Apollo Tactical Income 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                           811-22591                                  

 

   

Apollo Tactical Income 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, 2018

 


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, 2018

    (unaudited)

 



 

TABLE OF CONTENTS

 

Manager Commentary

     4  

Financial Data

  

Apollo Senior Floating Rate Fund Inc.

     5  

Apollo Tactical Income Fund Inc.

     6  

Schedules of Investments

  

Apollo Senior Floating Rate Fund Inc.

     7  

Apollo Tactical Income Fund Inc.

     16  

Statements of Assets and Liabilities

     25  

Statements of Operations

     26  

Statements of Changes in Net Assets

  

Apollo Senior Floating Rate Fund Inc.

     27  

Apollo Tactical Income Fund Inc.

     28  

Statements of Cash Flows

  

Apollo Senior Floating Rate Fund Inc.

     29  

Apollo Tactical Income Fund Inc.

     30  

Financial Highlights

  

Apollo Senior Floating Rate Fund Inc.

     31  

Apollo Tactical Income Fund Inc.

     32  

Notes to Financial Statements

     33  

Additional Information

     48  

Important Information About This Report

     52  

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

As of June 30, 2018 (unaudited)

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 2018 has represented a more volatile, yet more advantageous, environment for investing in the leveraged loan and high-yield markets than was experienced in 2017. While the latter represented a generally benign experience without substantial volatility or any real periodic weakness, the first half of 2018 has seen elevated levels of volatility due to two primary factors. First, as rates began to move higher in the beginning of the year, high-yield funds started to experience substantial outflows that were magnified by a concurrent spike in volatility in the equity markets. While the effect of this was concentrated, or felt most acutely, in February and March which saw the worst monthly return figures for the high-yield market so far this year, the effects have lingered in the form of extended outflows from high-yield mutual funds (through June 27th, the year-to-date outflow from high-yield mutual funds stood at roughly $18.6Bn) and, in practice, higher coupons and yields in the primary market as any new deals are generally pricing wider than similarly rated deals would have last year, all else equal. Secondly, while technicals in the loan market have been robust all year, as expressed by both inflows into floating-rate loan mutual funds and new CLO creation, the supply of new loans to the market has been similarly high and has run, at times, in greater volumes than the market can easily absorb. This supply is a function of both the aforementioned rate-related weakness in high-yield, which has pressed borrowers into different markets, and a buildup of capital at private equity firms that is increasingly being put to work, accompanied by the raising of new debt. Regardless of the reasons for it, during periods of relative oversupply such as we’ve experienced in the loan market during portions of 2018, particularly in June, we’ve seen higher yields and a move lower in secondary prices that’s benefitted the overall returns for the Funds.

Fundamentally, underlying credit performance across the Funds, and the broader market, has been generally benign. While we continue to see pressure on certain industries as different business models are challenged by technology (with Retail the obvious and continued outlier), this trend is also continuing to develop in a manner more nuanced than sometimes represented. The default rate of the broadest leveraged loan index (S&P/LSTA Leveraged Loan Index) fell for a third straight month in June to 1.95%, down from a three-year high of 2.42% at the end of the first quarter of 2018 and remains well inside the 3% historical average. While we are seeing instances of margin pressure at certain borrowers in our portfolios on labor or transportation costs, top-line performance is generally strong as would be expected given the broader economic backdrop and consumer-specific data. As such, in this situation where the supply of loans even into relatively strong demand conditions is driving yields higher for performing credits, our investment opportunity set is generally robust and we have in many cases taken advantage of these higher yields.

Over the second half of the year, particularly for the period after this summer, we expect similar supply conditions in the leveraged loan market to weigh on the potential for spread tightening and continue to create the kind of attractive investment opportunities we’ve increasingly been seeing of late. In periods of good fundamental performance and which lack any real obvious catalyst for financial degradation, the Funds will seek to use imbalances in supply and demand to maximize returns while remaining focused on limiting credit risk. We continue to remain very focused on the impact of inflationary pressures in a number of areas on the performance of borrowers across various industries, primarily with regards to the cost of labor and transit, and will remain vigilant in doing what we can to limit the creep higher in leverage to negatively impact positions in the Funds, but reiterate that we see market conditions such as these where competition for loans is limited by a surplus of supply as one of the more relatively attractive opportunity investments in these markets.

