpCo B.V. (Oak Tea, Inc.)*

     $ 3,740,601        

LTS Buyer, LLC (Sidera Networks, Inc.)

     1,912,192        
  

 

 

    

Total Unfunded Loan Commitments

     $ 5,652,793        
  

 

 

    

* The loan commitment for Charger OpCo B.V. (Oak Tea, Inc.) was subsequently funded on July 2, 2015.

 

(b) Fair Value Level 3 security. All remaining securities are categorized as Level 2.
(c)  The interest rate on this Senior Loan is subject to a base rate plus 1 month or 3 month LIBOR, which at June 30, 2015 was 0.19% and 0.28%, respectively. As the interest rate is subject to a minimum LIBOR floor which was greater than the 1 month or 3 month LIBOR rate at June 30, 2015, the prevailing rate in effect at June 30, 2015 was the base rate plus the LIBOR floor, except as indicated.
(d)  All or a portion of this Senior Loan position has not settled. Full contract rates do not take effect until settlement date, therefore, are subject to change.
(e)  Fixed rate asset.
(f)  Foreign issuer traded in U.S. dollars.
(g)  Represents a PIK security which may pay interest in additional principal amount.
(h)  Securities exempt from registration pursuant to Rule 144A under the 1933 Act. These securities may only be resold in transactions exempt from registration to qualified institutional buyers. At June 30, 2015, these securities amounted to $86,254,807, or 32.5% of net assets.
(i)  The issuer is in default of its payment obligation as of May 5, 2015, as such, income is no longer being accrued.
(j)  Structured Products include CLOs. A CLO typically takes the form of a financing company (generally called a special purpose vehicle or “SPV”), created to reapportion the risk and return characteristics of a pool of assets. While the assets underlying CLOs are often Senior Loans or corporate notes and bonds, the assets may also include (i) subordinated loans; (ii) debt tranches of other CLOs; and (iii) equity securities incidental to investments in Senior Loans. The Fund may invest in lower tranches of CLOs, which typically experience a lower recovery, greater risk of loss or deferral or non-payment of interest than more senior tranches of the CLO. A key feature of the CLO structure is the prioritization of the cash flows from a pool of debt securities among the several classes of the CLO. The SPV is a company founded for the purpose of securitizing payment claims arising out of this asset pool. On this basis, marketable securities are issued by the SPV which, due to the diversification of the underlying risk, generally represent a lower level of risk than the original assets. The redemption of the securities issued by the SPV typically takes place at maturity out of the cash flow generated by the collected claims.
(k)  Floating rate asset. The interest rate shown reflects the rate in effect at June 30, 2015.
(l)  Non income-producing asset.
(m)  The Fund has granted a security interest in substantially all of its assets in the event of default under the credit facility (Note 8).
(n)  The aggregate cost of securities for federal income tax purposes was $396,460,161. Cost for U.S. federal income tax purposes differs from book basis primarily due to the deferral of losses from wash sales. Unrealized appreciation and depreciation on investments are as follows:

 

     

Gross unrealized appreciation

    $ 5,287,819      

Gross unrealized depreciation

     (15,453,274)      
  

 

 

    

Net unrealized depreciation

    $     (10,165,455)      
  

 

 

    

 

22  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Statements of Assets and Liabilities

June 30, 2015  (unaudited)

 

     Apollo    Apollo
     Senior    Tactical
     Floating Rate    Income
      Fund Inc.    Fund Inc.

Assets:

         

Investment securities at fair value (cost $423,534,172 and $396,447,684, respectively)

     $ 419,679,010        $ 386,294,706  

Cash and cash equivalents

       18,653,709          17,365,252  

Interest and dividends receivable

       2,609,668          3,951,258  

Receivable for investment securities sold

       26,008,970          18,967,315  

Unrealized appreciation on unfunded transactions (Note 9)

       56,391          56,391  

Prepaid expenses

       265,030          264,677  
    

 

 

      

 

 

 

Total Assets

     $ 467,272,778        $ 426,899,599  
    

 

 

      

 

 

 

Liabilities:

         

Borrowings under credit facility (principal $149,269,000 and $138,000,000, respectively, less unamortized deferred financing costs of $91,459 and $39,079, respectively) (Note 8)

     $ 149,177,541        $ 137,960,921  

Payable for investment securities purchased

       30,123,135          22,796,902  

Interest payable

       306,831          329,083  

Distributions payable to common shareholders

       62,225          51,239  

Investment advisory fee payable

       359,626          333,086  

Other payables and accrued expenses due to affiliates

       108,551          101,725  

Other payables and accrued expenses

       250,232          248,735  
    

 

 

      

 

 

 

Total Liabilities

       180,388,141          161,821,691  
    

 

 

      

 

 

 

Commitments and Contingencies (Note 9)

         

Net Assets (Applicable to Common Shareholders)

     $ 286,884,637        $ 265,077,908  
    

 

 

      

 

 

 

Net Assets Consist of:

         

Paid-in capital ($0.001 par value, 999,998,466 and 1,000,000,000 common shares authorized, respectively, and 15,573,061 and 14,464,026 issued and outstanding, respectively) (Note 6)

     $ 296,704,310        $ 275,624,904  

Undistributed net investment income

       1,324,004          2,020,654  

Accumulated net realized loss from investments

       (7,344,906 )        (2,471,063 )

Net unrealized depreciation on investments and unfunded transactions

       (3,798,771 )        (10,096,587 )
    

 

 

      

 

 

 

Net Assets (Applicable to Common Shareholders)

     $ 286,884,637        $ 265,077,908  
    

 

 

      

 

 

 

Number of Common Shares outstanding

       15,573,061          14,464,026  

Net Asset Value, per Common Share

     $ 18.42        $ 18.33  

 

See accompanying Notes to Financial Statements.  |  23


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Statements of Operations

For the Six Months Ended June 30, 2015 (unaudited)

 

     Apollo      Apollo    
     Senior      Tactical     
     Floating Rate      Income    
      Fund Inc.      Fund Inc.     

Investment Income:

             

Interest

       $13,981,194            $14,777,262    

Dividends

       170,000            170,000    
    

 

 

        

 

 

   

Total Investment Income

       14,151,194            14,947,262    
    

 

 

        

 

 

   

Expenses:

             

Investment advisory fee (Note 3)

       2,164,638            2,003,380    

Interest and commitment fee expense (Note 8)

       1,096,380            964,422    

Professional fees

       237,562            207,806    

Administrative services of the Adviser (Note 3)

       323,889            299,693    

Insurance expense

       173,289            173,289    

Amortization of deferred financing costs (Note 8)

       51,895            42,929    

Board of Directors fees (Note 3)

       50,574            55,574    

Other operating expenses (Note 3)

       198,447            187,637    
    

 

 

        

 

 

   

Total Expenses

       4,296,674            3,934,730    

Expense reimbursement waived by Adviser (Note 3)

                     
    

 

 

        

 

 

   

Net Expenses

       4,296,674            3,934,730    
    

 

 

        

 

 

   

Net Investment Income

       9,854,520            11,012,532    
    

 

 

        

 

 

   

Net Realized and Unrealized Gain/(Loss) on Investments

             

Net realized loss on investments

       (3,839,782 )          (2,671,250 )  

Net change in unrealized appreciation/(depreciation) on investments and unfunded transactions (Note 9)

       4,944,371            3,462,496    
    

 

 

        

 

 

   

Net realized and unrealized gain on investments

       1,104,589            791,246    
    

 

 

        

 

 

   

Net Increase in Net Assets, Applicable to Common Shareholders, Resulting From Operations

       $10,959,109            $11,803,778    
    

 

 

        

 

 

   

 

24  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Statements of Changes in Net Assets

 

 

     Six Months      Year    
     Ended      Ended    
     June 30, 2015      December 31,    
      (unaudited)      2014     

Increase/(Decrease) in Net Assets:

             

From Operations

             

Net investment income

     $ 9,854,520          $ 18,404,508    

Net realized (loss)/gain on investments

       (3,839,782 )          1,508,772    

Net change in unrealized appreciation/(depreciation) on investments and unfunded transactions

       4,944,371            (13,230,681 )  

Distributions to preferred shareholders

                  (244,641 )  
    

 

 

        

 

 

   

Net increase in net assets from operations

       10,959,109            6,437,958    
    

 

 

        

 

 

   

Distributions to Common Shareholders

             

From net investment income

       (9,066,636 )          (19,176,667 )  
    

 

 

        

 

 

   

Total distributions to common shareholders

       (9,066,636 )          (19,176,667 )  
    

 

 

        

 

 

   

Total increase/(decrease) in net assets

     $ 1,892,473          $ (12,738,709 )  

Net Assets Applicable to Common Shares

             

Beginning of period

       284,992,164            297,730,873    
    

 

 

        

 

 

   

End of period

     $ 286,884,637          $ 284,992,164    
    

 

 

        

 

 

   

Undistributed net investment income

     $ 1,324,004          $ 534,942    
    

 

 

        

 

 

   

 

See accompanying Notes to Financial Statements.  |  25


Apollo Tactical Income Fund Inc.

Statements of Changes in Net Assets

 

 

     Six Months      Year    
     Ended      Ended    
     June 30, 2015      December 31,    
      (unaudited)      2014     

Increase/(Decrease) in Net Assets:

             

From Operations

             

Net investment income

     $ 11,012,532          $ 21,617,971    

Net realized (loss)/gain on investments

       (2,671,250 )          2,163,995    

Net change in unrealized appreciation/(depreciation) on investments and unfunded transactions

       3,462,496            (18,578,584 )  
    

 

 

        

 

 

   

Net increase in net assets from operations

       11,803,778            5,203,382    
    

 

 

        

 

 

   

Distributions to Common Shareholders

             

From net investment income

       (10,153,746 )          (21,593,489 )  

From realized gains on investments

                  (2,358,946 )  
    

 

 

        

 

 

   

Total distributions to common shareholders

       (10,153,746 )          (23,952,435 )  
    

 

 

        

 

 

   

Total increase/(decrease) in net assets

     $ 1,650,032          $ (18,749,053 )  

Net Assets Applicable to Common Shares

             

Beginning of period

       263,427,876            282,176,929    
    

 

 

        

 

 

   

End of period

     $ 265,077,908          $ 263,427,876    
    

 

 

        

 

 

   

Undistributed net investment income

     $     2,020,654          $     1,160,978    
    

 

 

        

 

 

   

 

26  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Statement of Cash Flows

For the Six Months Ended June 30, 2015 (unaudited)

 

 

 

 

Cash Flows From Operating Activities:

  

Net increase in net assets from operations

   $ 10,959,109   

Adjustments to Reconcile Net Decrease in Net Assets from Operations to Net Cash Flows Used by Operating Activities:

  

Net realized loss on investments

     3,839,782   

Net change in unrealized (appreciation)/depreciation on investments and unfunded transactions

     (4,944,371

Net amortization/(accretion) of premium/(discount)

     (466,947

Purchase of investment securities

     (134,450,971

Proceeds from disposition of investment securities and principal paydowns

     121,935,749   

Payment-in-kind interest

     (76,858

Amortization of deferred financing costs

     51,895   

Changes in Operating Assets and Liabilities:

  

Increase in interest and dividends receivable

     (225,628

Increase in prepaid expenses

     (183,092

Increase in interest payable

     20,235   

Decrease in investment advisory fee payable

     (11,058

Decrease in other payables and accrued expenses due to affiliates

     (89,721

Increase in other payables and accrued expenses

     25,866   
  

 

 

 

Net cash flows used in operating activities

     (3,616,010
  

 

 

 

Cash Flows From Financing Activities:

  

Distributions paid to common shareholders (net of change in distributions payable to common shareholders)

     (9,137,529
  

 

 

 

Net cash flows used in financing activities

     (9,137,529
  

 

 

 

Net Decrease in Cash and Cash Equivalents

     (12,753,539

Cash and cash equivalents, beginning of period

     31,407,248   
  

 

 

 

Cash and cash equivalents, end of period

   $ 18,653,709   
  

 

 

 

Supplemental Disclosure of Cash Flow Information

  

Cash paid during the period for interest

   $ 1,076,145   
  

 

 

 

 

See accompanying Notes to Financial Statements.  |  27


Apollo Tactical Income Fund Inc.

Statement of Cash Flows

For the Six Months Ended June 30, 2015 (unaudited)

 

 

 

 

Cash Flows From Operating Activities:

  

Net increase in net assets from operations

   $ 11,803,778   

Adjustments to Reconcile Net Increase in Net Assets from Operations to Net Cash Flows Provided by Operating Activities:

  

Net realized loss on investments

     2,671,250   

Net change in unrealized (appreciation)/depreciation on investments and unfunded transactions

     (3,462,496

Net amortization/(accretion) of premium/(discount)

     (355,360

Purchase of investment securities

     (132,748,376

Proceeds from disposition of investment securities and principal paydowns

     133,040,880   

Payment-in-kind interest

     (95,931

Amortization of deferred financing costs

     42,929   

Changes in Operating Assets and Liabilities:

  

Increase in interest and dividends receivable

     (400,984

Increase in prepaid expenses

     (182,739

Increase in interest payable

     108,586   

Decrease in investment advisory fee payable

     (12,881

Decrease in other payables and accrued expenses due to affiliates

     (96,177

Increase in other payables and accrued expenses

     11,005   
  

 

 

 

Net cash flows provided by operating activities

     10,323,484   
  

 

 

 

Cash Flows From Financing Activities:

  

Deferred financing costs

     (47,997

Distributions paid to common shareholders (net of change in distributions payable to common shareholders)

     (10,299,655
  

 

 

 

Net cash flows used in financing activities

     (10,347,652
  

 

 

 

Net Decrease in Cash and Cash Equivalents

     (24,168

Cash and cash equivalents, beginning of period

     17,389,420   
  

 

 

 

Cash and cash equivalents, end of period

   $ 17,365,252   
  

 

 

 

Supplemental Disclosure of Cash Flow Information

  

Cash paid during the period for interest

   $ 855,836   
  

 

 

 

 

28  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Financial Highlights

For a Common Share outstanding throughout the period

 

     For the                          
     Six Months     For the     For the     For the     For the  
     Ended     Year     Year     Year     Period  
     June 30,     Ended     Ended     Ended     Ended  
     2015     December 31,     December 31,     December 31,     December 31,  

Per Common Share Operating Performance:

   (unaudited)     2014     2013     2012     2011(a)  

 

 

Net Asset Value, Beginning of Period

   $ 18.30             $ 19.12               $ 18.73              $ 17.68                 $ 19.10(b)            
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from Investment Operations:

          

Net investment income(c)

     0.63               1.18                 1.34                1.39                   1.00               

Net realized and unrealized gain/(loss) on investments

     0.07               (0.75)               0.35                1.10                   (1.46)              

Distributions from net investment income to Series A Preferred Shareholders

     —               (0.02)               (0.04)               (0.05)                  (0.02)              
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Total from investment operations

     0.70               0.41                 1.65                2.44                   (0.48)              
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Less Distributions Paid to Common Shareholders from:

          

Net investment income

     (0.58)              (1.23)               (1.26)               (1.38)                  (0.88)              

Net realized gain on investments

     —               —                 —                (0.01)                  (0.02)              
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total distributions paid to Common Shareholders

     (0.58)              (1.23)               (1.26)               (1.39)                  (0.90)              
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Common Share offering charges to paid-in capital

     —               —                 —                —                   (0.04)              

 

 

Net Asset Value, End of Period

   $ 18.42             $ 18.30              $ 19.12              $ 18.73                 $ 17.68               

Market Value, End of Period

   $ 17.78             $ 16.63              $ 18.10              $ 18.77                 $ 16.01               

Total return based on net asset value(d)

     4.01%(e)        2.63%             9.19%             14.23%               (2.43)%(e)       

Total return based on market value(d)

     10.48%(e)        (1.48)%            3.14%             26.41%               (15.62)%(e)       

 

 

Ratios to Average Net Assets Applicable to Common Shareholders:

          

Ratio of total expenses to average net assets

     3.02%(f)        3.07%             3.00%             3.21%               2.99%(f)        

Ratio of net expenses to average net assets

     3.02%(f)        3.07%             3.00%             3.18%               2.88%(f)        

Ratio of net investment income to average net assets

     6.92%(f)        6.22%(g)         7.03%(g)         7.51%(g)            6.49%(f)(g)     

Ratio of net investment income to average net assets net of distributions to Series A Preferred Shareholders

     —              6.13%             6.80%             7.25%               6.33%(f)         

Supplemental Data:

          

Portfolio turnover rate

     30.8%(e)        80.0%             72.0%             66.6%               41.5%(e)        

Net assets at end of period (000’s)

   $ 286,885            $ 284,992               $ 297,731              $ 290,822                 $ 273,650               

 

 

Senior Securities:

          

Total Series A Preferred Shares outstanding

     —               —                1,534                1,534                   1,534               

Liquidation and market value per Series A Preferred Shares

     —               —              $ 20,000              $ 20,000                 $ 20,000               

Asset coverage per share(h)

     —               —              $ 294,078              $ 289,574                 $ 278,380               

Principal loan outstanding (in 000’s)

   $ 149,269             $ 149,269              $ 122,705              $ 122,705                 $ 122,705               

Asset coverage per $1,000 of loan outstanding

   $ 2,922(i)          $ 2,909(i)            $ 3,676(j)            $ 3,620(j)              $ 3,480(j)            

 

 

(a)  From February 23, 2011 (commencement of operations) to December 31, 2011.
(b)  Net of sales load of $0.90 per share of initial offering.
(c)  Based on weighted average outstanding shares.
(d)  Total return based on net asset value and total return based on market value assuming all distributions reinvested at reinvestment rate.
(e)  Not annualized.
(f)  Annualized.
(g)  Net investment income ratio does not reflect payment to preferred shareholders.
(h)  Calculated by subtracting the Fund’s total liabilities (not including the Series A Preferred Shares and borrowings outstanding) from the Fund’s total assets, and dividing this by the number of Series A Preferred Shares outstanding.
(i)  Calculated by subtracting the Fund’s total liabilities (not including the borrowings outstanding) from the Fund’s total assets, and dividing this by the amount of borrowings outstanding.
(j)  Calculated by subtracting the Fund’s total liabilities (not including the Series A Preferred Shares and borrowings outstanding) from the Fund’s total assets, and dividing this by the amount of borrowings outstanding.

 

See accompanying Notes to Financial Statements.  |  29


Apollo Tactical Income Fund Inc.

Financial Highlights

For a Common Share outstanding throughout the period

 

    For the               
    Six Months      For the     For the  
    Ended      Year     Period  
    June 30,      Ended     Ended  
    2015      December 31,     December 31,  

Per Common Share Operating Performance:

  (unaudited)      2014     2013(a)  

 

 

Net Asset Value, Beginning of Period

  $ 18.21                $ 19.51            $ 19.10(b)         
 

 

 

    

 

 

   

 

 

 

Income from Investment Operations:

      

Net investment income(c)

    0.76                  1.50              1.03            

Net realized and unrealized gain/(loss) on investments

    0.06                  (1.14)             0.39            
 

 

 

    

 

 

   

 

 

 

 

Total from investment operations

    0.82                  0.36              1.42            
 

 

 

    

 

 

   

 

 

 

Less Distributions Paid to Common Shareholders from:

      

Net investment income

    (0.70)                 (1.50)             (0.96)           

Net realized gain on investments

    —                  (0.16)             (0.01)           
 

 

 

    

 

 

   

 

 

 

Total distributions paid to Common Shareholders

    (0.70)                 (1.66)             (0.97)           
 

 

 

    

 

 

   

 

 

 

Common share offering charges to paid-in capital

    —                  —               (0.04)           

 

 

 

 

    

 

 

   

 

 

 

Net Asset Value, End of Period

  $ 18.33                $ 18.21            $ 19.51            

Market Value, End of Period

  $ 15.77                $ 15.96            $ 18.00            

Total return based on net asset value(d)

    5.07%(e)           2.63%          7.94%(e)     

Total return based on market value(d)

    3.14%(e)           (2.51)%        (4.90)%(e)    

 

 

Ratios to Average Net Assets Applicable to Common Shareholders:

      

Ratio of total expenses to average net assets

    2.98%(f)           2.90%            2.58%(f)     

Ratio of net expenses to average net assets

    2.98%(f)           2.90%            2.55%(f)     

Ratio of net investment income to average net assets

    8.35%(f)           7.63%            6.38%(f)     

Supplemental Data:

      

Portfolio turnover rate

    34.0%(e)           78.7%            72.4%(e)     

Net assets at end of period (000’s)

  $ 265,078                $ 263,428              $ 282,177            

 

 

Senior Securities:

      

Principal loan outstanding (in 000’s)

  $ 138,000                $ 138,000              $ 138,000            

Asset coverage per $1,000 of loan outstanding(g)

  $ 2,921                $ 2,909              $ 3,045            

 

(a)  From February 25, 2013 (commencement of operations) to December 31, 2013.
(b)  Net of sales load of $0.90 per share of initial offering.
(c)  Based on weighted average outstanding shares.
(d)  Total return based on net asset value and total return based on market value assuming all distributions reinvested at reinvestment rate.
(e)  Not annualized.
(f)  Annualized.
(g)  Calculated by subtracting the Fund’s total liabilities (not including the borrowings outstanding) from the Fund’s total assets, and dividing this by the amount of borrowings outstanding.