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

Sincerely,

Apollo Credit Management, LLC

 

4  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Financial Data

As of June 30, 2018 (unaudited)

 

   Portfolio Composition (as % of Current Market

   Value of Investment Securities)

 
  

Loans

     88.5%    

High Yield Bonds

     10.2%  

Equity/Other

     1.3%  
  
   Portfolio Characteristics (a)     
  

Weighted Average Floating-Rate Spread

     4.50%  

Weighted Average Fixed-Rate Coupon

     6.81%  

Weighted Average Maturity (in years) (floating assets)

     4.96  

Weighted Average Maturity (in years) (fixed assets)

     6.00  

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

     4.31  

Average Position Size

   $ 2,101,518  

Number of Positions

     204  

Weighted Average S&P Rating(h)

     B  

Weighted Average Rating Factor (Moody’s)(h)

     3,102  
  
   Credit Quality (b)     
  

BBB

     0.6%  

BB

     7.9%  

B

     71.3%  

CCC+ or Lower

     15.9%  

Not Rated

     4.3%  
  

   Top 5 Industries (as % of Current Market Value of

   Investment Securities) (c)

 
  

Healthcare & Pharmaceuticals

     17.1%  

High Tech Industries

     13.4%  

Services: Business

     9.9%  

Telecommunications

     9.7%  

Media: Broadcasting & Subscription

     6.6%  

Total

     56.7%  

   Top 10 Issuers (as % of Current Market Value of

   Investment Securities) (d)

 
  

Community Health Systems, Inc.

     1.9%    

Vertafore, Inc.

     1.9%  

Univision Communications, Inc.

     1.9%  

Intelsat Jackson Holdings S.A.

     1.8%  

Evergreen Skill Lux. S.A.R.L.

     1.8%  

ION Trading Finance, Ltd.

     1.7%  

Frontier Communications Corp.

     1.6%  

Valeant Pharmaceuticals International, Inc.

     1.5%  

Riverbed Technology, Inc.

     1.5%  

One Call Corp.

     1.4%  

Total

     17.0%  

 

   Performance Comparison       
  
     YTD      5 Yr      Since 
Inception(i)  
        

AFT - Market Price

     4.16%(e)        3.47%(e)(f)        4.37%(e)(f)  

AFT - NAV

     2.01%(e)        5.93%(e)(f)        6.11%(e)(f)  

S&P/LSTA Leveraged
Loan Index (g)

     2.16%        4.00%(f)        4.18%(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, 2018. The quality ratings reflected were issued by S&P Global Ratings (“S&P”), an internationally 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”), an internationally 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.

(h)

Excludes securities with no rating or in default as of June 30, 2018.

(i)

Inception date February 23, 2011.

 

Semi-Annual Report  |  5


Apollo Tactical Income Fund Inc.

Financial Data

As of June 30, 2018 (unaudited)

 

   Portfolio Composition (as % of Current Market

   Value of Investment Securities)

 
  

Loans

     76.8%    

High Yield Bonds

     13.4%  

Structured Products

     8.6%  

Equity/Other

     1.2%  
  
   Portfolio Characteristics (a)  
  

Weighted Average Floating-Rate Spread

     4.89%  

Weighted Average Fixed-Rate Coupon

     6.35%  

Weighted Average Maturity (in years) (floating assets)

     5.48  

Weighted Average Maturity (in years) (fixed assets)

     6.07  

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

     4.56  

Average Position Size

   $ 1,962,253  

Number of Positions

     200  

Weighted Average S&P Rating(h)

     B  

Weighted Average Rating Factor (Moody’s)(h)

     3,023  
  
   Credit Quality (b)  
  

BBB

     0.5%  

BB

     11.1%  

B

     63.0%  

CCC+ or Lower

     15.4%  

Not Rated

     10.0%  
  

   Top 5 Industries (as % of Current Market Value of

   Investment Securities) (c)

 
  

Healthcare & Pharmaceuticals

     18.2%  

High Tech Industries

     12.2%  

Telecommunications

     9.2%  

Services: Business

     8.2%  

Banking, Finance, Insurance & Real Estate

     5.8%  

Total

     53.6%  

   Top 10 Issuers (as % of Current Market Value of

   Investment Securities) (d)

 
        

Community Health Systems, Inc.

 

     2.1 %   

Univision Communications, Inc.

 

     2.0

Intelsat Jackson Holdings S.A.

 

     2.0

Evergreen Skills Lux. S.A.R.L.

 

     2.0

ION Trading Finance, Ltd.

 

     1.8

TIAA Churchill Middle Market CLO

 

     1.6

Opal Acquisition, Inc.

 

     1.5

DigiCert Holding, Inc.

 

     1.5

Frontier Communications Corp.

 

     1.5

Anchor Glass Container Corp.