 

30  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements

June 30, 2015 (unaudited)

Note 1. Organization and Operations

Apollo Senior Floating Rate Fund Inc. (“AFT”) and Apollo Tactical Income Fund Inc. (“AIF”) (individually, a “Fund” or, together, the “Funds”) are corporations organized under the laws of the State of Maryland and registered with the U.S. Securities and Exchange Commission (the “SEC”) under the Investment Company Act of 1940 (the “Investment Company Act”) as non-diversified, closed-end management investment companies. AFT and AIF commenced operations on February 23, 2011 and February 25, 2013, respectively. Prior to that, the Funds had no operations other than matters relating to their organization and the sale and issuance of 5,236 shares of common stock in each Fund to Apollo Credit Management, LLC (the “Adviser”) at a price of $19.10 per share. The Adviser serves as the Funds’ investment adviser and is an affiliate of Apollo Global Management, LLC (“AGM”). The Funds’ common shares are listed on the New York Stock Exchange (“NYSE”) and trade under the symbols “AFT” and “AIF”, respectively.

Investment Objective

AFT’s investment objective is to seek current income and preservation of capital. AFT seeks to achieve its investment objective by investing primarily in senior, secured loans made to companies whose debt is rated below investment grade (“Senior Loans”) and investments with similar characteristics. Senior Loans typically hold a first lien priority and pay interest at rates that are determined periodically on the basis of a floating base lending rate plus a spread. These base lending rates are primarily the London Interbank Offered Rate (“LIBOR”), and secondarily the prime rate offered by one or more major United States banks and the certificate of deposit rate used by commercial lenders. Senior Loans are typically made to U.S. and, to a limited extent, non-U.S. corporations, partnerships and other business entities (“Borrower(s)”) that operate in various industries and geographical regions. AFT seeks to generate current income and preservation of capital through a disciplined approach to credit selection and under normal market conditions will invest at least 80% of its managed assets in floating rate Senior Loans and investments with similar economic characteristics. This policy and AFT’s investment objective are not fundamental and may be changed by the board of directors of AFT with at least 60 days’ prior written notice provided to shareholders. Part of AFT’s investment objective is to seek preservation of capital. AFT’s ability to achieve capital preservation may be limited by its investment in credit instruments that have speculative characteristics. There can be no assurance that AFT will achieve its investment objective.

AIF’s primary investment objective is to seek current income with a secondary objective of preservation of capital. AIF seeks to achieve its investment objectives primarily by allocating its assets among different types of credit instruments based on absolute and relative value considerations and its analysis of the credit markets. This ability to dynamically allocate AIF’s assets may result in AIF’s portfolio becoming concentrated in a particular type of credit instrument (such as Senior Loans or high yield corporate bonds) and substantially less invested in other types of credit instruments. Under normal market conditions, at least 80% of AIF’s managed assets will be invested in credit instruments and investments with similar economic characteristics. For purposes of this policy, “credit instruments” will include Senior Loans, subordinated loans, high yield corporate bonds, notes, bills, debentures, distressed securities, mezzanine securities, structured products (including, without limitation, collateralized debt obligations (“CDOs”), collateralized loan obligations (“CLOs”) and asset-backed securities), bank loans, corporate loans, convertible and preferred securities, government and municipal obligations, mortgage-backed securities, repurchase agreements, and other fixed-income instruments of a similar nature that may be represented by derivatives such as options, forwards, futures contracts or swap agreements. This policy and AIF’s investment objectives are not fundamental and may be changed by the board of directors of AIF (together with the board of directors of AFT, the “Board of Directors” or “Board”) with at least 60 days’ prior written notice provided to shareholders. AIF will seek to preserve capital to the extent consistent with its primary investment objective. AIF’s ability to achieve capital preservation may be limited by its investment in credit instruments that have speculative characteristics. There can be no assurance that AIF will achieve its investment objectives.

The Funds are classified as “non-diversified” under the Investment Company Act. As a result, each Fund can invest a greater portion of its assets in obligations of a single issuer than a “diversified” fund. Each Fund may therefore be more susceptible than a diversified fund to being adversely affected by any single corporate, economic, political or regulatory occurrence.

Note 2. Significant Accounting Policies

The Funds are investment companies that follow the accounting and reporting guidance of Accounting Standards Codification Topic 946 applicable to investment companies. The Funds’ financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results may differ from those estimates and these differences could be material.

 

Semi-Annual Report  |  31


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements  (continued)

June 30, 2015 (unaudited)

 

Fund Valuation

Each Fund’s net asset value (“NAV”) per share will be determined daily generally as of 4:00 pm on each day that the NYSE is open for trading, or at other times as determined by the Board. The NAV of each Fund’s common shares is the total assets of the Fund (including all securities, cash and other assets) minus the sum of the Fund’s total liabilities (including accrued expenses, dividends payable, borrowings and the liquidation value of any preferred stock) divided by the total number of common shares of the Fund outstanding.

Security Valuation

The Funds value their investments primarily using the mean of the bid and ask prices provided by a nationally recognized security pricing service or broker. Senior Loans, corporate notes and bonds, preferred stock, warrants and structured products are priced based on valuations provided by an approved independent pricing service or broker, if available. If market or broker quotations are not available, or a price is not available from an independent pricing service or broker, or if the price provided by the independent pricing service or broker is believed to be unreliable, the security will be fair valued pursuant to procedures adopted by the Board. In general, the fair value of a security is the amount that the Funds might reasonably expect to receive upon the sale of an asset or pay to transfer a liability in an orderly transaction between willing market participants at the reporting date. Fair value procedures generally take into account any factors deemed relevant, which may include, among others, (i) the nature and pricing history of the security, (ii) the liquidity or illiquidity of the market for the particular security, (iii) recent purchases or sales transactions for the particular security or similar securities and (iv) press releases and other information published about the issuer. In these cases, a Fund’s NAV will reflect the affected portfolio securities’ fair value as determined in the judgment of the Board or its designee instead of being determined by the market. Using a fair value pricing methodology to value securities may result in a value that is different from a security’s most recent sale price and from the prices used by other investment companies to calculate their NAV. Determination of fair value is uncertain because it involves subjective judgments and estimates. There can be no assurance that a Fund’s valuation of a security will not differ from the amount that it realizes upon the sale of such security.

Fair Value Measurements

Each Fund has performed an analysis of all existing investments to determine the significance and character of all inputs to their fair value determination. The levels of fair value inputs used to measure the Funds’ investments are characterized into a fair value hierarchy. The three levels of the fair value hierarchy are described below:

Level 1 — Quoted unadjusted prices for identical assets and liabilities in active markets to which the Funds have access at the date of measurement;

Level 2 — Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, but are valued based on executed trades, broker quotations that constitute an executable price, and alternative pricing sources supported by observable inputs which, in each case, are either directly or indirectly observable for the asset in connection with market data at the measurement date; and

Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. In certain cases, investments classified within Level 3 may include securities for which the Funds have obtained indicative quotes from broker-dealers that do not necessarily represent prices the broker may be willing to trade on, as such quotes can be subject to material management judgment. Unobservable inputs are those inputs that reflect the Funds’ own assumptions that market participants would use to price the asset or liability based on the best available information.

At the end of each reporting period, management evaluates the Level 2 and Level 3 assets, if any, for changes in liquidity, including but not limited to: whether a broker is willing to execute at the quoted price, the depth and consistency of prices from independent pricing services, and the existence of contemporaneous, observable trades in the market.

 

32  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements  (continued)

June 30, 2015 (unaudited)

 

The valuation techniques used by the Funds to measure fair value at June 30, 2015 maximized the use of observable inputs and minimized the use of unobservable inputs. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Transfers into and out of the levels are recognized at the value at the end of the period. Summaries of the Funds’ investments categorized in the fair value hierarchy as of June 30, 2015 are as follows:

 

Apollo Senior Floating Rate Fund Inc.

Assets

 

  

Total Fair Value at
June 30,

2015

 

  

Level 1
Quoted Price

 

  

 

Level 2
Significant
Observable
Inputs

 

  

Level 3  
Significant  
Unobservable  
Inputs  

 

Cash and Cash Equivalents

     $ 18,653,709        $ 18,653,709        $        $  

Senior Loans

       392,292,830                   318,455,310          73,837,520  

Corporate Notes and Bonds

       23,482,020                   23,218,154          263,866  

Preferred Stock

       3,904,160                            3,904,160  

Warrants

                                   

Unrealized appreciation on Unfunded Loan Commitments

       56,391                            56,391  
    

 

 

      

 

 

      

 

 

      

 

 

 

 

Total Assets

    

 

$

 

438,389,110

 

 

     $ 18,653,709        $ 341,673,464        $ 78,061,937  
    

 

 

      

 

 

      

 

 

      

 

 

 

The following is a reconciliation of Level 3 holdings for which significant unobservable inputs were used in determining fair value as of June 30, 2015:

 

Apollo Senior Floating Rate Fund Inc.

 
     

Total Fair
Value

 

   

Senior Loans

 

   

 

Corporate
Notes
and Bonds

 

    

Common
Stock

 

    

Preferred
Stock

 

    

Warrants

 

    

 

Unfunded
Loan
Commitments

 

 

Fair Value, beginning of period

   $ 87,829,716      $ 82,651,446      $ —         $ 1,255,250         $ 3,920,000         $         3,020          $       —       

Purchases, including capitalized PIK

     11,660,562        10,871,740        788,822          —          —          —          —       

Sales

     (16,362,530     (15,220,253     —          (1,142,277)         —          —          —       

Accretion/(amortization) of discounts/

                  

(premiums)

     104,050        104,050        —          —          —          —          —       

Net realized gain/(loss)

     (4,020,199     50,382        —          (4,070,581)         —          —       

Change in net unrealized appreciation/

                  

(depreciation)

     3,420,956        7,164        (524,956)         3,957,608          (15,840)         (3,020)         —       

Transfers into Level 3

     18,273,570        18,217,179        —          —          —          —          56,391       

Transfers out of Level 3

     (22,844,188     (22,844,188     —          —          —          —          —       
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Total Fair Value, end of period

  

 

$

 

78,061,937

 

  

  $ 73,837,520      $ 263,866         $ —         $ 3,904,160         $ —          $56,391       
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Investments were transferred into Level 3 during the six months ended June 30, 2015 due to a decrease in the availability of qualified observable inputs obtained to support the fair value of each investment as assessed by the Adviser. Transfers out of Level 3 during the six months ended June 30, 2015 were due to an increase in the availability of qualified observable inputs as assessed by the Adviser. There were no transfers between Level 1 and Level 2 during the period shown. The net change in unrealized appreciation/(depreciation) attributable to Level 3 investments still held at June 30, 2015 was $1,040,329 for AFT.

 

Semi-Annual Report  |  33


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements  (continued)

June 30, 2015 (unaudited)

 

The following table provides quantitative measures used to determine the fair values of the Level 3 investments as of June 30, 2015:

 

Apollo Senior Floating Rate Fund Inc.