 

     1.4

Total

 

     17.4
        
   Performance Comparison  
        
      YTD       5 Yr     

Since

Inception(i)

        

AIF - Market Price

     2.92%(e)        6.45%(e)(f)            4.29%(e)(f)  

AIF - NAV

     3.26%(e)        7.79%(e)(f)            7.28%(e)(f)  

S&P/LSTA Leveraged
Loan Index (g)

     2.16%        4.00%(f)            3.94%(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, 2018. The quality ratings reflected were issued by S&P, an internationally 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, an internationally recognized statistical rating organization. The Top 5 Industries table above excludes Structured Products which represent 8.6% of the portfolio as of June 30, 2018.

(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.

(h)

Excludes securities with no rating or in default as of June 30, 2018.

(i)

Inception date February 25, 2013.

 

6  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments

June 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Senior Loans - 130.5%(a)

   

AEROSPACE & DEFENSE - 4.2%

   

 

MRO Holdings, Inc.
Initial Term Loan, (LIBOR + 5.25%, 1.00% Floor), 7.58%, 10/25/23(b)

  597,000       601,478    

PAE Holding Corp.
First Lien Initial Term Loan, (LIBOR + 5.50%, 1.00% Floor), 7.59%,
10/20/22(b)

  1,912,787       1,923,546    

Second Lien Initial Term Loan, (LIBOR + 9.50%, 1.00% Floor), 11.59%, 10/20/23(b)

  1,324,023       1,332,298    

Photonis Technologies SAS (France)

     

First Lien Initial Dollar Term Loan, (LIBOR + 7.50%, 1.00% Floor), 9.83%, 09/18/19(b)(c)(d)

  2,856,480       2,523,229    

StandardAero Aviation Holdings, Inc.

     

Initial Term Loan, (LIBOR + 3.75%, 1.00% Floor), 5.84%, 07/07/22(b)

  5,005,427       5,019,517    
            11,400,068    

 

AUTOMOTIVE - 3.6%

     

 

American Tire Distributors, Inc.
Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.34%, 09/01/21(b)(d)

  3,490,979       2,288,773    

AP Exhaust Acquisition, LLC
First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.36%,
05/10/24(b)

  5,304,404       5,211,577    

Innovative XCessories & Services, LLC

     

Term Loan, (LIBOR + 4.75%, 1.00% Floor), 6.84%, 11/29/22(b)

  2,231,676       2,234,465    
   

 

 

   
      9,734,815    
   

 

 

   

 

BANKING, FINANCE, INSURANCE & REAL ESTATE - 6.7%  

 

 

 

Asurion, LLC
Replacement Term Loan B-6, (LIBOR + 2.75%, 0.00% Floor), 4.84%, 11/03/23(b)

  1,948,853       1,948,502    

Second Lien Replacement Term Loan B-2, (LIBOR + 6.00%, 0.00% Floor), 8.09%, 08/04/25(b)(d)

  2,636,429       2,679,271    

CRCI Holdings, Inc.
Initial Term Loan, (LIBOR + 5.50%, 1.00% Floor), 8.17%, 08/31/23(b)

  2,086,480       2,089,088    

Edelman Financial Holdings II, Inc.
First Lien Term Loan B, (LIBOR + 3.25%, 0.00% Floor), 3.25%,
06/26/25(b)(d)

  1,433,691       1,433,698    

Second Lien Term Loan, (LIBOR + 6.75%, 0.00% Floor), 6.75%,
06/26/26(b)(d)

  500,000       504,923    

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

BANKING, FINANCE, INSURANCE & REAL ESTATE (continued)

 

 

 

Mayfield Agency Borrower, Inc.
First Lien Term Loan B, (LIBOR + 4.50%, 0.00% Floor), 6.59%, 02/28/25(b)

  2,398,239       2,404,235    

Medical Card System, Inc.
Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 08/31/19(b)(e)

  5,039,600       4,465,411    

Mitchell International, Inc.
Second Lien Initial Term Loan, (LIBOR + 7.25%, 0.00% Floor), 9.34%, 12/01/25(b)

  1,000,000       1,002,815    

SG Acquisition, Inc.
Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.33%, 03/29/24(b)

  1,948,212       1,955,518    
            18,483,461    
   

 

 

   

 

BEVERAGE, FOOD & TOBACCO - 2.0%

 

 

 

The Chef’s Warehouse, Inc.
Term Loan, (LIBOR + 4.00%, 1.00% Floor), 6.09%, 06/22/22(b)

  1,070,584       1,080,621    

JBS, S.A.
Initial Term Loan, (LIBOR + 2.50%, 0.75% Floor), 4.83%, 10/30/22(b)

  533,433       530,099    

Winebow Holdings, Inc.
First Lien Term Loan, (LIBOR + 3.75%, 1.00% Floor), 5.84%, 07/01/21(b)

  1,873,984       1,761,545    

Second Lien Term Loan, (LIBOR + 7.50%, 1.00% Floor), 9.59%, 01/02/22(b)