    

Assets

 

  

 

Fair Value at   
June 30,   

2015   

 

    

Valuation Technique(s)

 

  

Unobservable Input(s)

 

 

 

Range of
Unobservable
Input(s) Utilized

 

              

Senior Loans

     $70,277,831      

Independent pricing service and/or broker quotes

   Vendor and/or
broker quotes
  N/A  
     3,440,124      

Market comparable approach(a)

   Total enterprise
value/EBITDA(a)
  6.8x  
     119,565      

Discounted cash flow(b)

       Discount rate(b)   13.40%  

Corporate Notes and Bonds

     263,866      

Independent pricing service and/or broker quotes

   Vendor and/or
broker quotes
  N/A  

Preferred Stock

     3,904,160      

Discounted cash flow(b)

   Discount rate(b)   8.71%  

Warrants

          

Market comparable approach(a)

 

   Total enterprise
    value/EBITDA(a)

 

  6.8x

 

   

Unfunded Loan Commitments

    

 

56,391

                    

  

  

  

Independent pricing service and/or broker quotes

   Vendor and/or
    broker quotes
  N/A  

Total Fair Value

     $78,061,937             
            

 

(a)  The Fund utilized a market comparable approach to fair value this security. The significant unobservable inputs used in the valuation model were total enterprise value and earnings before interest, taxes, depreciation and amortization (“EBITDA”) based on comparable multiples for a similar investment with similar risks. Significant increases or decreases in either of these inputs in isolation may result in a significantly higher or lower fair value measurement.
(b)  The Fund utilized a discounted cash flow model to fair value this security. The significant unobservable input used in the valuation model was the discount rate, which was determined based on the market rates an investor would expect for a similar investment with similar risks. The discount rate was applied to present value the projected cash flows in the valuation model. Significant increases in the discount rate may significantly lower the fair value of an investment; conversely, significant decreases in the discount rate may significantly increase the fair value of an investment.

 

Apollo Tactical Income Fund Inc.

Assets

 

  

 

Total Fair Value
at

June 30,

2015

 

  

Level 1
Quoted Price

 

  

 

Level 2
Significant
Observable
Inputs

 

  

 

Level 3
Significant
Unobservable
Inputs

 

Cash and Cash Equivalents

     $ 17,365,252        $ 17,365,252        $        $  

Senior Loans

       260,965,852                   200,301,866          60,663,986  

Corporate Notes and Bonds

       83,606,897                   75,250,343          8,356,554  

Structured Products

       37,817,797                            37,817,797  

Preferred Stock

       3,904,160                            3,904,160  

Warrants

                                   

Unrealized appreciation on Unfunded Loan Commitments

       56,391                            56,391  
    

 

 

      

 

 

      

 

 

      

 

 

 

  Total Assets

     $ 403,716,349        $ 17,365,252        $ 275,552,209        $ 110,798,888  
    

 

 

      

 

 

      

 

 

      

 

 

 

 

34  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements  (continued)

June 30, 2015 (unaudited)

 

The following is a reconciliation of Level 3 holdings for which significant unobservable inputs were used in determining fair value as of June 30, 2015:

 

Apollo Tactical Income Fund Inc.

 

 

   
    

Total Fair

Value

 

   

Senior Loans

 

   

 

Corporate
Notes
and Bonds

 

   

Structured
Products

 

   

Preferred
Stock

 

   

Warrants

 

   

 

Unfunded

Loan
Commitments

 

 

Fair Value, beginning of period

  $ 129,149,862      $ 67,400,467      $ 27,031,563      $ 30,795,044      $ 3,920,000      $         2,788        $        —        

Purchases, including capitalized PIK

    26,910,058        10,076,019        6,487,220        10,346,819                      —        

Sales

    (31,106,204     (11,518,966     (15,587,238     (4,000,000                   —        

Accretion/(amortization) of discounts/(premiums)

    98,069        63,541        (42,724     77,252                      —        

Net realized gain/(loss)

    365,082        80,214        250,362        34,506                      —        

Change in net unrealized appreciation/(depreciation)

    (1,719,146     (244,694     (2,020,000     564,176        (15,840     (2,788     —        

Transfers into Level 3

    10,306,579        10,250,188                                    56,391        

Transfers out of Level 3

    (23,205,412     (15,442,783     (7,762,629                          —        
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Total Fair Value, end of period

  $ 110,798,888      $ 60,663,986      $ 8,356,554      $ 37,817,797      $ 3,904,160      $        $56,391        
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Investments were transferred into Level 3 during the six months ended June 30, 2015 due to a decrease in the availability of qualified observable inputs obtained to support the fair value of each investment as assessed by the Adviser. Transfers out of Level 3 during the six months ended June 30, 2015 were due to an increase in the availability of qualified observable inputs as assessed by the Adviser. There were no transfers between Level 1 and Level 2 during the period shown. The net change in unrealized appreciation/(depreciation) attributable to Level 3 investments still held at June 30, 2015 was $1,666,577 for AIF.

The following table provides quantitative measures used to determine the fair values of the Level 3 investments as of June 30, 2015:

 

Apollo Tactical Income Fund Inc.

 

Assets

  

 

Fair Value at

June 30,

2015

   

 

  

   Valuation Technique(s)         Unobservable Input(s)        

 

Range of      
Unobservable      
Input(s) Utilized      

 

Senior Loans

     $56,938,930        

Independent pricing service and/or broker quotes

     Vendor and/or
broker quotes
     N/A
     3,175,499        

Market comparable approach(a)

       Total enterprise
value/EBITDA(a)
     6.8x
     549,557        

Discounted cash flow(b)

     Discount rate(b)      13.40%

Corporate Notes and Bonds

     8,356,554        

Independent pricing service and/or broker quotes

     Vendor and/or
    broker quotes
     N/A

Structured Products

     35,488,853        

Independent pricing service and/or broker quotes

     Vendor and/or
    broker quotes
     N/A
     2,328,944        

Cost/ Recent transaction(c)

     Transaction price(c)      N/A

Preferred Stock

 

     3,904,160          

Discounted cash flow(b)

 

       Discount rate(b)

 

       8.71%

 

Warrants

            

Market comparable approach(a)

     Total enterprise
    value/EBITDA(a)
     6.8x

Unfunded Loan Commitments

     56,391        

Independent pricing service and/or broker quotes

     Vendor and/or
broker quotes
     N/A
  

 

 

                

 

Total Fair Value

  

 

$

 

110,798,888

 

  

              
  

 

 

                
                 

 

(a) 

The Fund utilized a market comparable approach to fair value this security. The significant unobservable inputs used in the valuation model were total enterprise value and EBITDA based on comparable multiples for a similar investment with similar risks. Significant increases or decreases in

 

Semi-Annual Report  |  35


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements  (continued)

June 30, 2015 (unaudited)

 

 

either of these inputs in isolation may result in a significantly higher or lower fair value measurement.

(b)  The Fund utilized a discounted cash flow model to fair value this security. The significant unobservable input used in the valuation model was the discount rate, which was determined based on the market rates an investor would expect for a similar investment with similar risks. The discount rate was applied to present value the projected cash flows in the valuation model. Significant increases in the discount rate may significantly lower the fair value of an investment; conversely, significant decreases in the discount rate may significantly increase the fair value of an investment.
(c)  The Fund purchased this security on June 30, 2015, and utilized the transaction cost to approximate fair value.

Cash and Cash Equivalents

Cash and cash equivalents of the Funds consist of cash held in bank accounts and liquid investments with maturities, at the date of acquisition, not exceeding 90 days that, at times, may exceed federally insured limits. As of June 30, 2015, cash and cash equivalents were comprised of cash deposited with U.S. financial institutions in which carrying value approximated fair value and are considered to be Level 1 in the fair value hierarchy.

Industry Classifications

The industry classifications of the Funds’ investments, as presented in the accompanying Schedules of Investments, represent management’s belief as to the most meaningful presentation of the classification of such investments. For Fund compliance purposes, the Funds’ industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, with the primary source being Moody’s, and/or as defined by the Funds’ management. These definitions may not apply for purposes of this report, which may combine industry sub-classifications.

Fair Value of Financial Instruments

The fair value of the Funds’ assets and liabilities that qualify as financial instruments under U.S. GAAP approximates the carrying amounts presented in the accompanying Statements of Assets and Liabilities.

Securities Transactions and Investment Income

Securities transactions of the Funds are recorded on the trade date for financial reporting purposes. Cost is determined based on consideration given, and the unrealized appreciation/(depreciation) on investment securities is the difference between fair value determined in compliance with the valuation policy approved by the Board and the cost. Realized gains and losses from securities transactions and foreign currency transactions, if any, are recorded on the basis of identified cost and stated separately in the Statements of Operations. Interest and dividend income is recorded on the accrual basis and includes the accretion of original issue discounts and amortization of premiums where applicable.

U.S. Federal Income Tax Status

The Funds intend to qualify each year as regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and will distribute substantially all of their net investment income and net capital gains, if any, for their tax years. The Funds may elect to incur excise tax if it is deemed prudent by the Board from a cash management perspective or in the best interest of shareholders due to other facts and circumstances. For the year ended December 31, 2014, AFT did not record a U.S. federal excise tax provision. For the year ended December 31, 2014, AIF recorded a U.S. federal excise tax provision of $26,532. In 2014, it was deemed prudent for cash management purposes for AIF to pay a nominal excise tax which equated to $0.002 per common share. An additional $1,178 and $890 was paid during 2015 relating to the 2014 tax year by AFT and AIF, respectively. No federal income tax or excise provision is required for the six months ended June 30, 2015.

The Funds have followed the authoritative guidance on accounting for and disclosure of uncertainty in tax positions, which requires the Funds to determine whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Funds have determined that there was no material effect on the financial statements from following this authoritative guidance. In the normal course of business, the Funds are subject to examination by federal, state and local jurisdictions, where applicable, for tax years for which applicable statutes of limitations have not expired. The statute of limitations on AFT’s federal and state tax filings remains open for the years ended December 31, 2011 to 2014. The statute of limitations on AIF’s federal and state fillings remains open for the years ended December 31, 2013 and 2014.

Distributions to Common Shareholders

The Funds intend to make regular monthly cash distributions of all or a portion of their net investment income available to common shareholders. The Funds intend to pay common shareholders at least annually all or substantially all of their capital gains and net investment income after the payment of dividends and interest owed with respect to outstanding preferred shares and/or notes or other forms of leverage utilized by the Funds, although for cash management purposes, the Funds may elect to retain distributable amounts and pay excise tax as described above. If the Funds make a long-term

 

36  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements  (continued)

June 30, 2015 (unaudited)

 

capital gain distribution, they will be required to allocate such gain between the common shares and any preferred shares issued by the Funds in proportion to the total dividends paid to each class for the year in which the income is realized.

The distributions for any full or partial year might not be made in equal amounts, and one distribution may be larger than the other. The Funds will make a distribution only if authorized by the Board and declared by the Funds out of assets legally available for these distributions. The Funds may pay a special distribution at the end of each calendar year, if necessary, to comply with U.S. federal income tax requirements. This distribution policy may, under certain circumstances, have certain adverse consequences to the Funds and their shareholders because it may result in a return of capital to shareholders, which would reduce the Funds’ NAV and, over time, potentially increase the Funds’ expense ratios. If the Funds distribute a return of capital, it means that the Funds are returning to shareholders a portion of their investment rather than making a distribution that is funded from the Funds’ earned income or other profits. The Board may elect to change AFT’s or AIF’s distribution policy at any time.