  2,260,897       2,057,416    
   

 

 

   
      5,429,681    
   

 

 

   

 

CAPITAL EQUIPMENT - 0.5%

   

 

Safe Fleet Holdings, LLC
Second Lien Initial Term Loan, (LIBOR + 6.75%, 1.00% Floor), 8.74%,
02/02/26(b)(d)

  1,403,846       1,406,183    
   

 

 

   

 

CHEMICALS, PLASTICS, & RUBBER - 2.6%  

 

 

 

Archroma Finance S.A.R.L (Luxembourg)
Facility B-2, (LIBOR + 4.25%, 0.00% Floor), 6.59%, 08/12/24(b)(c)

  2,111,270       2,109,961    

Diamond (BC) B.V.
Initial Term Loan, (LIBOR + 3.00%, 0.00% Floor), 5.10%, 09/06/24(b)(d)

  2,171,128       2,138,561    

PetroChoice Holdings, Inc.
First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.10%, 08/19/22(b)

  987,124       992,060    
 

 

See accompanying Notes to Financial Statements.  |  7


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments (continued)

June 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

 

Senior Loans(a) (continued)

 

   

CHEMICALS, PLASTICS, & RUBBER (continued)

 

 

 

Vantage Specialty Chemicals, Inc.
First Lien Closing Date Term Loan, (LIBOR + 4.00%, 1.00% Floor), 6.12%, 10/28/24(b)

  997,494       1,005,389    

Second Lien Initial Loan, (LIBOR + 8.25%, 1.00% Floor), 10.35%, 10/27/25(b)

  1,000,000       1,007,920    
   

 

 

   
      7,253,891    
   

 

 

   

 

CONSTRUCTION & BUILDING - 3.0%

 

   

Associated Asphalt Partners, LLC
Tranche B Term Loan, (LIBOR + 5.25%, 1.00% Floor), 7.34%,
04/05/24(b)

  997,119       976,972    

KBR, Inc.
Term Loan B, (LIBOR + 3.75%, 0.00% Floor), 5.84%,
04/25/25(b)

  4,439,678       4,453,552    

Morsco, Inc.
Initial Term Loan, (Prime + 6.00%, 1.00% Floor), 11.00%, 10/31/23(b)

  936,677       955,411    

Terra Millennium Corp.
First Out Term Loan, (LIBOR + 6.25%, 1.00% Floor), 8.38%, 10/31/22(b)(e)

  1,925,000       1,939,438    
   

 

 

   
      8,325,373    
   

 

 

   

 

CONSUMER GOODS: DURABLE - 0.7%

 

   

PT Holdings, LLC
First Lien Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 6.33%,
12/09/24(b)

  1,319,194       1,320,018    

Second Lien Initial Loan, (LIBOR + 8.00%, 1.00% Floor), 10.33%, 12/08/25(b)

  625,000       632,813    
   

 

 

   
              1,952,831    
   

 

 

   

 

CONSUMER GOODS: NON-DURABLE - 5.2%

 

   

ABG Intermediate Holdings 2, LLC
First Lien Initial Term Loan, (LIBOR + 3.50%, 1.00% Floor), 5.59%,
09/27/24(b)(d)

  3,650,006       3,644,677    

Second Lien Initial Term Loan, (LIBOR + 7.75%, 1.00% Floor), 9.84%, 09/29/25(b)(d)

  1,347,817       1,351,187    

American Greetings, Corp.
Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 6.59%, 04/06/24(b)

  3,412,221       3,442,078    

LTI Holdings, Inc.
First Lien Initial Term Loan, (LIBOR + 4.75%, 1.00% Floor), 6.85%,
05/16/24(b)

  4,017,374       4,019,885    
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

 

CONSUMER GOODS: NON-DURABLE (continued)

 

 

 

Parfums Holding Co., Inc.
First Lien Initial Term Loan, (LIBOR + 4.75%, 1.00% Floor), 6.84%, 06/30/24(b)

  1,754,644       1,775,112    
   

 

 

   
      14,232,939    
   

 

 

   

 

CONTAINERS, PACKAGING & GLASS - 3.3%

   

 

Anchor Glass Container Corp.
July 2017 Additional Term Loan, (LIBOR + 2.75%, 1.00% Floor), 4.82%,
12/07/23(b)(d)

  4,599,922       4,183,054    

Second Lien Term Loan, (LIBOR + 7.75%, 1.00% Floor), 9.81%, 12/07/24(b)

  2,006,180       1,366,710    

Hoover Group, Inc.
First Lien Initial Term Loan, (LIBOR + 7.25%, 1.00% Floor), 9.58%,
01/28/21(b)(e)

  1,447,069       1,410,892    

SMI Acquisition, Inc.
First Lien Initial Term Loan, (LIBOR + 3.75%, 1.00% Floor), 6.11%,
11/01/24(b)(e)

  1,044,750       1,021,243    

Sprint Industrial Holdings, LLC
First Lien Term Loan, (LIBOR + 5.75%, 1.25% Floor), 8.08%, 05/14/19(b)

  1,044,554       1,015,829    
   

 

 

   
              8,997,728    
   

 

 

   

 

ENERGY: OIL & GAS - 2.5%

 

     

Ascent Resources - Marcellus, LLC
Exit Term Loan, (LIBOR + 6.50%, 1.00% Floor), 8.50%, 03/30/23(b)

  452,027       453,722    

Azure Midstream Energy, LLC
Term Loan, (LIBOR + 7.50%, 1.00% Floor), 9.25%, 11/15/18(b)

  402,376       394,328    

HGIM Corp.
Senior Secured Term Loan A, (Prime + 3.25%, 1.00% Floor), 8.25%,
06/18/18(b)(f)(g)

  2,677,236       1,151,211    

Oryx Southern Delaware Holdings, LLC
Initial Term Loan, (LIBOR + 3.25%, 1.00% Floor), 5.34%, 02/28/25(b)

  3,057,351       3,026,778    

Sheridan Investment Partners I, LLC
Deferred Principal Facility I, 10/01/19(e)(f)

  4,749       2,850    

Tranche B-2 Term Loan, (LIBOR + 3.50%, 0.75% Floor), 5.82%, 10/01/19(b)

  1,622,380       1,438,507    

Sheridan Production Partners I-A, L.P.
Deferred Principal Facility I-A,
10/01/19(e)(f)

  629       378    

Tranche B-2 Term Loan, (LIBOR + 3.50%, 0.75% Floor), 5.82%, 10/01/19(b)

  214,979       190,614    
 

 

8  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments (continued)

June 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

 

Senior Loans(a) (continued)

   

ENERGY: OIL & GAS (continued)

 

   

Sheridan Production Partners I-M, L.P.
Deferred Principal Facility I-M, 10/01/19(e)(f)

  384       231    

Tranche B-2 Term Loan, (LIBOR + 3.50%, 0.75% Floor), 5.82%,
10/01/19(b)

  131,310       116,428    

Southcross Holdings Borrower, L.P.
Tranche B Term Loan (5.50% PIK), 9.00%, 04/13/23(h)(i)

  128,580       123,115    
   

 

 

   
              6,898,162    
   

 

 

   

 

ENVIRONMENTAL INDUSTRIES - 1.1%

   

 

Emerald 2, Ltd. (United Kingdom)
Facility B-1, (LIBOR + 4.00%, 1.00% Floor), 6.33%, 05/14/21(b)(c)

  3,091,110       3,094,974    
   

 

 

   

 

HEALTHCARE & PHARMACEUTICALS - 21.8%

 

 

 

Akorn, Inc.
Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.38%, 04/16/21(b)(d)

  3,769,533       3,702,002    

Argon Medical Devices Holdings, Inc.
First Lien Initial Term Loan, (LIBOR + 3.75%, 0.00% Floor), 5.84%,
01/23/25(b)

  1,559,920       1,566,753    

BioClinica Holding I, LP
First Lien Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.63%,
10/20/23(b)

  2,206,622       2,104,566    

BW NHHC HoldCo, Inc.
First Lien Initial Term Loan, (LIBOR + 5.00%, 0.00% Floor), 7.07%,
05/15/25(b)(d)

  2,043,404       2,022,980    

Community Health Systems, Inc.
Incremental 2019 Term Loan G, (LIBOR + 3.00%, 1.00% Floor), 5.31%,
12/31/19(b)(d)

  1,948,561       1,948,259    

Incremental 2021 Term Loan H, (LIBOR + 3.25%, 1.00% Floor), 5.56%, 01/27/21(b)(d)

  3,974,695       3,887,768    

CT Technologies Intermediate Hldgs, Inc.
Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.34%, 12/01/21(b)

  3,967,787       3,766,085    

Endo Luxembourg Finance I Co.
S.A.R.L
Initial Term Loan, (LIBOR + 4.25%, 0.75% Floor), 6.38%, 04/29/24(b)

  2,992,443       2,992,443    
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

 

HEALTHCARE & PHARMACEUTICALS (continued)

 

 

 

Hanger, Inc.
Term Loan B, (LIBOR + 3.50%, 0.00% Floor), 5.59%, 03/06/25(b)(e)

  1,927,816       1,925,407    

Inovalon Holdings, Inc.
Term Loan, (LIBOR + 3.50%, 0.00% Floor), 5.56%, 04/02/25(b)