Asset Segregation

In accordance with the Investment Company Act and various SEC and SEC staff interpretive positions, a Fund may “set aside” liquid assets (often referred to as “asset segregation”), or engage in measures in accordance with SEC or Staff guidance, to “cover” open positions with respect to certain kinds of financial instruments that could otherwise be considered “senior securities” as defined in Section 18(g) of the Investment Company Act. With respect to certain derivative contracts that are contractually required to cash settle, for example, a Fund is permitted to set aside liquid assets in an amount equal to the Fund’s daily marked-to-market net obligations (i.e., the Fund’s daily net liability) under the contracts, if any, rather than such contracts’ full notional value. In other circumstances, a Fund may be required to set aside liquid assets equal to such a financial instrument’s full notional value, or enter into appropriate offsetting transactions, while the position is open. Each Fund reserves the right to modify its asset segregation policies in the future to comply with any changes in the positions from time to time announced by the SEC or its staff regarding asset segregation. These segregation and coverage requirements could result in a Fund’s maintaining securities positions that it would otherwise liquidate, segregating assets at a time when it might be disadvantageous to do so or otherwise restricting portfolio management. Such segregation and coverage requirements will not limit or offset losses on related positions.

New Accounting Pronouncement

In April 2015, the Financial Accounting Standards Board issued guidance to simplify the presentation of debt issuance costs in financial statements. Under the new guidance, the Funds are required to present such costs in the Statements of Assets and Liabilities as a direct deduction from the carrying value of the related debt liability rather than as an asset. The standard is effective for financial statements with fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. The Funds have elected early adoption. The impact to the financial statements will be the reclassification of any unamortized debt issuance costs on the Statements of Assets and Liabilities and the modification of related accounting policy disclosures in the Notes to Financial Statements.

Note 3. Investment Advisory, Administration and Other Agreements with Affiliates

Investment Advisory Fee

The Adviser provides certain investment advisory, management and administrative services to the Funds pursuant to investment advisory and management agreements with each of the Funds. For its services, each Fund pays the Adviser monthly at the annual rate of 1.0% of the average daily value of the Fund’s managed assets. Managed assets are defined as the total assets of a Fund (including any assets attributable to any preferred shares that may be issued or to money borrowed or notes issued by the Fund) minus the sum of the Fund’s accrued liabilities, including accrued interest and accumulated dividends (other than liabilities for money borrowed (including the liquidation preference of preferred shares) or notes issued). The Adviser may elect from time to time, in its sole discretion, to waive its receipt of the advisory fee from a Fund. If the Adviser elects to waive its compensation, such action may have a positive effect on the Fund’s performance or yield. The Adviser is under no obligation to waive its fees, may elect not to do so, may decide to waive its compensation periodically or may decide to waive its compensation on only one of the Funds at any given time. For the six months ended June 30, 2015, the Adviser earned fees of $2,164,638 and $2,003,380 from AFT and AIF, respectively.

Administrative Services and Expense Reimbursements

The Funds and the Adviser have entered into Administrative Services and Expense Reimbursement Agreements pursuant to which the Adviser provides certain administrative services, personnel and facilities to the Funds and performs operational services necessary for the operation of the Funds not otherwise provided by other service providers of the Funds. These services may include, without limitation, certain bookkeeping and recordkeeping services, compliance and legal services, investor relations assistance, and accounting and auditing support. Pursuant to these agreements, the Funds

 

Semi-Annual Report  |  37


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements  (continued)

June 30, 2015 (unaudited)

 

will reimburse the Adviser at cost, at the Adviser’s request, for certain costs and expenses incurred by the Adviser that are necessary for the administration and operation of the Funds. In addition, the Adviser or one of its affiliates may pay certain expenses on behalf of the Funds and then allocate these expenses to the Funds for reimbursement. For the six months ended June 30, 2015, the Adviser provided services under these agreements totaling $323,889 and $299,693 for AFT and AIF, respectively, which is shown in the Statements of Operations as administrative services of the Adviser. Included in these amounts is approximately $50,000 and $48,000 for AFT and AIF, respectively, of remuneration for officers of the Funds. The Adviser did not waive the right to expense reimbursements and investment advisory fees for either Fund during the six months ended June 30, 2015.

Each Fund has also entered into an Administration and Accounting Services Agreement (the “Administration Agreements”) with BNY Mellon Investment Servicing (US) Inc. (“BNYMIS”). Under the Administration Agreements, BNYMIS provides certain administrative services necessary for the operation of the Funds, including maintaining the Funds’ books and records, providing accounting services and preparing regulatory filings. The Funds pay BNYMIS for these services. The Bank of New York Mellon (“BNY Mellon”) serves as the Funds’ custodian. BNYMIS serves as the Funds’ transfer agent. BNY Mellon and BNYMIS provided services totaling $134,212 and $130,610 for AFT and AIF, respectively, for the six months ended June 30, 2015 which are included in the Statements of Operations in other operating expenses.

Board of Directors Fees

On an annual basis, AFT and AIF pay to each member of the Board who is not an “interested person” (as defined in the Investment Company Act) of the Funds an annual retainer of $12,000 per Fund, plus $2,000 for each in-person Board meeting of a single Fund ($3,000, or $1,500 per Fund, for a joint meeting of both Funds), plus $1,000 for attendance at telephonic board meetings of a single Fund or participation in special committee meetings of a single Fund not held in conjunction with regularly scheduled Board meetings ($1,500, or $750 per Fund, for a joint meeting of both Funds). In addition, the chairman of the audit committee receives $3,000 per year from each Fund. The Funds also reimbursed independent Board members for travel and out-of-pocket expenses incurred in connection with such meetings, and the Funds split the cost of such expenses for meetings involving both AFT and AIF. Included in the Statements of Operations for the six months ended June 30, 2015 is $50,574 and $55,574 of expenses related to the Board for each of AFT and AIF, respectively.

Note 4. Investment Transactions

For the six months ended June 30, 2015, the cost of investment purchases and proceeds from sales of securities and principal paydowns were as follows:

 

Fund

 

 

Cost of
Investments
Purchased

 

 

 

Proceeds
from
Investments
Sold

 

 

 

Apollo Senior Floating Rate Fund Inc.

   

 

 

 

$131,006,232

 

 

      $134,080,068  

Apollo Tactical Income Fund Inc.

 

     

 

132,853,386

 

 

 

     

 

137,057,304

 

 

 

Note 5. Risks

Senior Loans

Senior Loans are usually rated below investment grade and may also be unrated. As a result, the risks associated with Senior Loans are similar to the risks of below investment grade fixed income instruments, although Senior Loans are senior and secured, in contrast to other below investment grade fixed income instruments, which are often subordinated or unsecured. Investments in Senior Loans rated below investment grade are considered speculative because of the credit risk of their issuers. Such issuers are considered more likely than investment grade issuers to default on their payments of interest and principal owed to the Funds, and such defaults could reduce the Funds’ NAV and income distributions. An economic downturn would generally lead to a higher non-payment rate, and a Senior Loan may lose significant market value before a default occurs. Moreover, any specific collateral used to secure a Senior Loan may decline in value or become illiquid, which would adversely affect the Senior Loan’s value. Senior Loans are subject to a number of risks, including liquidity risk and the risk of investing in below investment grade fixed income instruments.

Senior Loans are subject to the risk of non-payment of scheduled interest or principal. Such non-payment would result in a reduction of income to the Funds, a reduction in the value of the investment and a potential decrease in the NAV of the Funds. There can be no assurance that the liquidation of any collateral securing a Senior Loan would satisfy the Borrower’s obligation in the event of non-payment of scheduled interest or principal payments, or that the collateral could be readily liquidated. In the event of bankruptcy or insolvency of a Borrower, the Funds could experience delays or limitations

 

38  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements  (continued)

June 30, 2015 (unaudited)

 

with respect to its ability to realize the benefits of the collateral securing a Senior Loan. The collateral securing a Senior Loan may lose all or substantially all of its value in the event of the bankruptcy or insolvency of a Borrower. Some Senior Loans are subject to the risk that a court, pursuant to fraudulent conveyance or other similar laws, could subordinate such Senior Loans to presently existing or future indebtedness of the Borrower or take other action detrimental to the holders of Senior Loans including, in certain circumstances, invalidating such Senior Loans or causing interest previously paid to be refunded to the Borrower.

There may be less readily available and reliable information about most Senior Loans than is the case for many other types of securities, including securities issued in transactions registered under the Securities Act of 1933 (the “1933 Act”) or registered under the Securities Exchange Act of 1934 (the “1934 Act”). As a result, the Adviser will rely primarily on its own evaluation of a Borrower’s credit quality rather than on any available independent sources. Therefore, the Funds will be particularly dependent on the analytical abilities of the Adviser.

In general, the secondary trading market for Senior Loans is not well developed. No active trading market may exist for certain Senior Loans, which may make it difficult to value them. Illiquidity and adverse market conditions may mean that the Funds may not be able to sell Senior Loans quickly or at a fair price. To the extent that a secondary market does exist for certain Senior Loans, the market for them may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods.

Senior Loans are generally not registered under the 1933 Act and often contain certain restrictions on resale and cannot be sold publicly. Senior Loans often require prepayments from excess cash flow or permit the Borrower to repay at its election. The degree to which Borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with accuracy. As a result, the actual maturity may be substantially less than the stated maturity shown on the Schedule of Investments.

The Funds may acquire Senior Loans through assignments or participations. The purchaser of an assignment typically succeeds to all the rights and obligations of the assigning institution and becomes a lender under the credit agreement with respect to the debt obligation; however, the purchaser’s rights can be more restricted than those of the assigning institution, and the Funds may not be able to unilaterally enforce all rights and remedies under the loan and with regard to any associated collateral. In general, a participation is a contractual relationship only with the institution participating out the interest, not with the Borrower. Sellers of participations typically include banks, broker-dealers and other financial and lending institutions. In purchasing participations, the Funds generally will have no right to enforce compliance by the Borrower with the terms of the loan agreement against the Borrower, and the Funds may not directly benefit from the collateral supporting the debt obligation in which they have purchased the participation. As a result, the Funds will be exposed to the credit risk of both the Borrower and the institution selling the participation. Further, in purchasing participations in lending syndicates, the Funds will not be able to conduct the due diligence on the Borrower or the quality of the Senior Loan with respect to which they are buying a participation that the Funds would otherwise conduct if they were investing directly in the Senior Loan, which may result in the Funds being exposed to greater credit or fraud risk with respect to the Borrower or the Senior Loan.

Corporate Bonds

The Funds may invest in a wide variety of bonds of varying maturities issued by U.S. and foreign corporations, other business entities, governments and municipalities and other issuers. Corporate bonds are issued with varying features and may differ in the way that interest is calculated, the amount and frequency of payments, the type of collateral, if any, and the presence of special features (e.g., conversion rights, call rights or other rights of the issuer). The Funds’ investments in corporate bonds may include, but are not limited to, senior, junior, secured and unsecured bonds, notes and other debt securities, and may be fixed rate, variable rate or floating rate, among other things.

The Adviser expects most of the corporate bonds in which the Funds invest will be high yield bonds (commonly referred to as “junk” bonds). An issuer of corporate bonds typically pays the investor a fixed rate of interest and must repay the amount borrowed on or before maturity. The investment return of corporate bonds reflects interest on the security and changes in the market value of the security. The market value of a corporate bond generally may be expected to rise and fall inversely with interest rates. The value of intermediate and longer-term corporate bonds normally fluctuates more in response to changes in interest rates than does the value of shorter-term corporate bonds. The market value of a corporate bond also may be affected by investors’ perceptions of the creditworthiness of the issuer, the issuer’s performance and perceptions of the issuer in the marketplace.

Subordinated Loans

Subordinated loans generally are subject to similar risks as those associated with investments in Senior Loans, except that such loans are subordinated in payment and/or lower in lien priority to first lien holders. In the event of default on a

 

Semi-Annual Report  |  39


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements  (continued)

June 30, 2015 (unaudited)

 

subordinated loan, the first priority lien holder has first claim to the underlying collateral of the loan. Subordinated loans are subject to the additional risk that the cash flow of the Borrower and property securing the loan or debt, if any, may be insufficient to meet scheduled payments after giving effect to the senior unsecured or senior secured obligations of the Borrower. This risk is generally higher for subordinated unsecured loans or debt that are not backed by a security interest in any specific collateral. Subordinated loans generally have greater price volatility than Senior Loans and may be less liquid.

Structured Products

Investments in structured products involve risks, including credit risk and market risk. When the Funds’ investments in structured products (such as CDOs, CLOs and asset-backed securities) are based upon the movement of one or more factors, including currency exchange rates, interest rates, reference bonds (or loans) or stock indices, depending on the factor used and the use of multipliers or deflators, changes in interest rates and movement of any factor may cause significant price fluctuations. Additionally, changes in the reference instrument or security may cause the interest rate on a structured product to be reduced to zero and any further changes in the reference instrument may then reduce the principal amount payable on maturity of the structured product. Structured products may be less liquid than other types of securities and more volatile than the reference instrument or security underlying the product.

The Funds may have the right to receive payments only from the structured product and generally do not have direct rights against the issuer or the entity that sold the assets to be securitized. While certain structured products enable the investor to acquire interests in a pool of securities without the brokerage and other expenses associated with directly holding the same securities, investors in structured products generally pay their share of the structured product’s administrative and other expenses. Although it is difficult to predict whether the prices of indices and securities underlying structured products will rise or fall, these prices (and, therefore, the prices of structured products) will be influenced by the same types of political and economic events that generally affect issuers of securities and capital markets. If the issuer of a structured product uses shorter-term financing to purchase longer-term securities, the issuer may be forced to sell its securities at below market prices if it experiences difficulty in obtaining short-term financing, which may adversely affect the value of the structured products owned by the Funds.

Certain structured products may be thinly traded or have a limited trading market. CLOs are typically privately offered and sold. As a result, investments in CLOs may be characterized by the Fund as illiquid securities. CLOs carry additional risks, including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments, (ii) the quality of the collateral may decline in value or default, (iii) the possibility that the investments in CLOs are subordinate to other classes or tranches of the CLOs and (iv) the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the issuer or unexpected investment results.

Note 6. Common Shares

Common share transactions were as follows:

 

Apollo Senior Floating Rate Fund Inc.

    
    

 

Six Months Ended June 30,
2015

 

 

Year Ended December 31,
2014

   
     

 

Shares

 

  

 

Amount

 

 

 

Shares

 

  

 

Amount

 

    

Common shares outstanding, beginning of period

       15,573,061          $296,705,488         15,573,061          $296,714,038    

Common shares issued as reinvestment of dividends

                                    

Permanent differences reclassified (primarily non-deductible expenses)

                     —                      (1,178 )                     —                      (8,550 )  

 

Common shares outstanding, end of period

       15,573,061          $296,704,310         15,573,061          $296,705,488    

    

                      

Apollo Tactical Income Fund Inc.

   

 

                          
    

 

Six Months Ended June 30,
2015

 

 

Year Ended December 31,
2014

   
     

 

Shares

 

  

 

Amount

 

 

 

Shares

 

  

 

Amount

 

    

Common shares outstanding, beginning of period

       14,464,026          $275,625,794         14,464,026          $275,655,578    

Common shares issued as reinvestment of dividends

                                    

Permanent differences reclassified (primarily non-deductible expenses)

                     —                         (890 )                     —                    (29,784 )  

Common shares outstanding, end of period

       14,464,026          $275,624,904         14,464,026          $275,625,794    

 

40  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements  (continued)

June 30, 2015 (unaudited)

 

Dividends declared on common shares with a record date of January 1, 2015 or later through the date of this report were as follows:

 

Apollo Senior Floating Rate Fund Inc.

Dividend

Declaration

Date

 

  

Ex-Dividend

Date

 

  

Record

Date

 

  

Payment

Date

 

  

Per

Share
Amount

 

  

Gross
Distribution

 

  

Cash
Distribution

 

  

 

Value of new 
Common 
Shares 
Issued 

 

 

        

December 18, 2014

   January 15, 2015    January 20, 2015    January 30, 2015    $0.0957    $1,490,342    $1,490,342    $—

January 20, 2015

   February 12, 2015    February 17, 2015    February 27, 2015    $0.0957    $1,490,342    $1,490,342      —

February 13, 2015

   March 17, 2015    March 19, 2015    March 31, 2015    $0.0977    $1,521,488    $1,521,488      —

March 19, 2015

   April 16, 2015    April 20, 2015    April 30, 2015    $0.0977    $1,521,488    $1,521,488      —

April 22, 2015

   May 14, 2015    May 18, 2015    May 29, 2015    $0.0977    $1,521,488    $1,521,488      —

May 14, 2015

   June 16, 2015    June 18, 2015    June 30, 2015    $0.0977    $1,521,488    $1,521,488      —

June 22, 2015

   July 17, 2015    July 21, 2015    July 31, 2015    $0.0977    $1,521,488    $1,521,488      —

July 27, 2015*

   August 17, 2015    August 19, 2015    August 31, 2015    $0.0977    $1,521,488      

August 7, 2015*

 

   September 16, 2015

 

   September 18, 2015

 

   September 30, 2015

 

   $0.0977

 

   $1,521,488

 

     

    

                    

Apollo Tactical Income Fund Inc.

Dividend

Declaration

Date

 

  

Ex-Dividend

Date

 

  

Record

Date

 

  

Payment

Date

 

  

Per

Share
Amount

 

  

Gross
Distribution

 

  

Cash
Distribution

 

  

 

Value of new 
Common 
Shares 
Issued 

December 18, 2014

   January 15, 2015    January 20, 2015    January 30, 2015    $0.1170    $1,692,291    $1,692,291    $—

January 20, 2015

   February 12, 2015    February 17, 2015    February 27, 2015    $0.1170    $1,692,291    $1,692,291      —

February 13, 2015

   March 17, 2015    March 19, 2015    March 31, 2015    $0.1170    $1,692,291    $1,692,291      —

March 19, 2015

   April 16, 2015    April 20, 2015    April 30, 2015    $0.1170    $1,692,291    $1,692,291      —

April 22, 2015

   May 14, 2015    May 18, 2015    May 29, 2015    $0.1170    $1,692,291    $1,692,291      —

May 14, 2015

   June 16, 2015    June 18, 2015    June 30, 2015    $0.1170    $1,692,291    $1,692,291      —

June 22, 2015

   July 17, 2015    July 21, 2015    July 31, 2015    $0.1170    $1,692,291    $1,692,291      —

July 27, 2015*

   August 17, 2015    August 19, 2015    August 31, 2015    $0.1170    $1,692,291      

August 7, 2015*

 

   September 16, 2015

 

   September 18, 2015

 

   September 30, 2015

 

   $0.1170

 

   $1,692,291

 

     

* Declared subsequent to June 30, 2015.

Note 7. Federal Tax Information

The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. GAAP. As a result, net investment income/(loss) and net realized gain/(loss) on investment transactions for a reporting period may differ significantly from distributions during such period.

The tax character of distributions paid by AFT during the fiscal year ended December 31, 2014 was as follows:

 

Apollo Senior Floating Rate Fund Inc.

 

Distributions paid from Ordinary Income: *

 

  

 

2014

 

Common Shareholders

       $19,176,667   

Preferred Shareholders

              244,641   

Total Distributions

       $19,421,308   

* For tax purposes, short-term capital gains distributions, if any, are considered ordinary income distributions.

The tax character of distributions paid by AIF during the fiscal year ended December 31, 2014 was as follows:

 

Apollo Tactical Income Fund Inc.

 

Distributions paid from Ordinary Income: *

 

  

 

2014

 

Common Shareholders

     $ 23,137,627  
    

 

 

 

Total Distributions

     $ 23,137,627  
    

 

 

 

* For tax purposes, short-term capital gains distributions, if any, are considered ordinary income distributions.

 

Semi-Annual Report  |  41


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements  (continued)

June 30, 2015 (unaudited)

 

Distributions paid from Long-Term Gains:

   2014      

 

   

Common Shareholders

   $ 814,808     
  

 

 

   

Total Distributions

   $ 814,808     
  

 

 

   

As of December 31, 2014, the most recent tax year end, the components of distributable earnings on a tax basis were as follows:

 

Fund

   Undistributed
Ordinary
Income
   Undistributed
Long-Term
Capital
Gains
  

Net

Unrealized

Appreciation/

(Depreciation)*

 

Accumulated

Capital and

Other Losses

 

 

Apollo Senior Floating Rate Fund Inc.

       $   534,942          $          —          $  (8,705,548       $(3,505,124

Apollo Tactical Income Fund Inc.

       1,235,377          126,010          (13,523,998 )        

* Any differences between book basis and tax basis net unrealized appreciation/(depreciation) are primarily due to the deferral of losses from wash sales.

For federal income tax purposes, capital loss carryforwards are available to offset future capital gains. As of December 31, 2014, long-term capital loss carryforwards totaled $3,505,124 for AFT, which may be carried forward for an unlimited period. During the year ended December 31, 2014, AFT utilized $1,466,762 of capital loss carryforwards.

Reclassifications are made to the Funds’ capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations. For the six months ended June 30, 2015, permanent differences resulting primarily from non-deductible expenses were identified and reclassified among the components of the Funds’ net assets as follows:

 

Fund

   Undistributed
Net
Investment
Income
  

Accumulated

Net Realized

Gain/Loss

from

Investments

   Paid-In    
Capital    

 

 

Apollo Senior Floating Rate Fund Inc.