  4,000,000       3,902,500    

Lanai Holdings II, Inc.
First Lien Initial Term Loan, (LIBOR + 4.75%, 1.00% Floor), 7.11%,
08/29/22(b)(d)

  4,225,550       4,045,964    

Lanai Holdings III, Inc.
Second Lien Initial Term Loan, (LIBOR + 8.50%, 1.00% Floor), 10.86%, 08/28/23(b)

  869,565       834,782    

Lantheus Medical Imaging, Inc.
New Term Loan B 2017, (LIBOR + 3.75%, 1.00% Floor), 5.84%,
06/30/22(b)

  1,038,218       1,045,356    

Medical Solutions Holdings, Inc.
First Lien Closing Date Term Loan, (LIBOR + 3.75%, 1.00% Floor), 5.84%, 06/14/24(b)

  2,970,670       2,973,150    

Second Lien Closing Date Loan, (LIBOR + 8.25%, 1.00% Floor), 10.34%, 06/16/25(b)

  2,000,000       2,008,750    

MModal, Inc.
Term Loan B, (LIBOR + 4.75%, 1.00% Floor), 7.27%, 02/13/23(b)

  2,030,625       2,023,020    

NMSC Holdings, Inc.
First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.45%,
04/19/23(b)

  561,524       559,418    

One Call, Corp.
First Lien Extended Term Loan, (LIBOR + 5.25%, 1.00% Floor), 7.32%, 11/27/22(b)(d)

  5,985,012       5,745,612    

Onex TSG Intermediate Corp.
First Lien Initial Term Loan, (LIBOR + 4.00%, 1.00% Floor), 6.09%,
07/29/22(b)

  2,000,000       1,992,510    

PharMerica Corp.
First Lien Initial Term Loan, (LIBOR + 3.50%, 0.00% Floor), 5.55%,
12/06/24(b)

  1,728,192       1,729,004    

Quorum Health Corp.
Term Loan, (LIBOR + 6.75%, 1.00% Floor), 8.84%, 04/29/22(b)

  2,625,255       2,675,134    

Team Health Holdings, Inc.
Initial Term Loan, (LIBOR + 2.75%, 1.00% Floor), 4.84%, 02/06/24(b)

  3,903,762       3,762,251    

U.S. Renal Care, Inc.
First Lien Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.58%,
12/30/22(b)(d)

  2,494,130       2,461,906    
   

 

 

   
              59,675,620    
   

 

 

   
 

 

See accompanying Notes to Financial Statements.  |  9


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments (continued)

June 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Senior Loans(a) (continued)

   

HIGH TECH INDUSTRIES - 18.7%

   

 

DigiCert, Inc.
First Lien Term Loan, (LIBOR + 4.75%, 1.00% Floor), 6.84%, 10/31/24(b)(d)

  4,188,366       4,190,984    

Second Lien Term Loan, (LIBOR + 8.00%, 1.00% Floor),
10.09%, 10/31/25(b)

  1,514,727       1,483,486    

Flexera Software, LLC
First Lien Initial Term Loan, (LIBOR + 3.25%, 1.00% Floor), 5.35%, 02/26/25(b)

  1,080,893       1,080,390    

Second Lien Initial Term Loan, (LIBOR + 7.25%, 1.00% Floor), 9.35%,
02/26/26(b)

  1,192,308       1,195,289    

Gigamon, Inc.
First Lien Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 6.83%,
12/27/24(b)

  1,705,714       1,720,639    

Help/Systems Holdings, Inc.
First Lien Term Loan, (LIBOR + 3.75%, 0.00% Floor), 5.84%, 03/28/25(b)

  2,598,595       2,601,843    

ION Trading Finance, Ltd. (Ireland)
Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%, 11/21/24(b)(c)(d)

  6,748,795       6,706,615    

Ivanti Software, Inc.
First Lien Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.35%, 01/20/24(b)

  3,978,576       3,951,244    

MA FinanceCo., LLC
Tranche B-3 Term Loan, (LIBOR + 2.75%, 0.00% Floor), 4.84%, 06/21/24(b)

  257,312       256,749    

Ocean Bidco, Inc.
Initial Dollar Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.33%, 03/21/25(b)

  1,093,051       1,099,883    

Riverbed Technology, Inc.
First Amendment Term Loan, (LIBOR + 3.25%, 1.00% Floor), 5.35%, 04/24/22(b)

  3,968,559       3,927,464    

Seattle SpinCo, Inc.
Initial Term Loan, (LIBOR + 2.75%, 0.00% Floor), 4.84%, 06/21/24(b)

  1,737,688       1,733,892    

SolarWinds Holdings, Inc.
2018 Refinancing Term Loan, (LIBOR + 3.00%, 0.00% Floor), 5.09%, 02/05/24(b)