       $1,178          $—           $(1,178)       

Apollo Tactical Income Fund Inc.

       890          —           (890)       

Unrealized appreciation/(depreciation) and basis of investments for U.S. federal income tax purposes at June 30, 2015 were as follows:

 

     Apollo Senior
Floating Rate
Fund Inc.
 

Apollo
Tactical
Income

Fund Inc.

 

 

Federal tax basis, cost

     $ 423,548,842       $ 396,460,161  
    

 

 

     

 

 

 

Unrealized appreciation

     $ 5,092,702       $ 5,287,819  

Unrealized depreciation

       (8,962,534 )       (15,453,274 )
    

 

 

     

 

 

 

Net unrealized appreciation/(depreciation)*

     $ (3,869,832 )     $ (10,165,455 )
    

 

 

     

 

 

 

* Any differences between book basis and tax basis net unrealized appreciation/(depreciation) are primarily due to the deferral of losses from wash sales.

Note 8. Credit Agreements and Preferred Shares

The Funds utilize leverage and may utilize leverage to the maximum extent permitted by law for investment and other general corporate purposes. The Funds may obtain leverage by issuing preferred shares and/or notes and may also borrow funds from banks and other financial institutions. The Funds may also gain leverage synthetically through swaps and other derivatives. The use of leverage to purchase additional securities creates an opportunity for increased common share dividends, but also creates risks for common shareholders, including increased variability of the Funds’ net income, distributions and/or NAV in relation to market changes. Leverage is a speculative technique that exposes the Funds to greater risk and increased costs than if it were not implemented. Increases and decreases in the value of the Funds’ portfolios will be magnified due to the use of leverage. In particular, leverage may magnify interest rate risk, which is the risk that the prices of portfolio securities will fall (or rise) if market interest rates for those types of securities rise (or fall). As a result, leverage may cause greater changes in the Funds’ NAV, which will be borne entirely by the Funds’ common shareholders.

 

42  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements  (continued)

June 30, 2015 (unaudited)

 

If the Funds issue preferred shares and/or notes or engage in other borrowings, they will have to pay dividends on their shares or interest on their notes or borrowings, which will increase expenses and may reduce the Funds’ return. These dividend payments or interest expenses (which will be borne entirely by the common shareholders) may be greater than the Funds’ return on the underlying investments. The Funds’ leveraging strategy may not be successful.

Apollo Senior Floating Rate Fund Inc.

On May 15, 2014, AFT entered into a $150,000,000 revolving credit facility with JPMorgan Chase Bank, N.A. (“JPM”) as lender and administrative agent. AFT has granted a security interest in substantially all of its assets in the event of default under the credit facility. On May 20, 2014, AFT reduced the commitment to $149,269,000. AFT may borrow on a revolving basis until May 15, 2016. Any loans outstanding under the credit facility must be repaid in full on May 15, 2016. The loans bear interest at a rate of three-month LIBOR plus 1.20%. As of June 30, 2015, AFT has $149,269,000 principal outstanding, which is the maximum commitment amount under the credit facility.

For the six months ended June 30, 2015, the average daily principal loan balance outstanding on days where borrowings existed was $149,269,000, the weighted average annual interest rate was 1.46% and the interest expense, which is included on the Statements of Operations in interest expense, was $1,096,380.

The fair value of AFT’s borrowings under the credit facility approximates the carrying amount presented in the accompanying Statements of Assets and Liabilities based on a yield analysis and remaining maturities for which AFT has determined would be categorized as Level 2 in the fair-value hierarchy.

The credit facility contains certain customary affirmative and negative covenants, including limitations on debt, liens and restricted payments, as well as certain portfolio limitations and customary prepayment provisions, including a requirement to prepay loans or take certain other actions if certain asset value tests are not met. As of June 30, 2015, AFT was not aware of any instances of non-compliance related to the credit facility.

In connection with AFT’s entry into the credit facility, certain debt financing costs were incurred by AFT and are shown net of the principal amount in the Statements of Assets and Liabilities. The deferred financing costs are amortized over the life of the credit facility. The amortization of the deferred financing costs is included in the Statements of Operations.

Apollo Tactical Income Fund Inc.

On April 24, 2015, AIF entered into a $138,000,000 revolving credit facility with JPM as lender and administrative agent. AIF has granted a security interest in substantially all of its assets in the event of default under the credit facility. AIF may borrow on a revolving basis until April 22, 2016. Any loans outstanding under the credit facility must be repaid in full on April 22, 2016. The loans bear interest at a rate of three-month LIBOR plus 1.00%. As of June 30, 2015, AIF has $138,000,000 principal outstanding, which is the maximum commitment amount under the credit facility.

For the six months ended June 30, 2015, the average daily principal loan balance outstanding on days where borrowings existed was $138,000,000, the weighted average annual interest rate was 1.39% and the interest expense, which is included on the Statements of Operations in interest expense, was $964,422.

Prior to April 24, 2015, AIF had a $138,000,000 revolving credit facility with JPM as lender and administrative agent that expired on April 26, 2015. The loans bore interest at a rate of three-month LIBOR plus 1.20%.

The fair value of AIF’s borrowings under the credit facility approximates the carrying amount presented in the accompanying Statements of Assets and Liabilities based on a yield analysis and remaining maturities for which AIF has determined would be categorized as Level 2 in the fair-value hierarchy.

The credit facility contains certain customary affirmative and negative covenants, including limitations on debt, liens and restricted payments, as well as certain portfolio limitations and customary prepayment provisions, including a requirement to prepay loans or take certain other actions if certain asset value tests are not met. As of June 30, 2015, AIF was not aware of any instances of non-compliance related to the credit facility.

In connection with AIF’s entry into the credit facility, certain debt financing costs were incurred by AIF and are shown net of the principal amount in the Statements of Assets and Liabilities. The deferred financing costs are amortized over the life of the credit facility. The amortization of the deferred financing costs is included in the Statements of Operations.

 

Semi-Annual Report  |  43


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements  (continued)

June 30, 2015 (unaudited)

 

Note 9. General Commitments and Contingencies

As of June 30, 2015, the Funds had unfunded loan commitments outstanding, which could be extended at the option of the borrower, as detailed below:

 

Borrower    AFT        AIF            

 

  

Charger OpCo B.V. (Oak Tea, Inc.)*

   $       3,740,601         $       3,740,601         

LTS Buyer, LLC (Sidera Networks, Inc.)

     1,912,192           1,912,192         
  

 

 

      

 

 

       

Total Unfunded Loan Commitments

   $ 5,652,793         $ 5,652,793         
  

 

 

      

 

 

       

* The loan commitment for Charger OpCo B.V. (Oak Tea, Inc.) was subsequently funded on July 2, 2015.

Unfunded loan commitments are marked to market on the relevant day of the valuation in accordance with the Funds’ valuation policies. Any related unrealized appreciation/(depreciation) on unfunded loan commitments is recorded on the Statements of Assets and Liabilities and the Statements of Operations. For the six months ended June 30, 2015, AFT and AIF recorded a net change in unrealized appreciation on unfunded transactions totaling $93,985 and $91,698, respectively.

Note 10. Indemnification

The Funds each have a variety of indemnification obligations under contracts with their service providers. The Funds’ maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. Based upon historical experience, the risk of loss from such claims is currently considered remote; however, there can be no assurance that losses will not occur or if claims are made against the Funds the losses will not be material.

Note 11. Subsequent Event

Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were issued and has determined that there were no subsequent events that would require disclosure in or adjustments to the financial statements.

 

44  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Additional Information

June 30, 2015 (unaudited)

Dividend Reinvestment Plan

Unless a shareholder specifically elects to receive common stock of the Funds as set forth below, all net investment income dividends and all capital gains distributions declared by the Board will be payable in cash.

A shareholder may elect to have net investment income dividends and capital gains distributions reinvested in common stock of the Funds. To exercise this option, such shareholder must notify BNYMIS, the plan administrator and the Funds’ transfer agent and registrar, in writing so that such notice is received by the plan administrator not less than 10 days prior to the record date fixed by the Board for the net investment income dividend and/or capital gains distribution involved.

The plan administrator will set up an account for shares acquired pursuant to the plan for each shareholder that elects to receive dividends and distributions in additional shares of common stock of the Funds (each a “Participant”). The plan administrator may hold each Participant’s shares, together with the shares of other Participants, in non-certificated form in the plan administrator’s name or that of its nominee.

The shares are acquired by the plan administrator for a participant’s account, depending upon the circumstances described below, either (i) through receipt of additional unissued but authorized shares of common stock from the Funds (“Newly Issued Shares”) or (ii) by purchase of outstanding shares of common stock on the open market (“Open-Market Purchases”) on the NYSE or elsewhere. If, on the dividend payment date, the NAV per share of the common stock is equal to or less than the market price per share of the common stock plus estimated brokerage commissions (such condition being referred to as “market premium”), the plan administrator will invest the dividend amount in Newly Issued Shares on behalf of the Participant. The number of Newly Issued Shares of common stock to be credited to the Participant’s account will be determined by dividing the dollar amount of the dividend by the NAV per share on the date the shares are issued, unless the NAV is less than 95% of the then current market price per share, in which case the dollar amount of the dividend will be divided by 95% of the then current market price per share. If, on the dividend payment date, the NAV per share is greater than the market value (such condition being referred to as “market discount”), the plan administrator will invest the dividend amount in shares acquired on behalf of the Participant in Open-Market Purchases.

The plan administrator’s service fee, if any, and expenses for administering the plan will be paid for by the Funds. If a Participant elects by written notice to the plan administrator to have the plan administrator sell part or all of the shares held by the plan administrator in the Participant’s account and remit the proceeds to the Participant, the plan administrator is authorized to deduct a $15 transaction fee plus a 5¢ per share brokerage commission from the proceeds.

Shareholders who receive dividends in the form of stock are subject to the same federal, state and local tax consequences as are shareholders who elect to receive their dividends in cash. A shareholder’s basis for determining gain or loss upon the sale of stock received in a dividend from the Funds will be equal to the total dollar amount of the dividend payable to the shareholders. Any stock received in a dividend will have a new holding period for tax purposes commencing on the day following the day on which the shares are credited to the U.S. shareholder’s account.

Participants may terminate their accounts under the plan by notifying the plan administrator via its website at bnymellon.com/ shareowner, by filling out the transaction request form located at the bottom of the Participant’s statement and sending it to the plan administrator at P.O. Box 30170, College Station, TX 77842 or by calling the plan administrator at 800-331-1710.

The plan may be terminated by the Funds upon notice in writing mailed to each Participant at least 30 days prior to any record date for the payment of any dividend or distribution by the Funds. All correspondence, including requests for additional information, concerning the plan should be directed to the plan administrator by mail at P.O. Box 30170, College Station, TX 77842.