  2,366,913             2,368,877    

SS&C European Holdings, S.A.R.L (Luxembourg)
Term Loan B-4, (LIBOR + 2.50%, 0.00% Floor), 4.59%, 04/16/25(b)(c)

  729,689       730,751    

SS&C Technologies, Inc.
Term Loan B-3, (LIBOR + 2.50%, 0.00% Floor), 4.59%, 04/16/25(b)

  1,928,797       1,931,604    
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

HIGH TECH INDUSTRIES (continued)

 

 

 

Syncsort, Inc.
First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor),
7.09%, 08/16/24(b)(d)

  3,062,329       3,075,742    

Second Lien Initial Term Loan, (LIBOR + 9.00%, 1.00% Floor),
11.09%, 08/18/25(b)

  2,000,000       1,976,880    

Triple Point Group Holdings, Inc.
First Lien Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.34%, 07/10/20(b)

  3,943,972       3,552,868    

Vertafore, Inc.
First Lien Term Loan, (LIBOR + 3.25%, 0.00% Floor), 5.34%, 06/04/25(b)(d)

  3,999,783       3,979,384    

Second Lien Term Loan, (LIBOR + 7.25%, 0.00% Floor), 7.25%,
06/04/26(b)(d)

  3,720,000       3,701,400    
   

 

 

   
      51,265,984    
   

 

 

   

 

HOTEL, GAMING & LEISURE - 3.8%  

 

 

 

Everi Payments, Inc.
New Term Loan B, (LIBOR + 3.00%, 1.00% Floor), 5.09%, 05/09/24(b)

  1,780,725       1,782,577    

Mohegan Tribal Gaming Authority
Term Loan A, (LIBOR + 3.75%, 0.00% Floor), 5.84%, 10/13/21(b)

  503,517       489,041    

Scientific Games International, Inc.
Initial Term Loan B-5, (LIBOR + 2.75%, 0.00% Floor), 4.91%, 08/14/24(b)

  2,836,250       2,821,189    

SeaWorld Parks & Entertainment, Inc.
Term Loan B-2, (LIBOR + 2.25%, 0.75% Floor), 4.34%, 05/14/20(b)(d)

  1,978,314       1,972,745    

Term Loan B-5, (LIBOR + 3.00%, 0.75% Floor), 5.09%, 04/01/24(b)(d)

  3,487,393       3,467,776    
   

 

 

   
            10,533,328    
   

 

 

   

 

MEDIA: ADVERTISING, PRINTING & PUBLISHING - 3.4%  

 

 

 

Acosta, Inc.
Tranche B-1 Loan, (LIBOR + 3.25%, 1.00% Floor), 5.34%, 09/26/21(b)

  1,992,288       1,510,403    

Advantage Sales & Marketing, Inc.
First Lien Initial Term Loan, (LIBOR + 3.25%, 1.00% Floor), 5.34%, 07/23/21(b)

  3,479,348       3,298,874    

Incremental Term Loan B-2, (LIBOR + 3.25%, 1.00% Floor), 5.34%, 07/23/21(b)

  1,063,024       1,007,656    

Second Lien Term Loan, (LIBOR + 6.50%, 1.00% Floor), 8.59%, 07/25/22(b)

  1,500,000       1,373,753    
 

 

10  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments (continued)

June 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Senior Loans(a) (continued)

   

MEDIA: ADVERTISING, PRINTING & PUBLISHING (continued)

 

 

 

F & W Media, Inc.
Term Loan B-1 (8.60% PIK), (LIBOR + 6.50%, 1.50% Floor), 8.60%,
05/24/22(b)(e)(i)

  325,689       325,689    

Term Loan B-2 (12.10% PIK), (LIBOR + 10.00%, 1.50% Floor), 12.10%,
05/24/22(b)(e)(i)

  884,560       331,078    

Information Resources, Inc.
First Lien Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor),
6.57%, 01/18/24(b)

  1,485,000       1,487,324    
   

 

 

   
      9,334,777    
   

 

 

   

 

MEDIA: BROADCASTING & SUBSCRIPTION - 6.7%

 

 

 

Emmis Operating Co.
Term Loan, (LIBOR + 7.00%, 1.00% Floor), 9.10%, 04/18/19(b)

  227,950       224,531    

Global Eagle Entertainment, Inc.
Initial Term Loan, (LIBOR + 7.50%, 1.00% Floor), 9.36%, 01/06/23(b)

  4,919,794       5,034,598    

SESAC Holdco II, LLC
First Lien Initial Term Loan, (LIBOR + 3.00%, 1.00% Floor),
5.09%, 02/23/24(b)