 

Semi-Annual Report  |  45


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Additional Information  (continued)

June 30, 2015 (unaudited)

 

Approval of the Investment Advisory and Management Agreements for AFT and AIF

At a meeting of the Board of the Funds held on February 9, 2015, the Directors met in person to consider the approval of the Investment Advisory and Management Agreement between AFT and Apollo Credit Management, LLC (the “Adviser”) and the Investment Advisory and Management Agreement between AIF and the Adviser (each, an “Advisory Agreement” and together, the “Advisory Agreements”) for an additional one-year term. While the meetings occurred at the same time, the Directors considered each Advisory Agreement separately.

The Board has the responsibility under the Investment Company Act to approve annual renewal of each Fund’s Advisory Agreement at meetings of the Board called for the purpose of voting on such renewal. The Board generally receives, reviews and evaluates information concerning the services and personnel of the Adviser and its affiliates at quarterly meetings of the Board. While particular emphasis might be placed on information concerning the investment performance of each Fund, each Fund’s fees and expenses in comparison with other funds’ fees and expenses and the Adviser’s profitability at the meeting at which the renewal of the Advisory Agreements is considered, the process of evaluating each Fund’s investment advisory and management arrangements is an ongoing one.

In preparation for their review of the Advisory Agreements, all of the Directors who are not “interested persons,” as defined in the Investment Company Act (the “Independent Directors”), of the Funds present at the meeting met with their independent counsel in an executive session. In considering whether to approve the Advisory Agreements, the Directors, including the Independent Directors, reviewed materials provided in advance of the meeting by the Adviser and counsel to the Independent Directors and other materials which included, among other things: (i) information concerning the services rendered to each Fund by the Adviser; (ii) information concerning the revenues generated and expenses incurred by the Adviser from the operation of each Fund; and (iii) a memorandum outlining the legal duties of the Board under the Investment Company Act. The Board also reviewed information prepared by Strategic Insight, a third party service provider, which included information in respect of each Fund comparing (1) the Fund’s performance with that of a group of comparable funds selected by Strategic Insight (the “Peer Group”) and with a broader group of funds (the “Morningstar Category”), and (2) the Fund’s contractual and net management fees and total net expenses with those of its Peer Group and Morningstar Category.

The Directors also received information regarding each Fund’s operations, expenses and performance periodically throughout the year.

The nature, extent and quality of services provided by the Adviser.  The nature, extent and quality of the services provided by the Adviser to each Fund, including the Adviser’s expertise in managing loan portfolios, the integrated platform of the Adviser and its affiliates and the benefits, resources and opportunities of the platform that the Adviser is able to access was discussed. Fund management discussed the size and experience of the Adviser’s staff, the experience of its key personnel in providing investment management services, the systems used by the Adviser’s personnel and the ability of the Adviser to attract and retain capable personnel. The reputation, compliance history, compliance program and financial condition of the Adviser was also discussed. They discussed the terms of each Advisory Agreement and the Adviser’s responsibilities with respect to each Fund.

Investment performance of the Funds and the Adviser.   Representatives of the Adviser reviewed with the Board the performance of each Fund. Fund management discussed each Fund’s market price, and its yield. Representatives of the Adviser compared each Fund’s current dividend yield to the average dividend yield of certain of its peer funds identified by the Adviser. Fund management discussed each Fund’s investment performance as compared to the performance of relevant reference indexes (the “Benchmarks”) for various periods. On a net asset value basis, AFT outperformed the Benchmarks for the one-year period ended December 31, 2014 and for the periods from inception to December 31, 2014, December 31, 2013 and December 31, 2012 and underperformed the Benchmarks for the period from inception to December 31, 2011. On a net asset value basis, AIF outperformed the Benchmarks for the one-year period ended December 31, 2014 and for the periods from inception to December 31, 2014 and December 31, 2013. On a market value basis, AFT and AIF each underperformed the Benchmarks for all periods. Representatives of the Adviser reviewed each Fund’s investment performance as compared to that of its Peer Group and Morningstar Category for various periods ended December 31, 2014. Each Fund generally ranked above or slightly below the medians of its Peer Group and Morningstar Category for the various periods.

Cost of services provided and profits realized by the Adviser and its affiliates from the relationship with the Funds. The Directors received information from the Adviser regarding the profitability of each Fund to the Adviser and its affiliate and

 

46  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Additional Information  (continued)

June 30, 2015 (unaudited)

 

the methodology used by the Adviser in allocating its costs regarding the operations of the Funds and calculating profitability. In addition, the Directors considered whether any direct or indirect collateral benefits inured to the Adviser as a result of its affiliation with the Funds. It was noted that each Fund has entered into an Administrative Services and Reimbursement Agreement with the Adviser pursuant to which the Adviser provides the Fund with certain personnel and services not otherwise provided under the relevant Advisory Agreement, which services are required for the operations of the Fund, and the Fund generally reimburses the Adviser on an at cost basis for such services.

The extent to which economies of scale would be realized as the Funds grow and whether fee levels would reflect such economies of scale. The Directors considered the extent to which economies of scale are relevant for the Funds. It was noted that, because each Fund is a closed-end fund, any increase in asset levels generally would have to come from material appreciation through investment performance. It was also noted that an investment objective of each Fund is to seek current income and that a majority of each Fund’s realized income is expected to be distributed to its shareholders through monthly dividends.

Comparison of services rendered and fees paid to those under other investment advisory contracts, such as contracts of the same and other investment advisers or other clients. The Board discussed the net management fee and net expense ratio comparisons set forth in the Strategic Insight report with representatives of the Adviser. For each Fund, the Fund’s contractual management fee was within the range of those of its Peer Group funds. AFT’s net total expense ratio at both managed and common asset levels and AIF’s net total expense ratio at common asset levels ranked in the fourth quartile of the relevant Peer Group and Morningstar Category, and AIF’s net total expense ratio at managed asset levels ranked in the third quartile of its Peer Group and Morningstar Category. In considering the comparison of services rendered to and fees paid by each Fund to those under other investment advisory contracts, the Directors were aware of the nature of the investment strategies of each Fund and the fact that the relevant comparison funds may have investment strategies, restrictions and leverage different from those of the Fund. In regard to compensation paid to the Adviser with respect to other funds or accounts, the Adviser stated that none of the other funds or accounts advised by it or any of its affiliates is comparable to either Fund with respect to investment strategies.

Conclusion. After consideration of the factors discussed above, the Directors, including the Independent Directors, unanimously voted to approve each Advisory Agreement for an additional one-year term.

Shareholder Meeting Results

On May 12, 2015, AFT held its Annual Meeting of Shareholders for the election of Directors. The proposal was approved by AFT’s shareholders and the results of the voting are as follows:

 

NAME

   FOR      WITHHELD  

 

Barry Cohen

     11,071,657       67,989

Elliot Stein, Jr.

     11,072,036       67,610

On May 12, 2015, AIF held its Annual Meeting of Shareholders for the election of Directors. The proposal was approved by AIF’s shareholders and the results of the voting are as follows:

 

NAME

   FOR      WITHHELD  

 

Barry Cohen

     11,118,009       123,446

Elliot Stein, Jr.

     11,102,698       138,757

Robert L. Borden, Glenn N. Marchak, Todd J. Slotkin and Carl J. Rickertsen continue to serve in their capacities as Directors of the Funds.

 

Semi-Annual Report  |  47


Important Information About This Report

 

Investment Adviser

Apollo Credit Management, LLC

9 West 57th Street

New York, NY 10019

 

Administrator

BNY Mellon Investment Servicing (US) Inc.

4400 Computer Drive

Westborough, MA 01581

 

Transfer Agent

BNY Mellon Investment Servicing (US) Inc.

P.O. Box 30170

College Station, TX 77842

 

Custodian

The Bank of New York Mellon

One Wall Street

New York, NY 10286

 

Independent Registered Public

Accounting Firm

Deloitte & Touche LLP

30 Rockefeller Plaza

New York, NY 10112

 

Fund Counsel

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

  

This report has been prepared for shareholders of Apollo Senior Floating Rate Fund Inc. and Apollo Tactical Income Fund Inc. (the “Funds”). The Funds mail one shareholder report to each shareholder address. If you would like more than one report, please call shareholder services at 1-888-301-3838 and additional reports will be sent to you.

 

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities, and the Funds’ proxy voting records for the most recent period ended June 30, 2015 are available (i) without charge, upon request, by calling 1-888-301-3838 and (ii) on the SEC’s website at http://www.sec.gov.

 

The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website at http://www.sec.gov and also may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the Public Reference Room may be obtained by calling 1-800-SEC-0330.

 

 

Privacy Policy

We recognize and respect your privacy expectations, whether you are a visitor to our website, a potential shareholder, a current shareholder or even a former shareholder.

Collection of Information. We may collect nonpublic personal information about you from the following sources:

 

   

Account applications and other forms, which may include your name, address and social security number, written and electronic correspondence and telephone contacts;

   

Website information, including any information captured through our use of “cookies”; and

   

Account history, including information about the transactions and balances in your accounts with us or our affiliates.

Disclosure of Information. We may share the information we collect with our affiliates. We may also disclose this information as otherwise permitted by law. We do not sell your personal information to third parties for their independent use.

Confidentiality and Security of Information. We restrict access to nonpublic personal information about you to our employees and agents who need to know such information to provide products or services to you. We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information, although you should be aware that data protection cannot be guaranteed.

 

48  |  Semi-Annual Report


 

 

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LOGO

9 West 57th Street, New York, NY 10019

1-888-301-3838  •  www.agmfunds.com

06/30/15


Item 2. Code of Ethics.

Not applicable to this filing.

Item 3. Audit Committee Financial Expert.

Not applicable to this filing.

Item 4. Principal Accountant Fees and Services.

Not applicable to this filing.

Item 5. Audit Committee of Listed Registrants.

Not applicable to this filing.

Item 6. Investments.

 

(a)

Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this Form.

 

(b)

Not applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.

 

Item 7.

Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to this filing.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

There has been no change, as of the date of this filing, in any of the portfolio managers identified in response to paragraph (a)(1) of this Item in the registrant’s most recently filed annual report on Form N-CSR.


Item 9.

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

None in the reporting period.

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors implemented since the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.

Item 11. Controls and Procedures.

 

  (a)

The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

 

  (b)

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the registrant’s second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits.

 

(a)(1)

   Not applicable.

(a)(2)

   Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

(a)(3)

   Not applicable.

(b)

   Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant)

       

Apollo Senior Floating Rate Fund Inc.

  

By (Signature and Title)

        /s/ Joseph Moroney   
      Joseph Moroney, President   
      (principal executive officer)   

Date

  

    August 21, 2015

       

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)

        /s/ Joseph Moroney   
      Joseph Moroney, President   
      (principal executive officer)   

Date

  

    August 21, 2015

       

By (Signature and Title)

        /s/ Frank Marra   
      Frank Marra, Treasurer and Chief Financial Officer   
      (principal financial officer)   

Date

  

    August 21, 2015