  1,240,578       1,232,799    

Second Lien Initial Term Loan, (LIBOR + 7.25%, 1.00% Floor), 9.34%, 02/24/25(b)

  725,278       720,890    

Univision Communications, Inc.
2017 Replacement Term Loan, (LIBOR + 2.75%, 1.00% Floor), 4.84%, 03/15/24(b)(d)

  2,940,703       2,846,365    

Urban One, Inc.
Initial Term Loan, (LIBOR + 4.00%, 1.00% Floor), 6.10%, 04/18/23(b)

  1,458,378       1,437,414    

WideOpenWest Finance, LLC
Refinancing Term Loan B, (LIBOR + 3.25%, 1.00% Floor),
5.34%, 08/18/23(b)(d)

  2,493,719       2,387,736    

William Morris Endeavor Entertainment, LLC
New Term Loan B-1, (LIBOR + 2.75%, 0.00% Floor), 4.93%, 05/18/25(b)

  4,551,759       4,521,900    
   

 

 

   
            18,406,233    
   

 

 

   

MEDIA: DIVERSIFIED & PRODUCTION - 1.3%

 

 

 

A-L Parent, LLC
First Lien Initial Term Loan, (LIBOR + 3.25%, 1.00% Floor),
5.35%, 12/01/23(b)

  1,331,829       1,336,823    

Second Lien Initial Term Loan, (LIBOR + 7.25%, 1.00% Floor), 9.35%, 12/02/24(b)(e)

  375,000       378,750    
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

MEDIA: DIVERSIFIED & PRODUCTION (continued)

 

 

 

DHX Media, Ltd. (Canada)
Initial Term Loan, (Prime + 2.75%, 1.00% Floor), 7.75%, 12/29/23(b)(c)

  1,980,000       1,980,624    
   

 

 

   
      3,696,197    
   

 

 

   

 

METALS & MINING - 0.0%

     

Magnetation, LLC / Mag Finance Corp.
DIP Term Loan, 12.00%, 10/14/16(e)(f)(h)

  245,303          
   

 

 

   

 

RETAIL - 8.4%

     

Academy, Ltd.
Initial Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.99%, 07/01/22(b)

  1,945,382       1,624,121    

Albertson’s, LLC
Replacement 2017-1 Term Loan B-4, (LIBOR + 2.75%, 0.75% Floor), 4.84%, 08/25/21(b)

  3,352,664       3,325,239    

Replacement 2017-1 Term Loan B-5, (LIBOR + 3.00%, 0.75% Floor), 5.34%, 12/21/22(b)

  1,012,544       1,004,803    

Charming Charlie, LLC
Term Loan A (5.00% PIK), (LIBOR + 10.00%, 1.00% Floor), 12.36%,
04/24/23(b)(e)(i)

  774,824       254,265    

Term Loan B (9.00% PIK), (LIBOR + 10.00%, 1.00% Floor), 12.36%,
04/24/23(b)(e)(i)

  929,788       305,118    

EG America, LLC
Additional Facility Loan, (LIBOR + 4.00%, 0.00% Floor), 6.33%, 02/07/25(b)

  2,508,683       2,490,808    

General Nutrition Centers, Inc.
First In Last Out Term Loan, (LIBOR + 7.00%, 0.00% Floor), 9.10%, 12/31/22(b)

  572,350       592,279    

JC Penney Corp.
Term Loan B, (LIBOR + 4.25%, 1.00% Floor), 6.57%, 06/23/23(b)

  4,116,173       3,941,235    

Petco Animal Supplies, Inc.
Second Amendment Term Loan, (LIBOR + 3.25%, 1.00% Floor),
5.61%, 01/26/23(b)

  5,815,050       4,213,498    

PetSmart, Inc.
Tranche B-2 Loan, (LIBOR + 3.00%, 1.00% Floor), 5.01%, 03/11/22(b)

  2,901,039       2,405,643    

Sears Roebuck Acceptance Corp.
2017 Extended Term Loan, (LIBOR + 4.50%, 1.00% Floor), 6.50%, 01/18/19(b)

  1,463,211       1,461,997    

Vince, LLC
Initial Term Loan, (LIBOR + 7.00%, 1.00% Floor), 9.36%, 11/27/19(b)

  1,449,296       1,362,338    
   

 

 

   
            22,981,344    
   

 

 

   
 

 

See accompanying Notes to Financial Statements.  |  11


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments (continued)

June 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Senior Loans(a)  (continued)

   

SERVICES: BUSINESS - 14.7%

   

 

Access CIG, LLC
First Lien Term Loan, (LIBOR +
3.75%, 0.00% Floor), 5.84%,
02/27/25(b)(d)

  164,587       165,081    

First Lien Term Loan B, (LIBOR + 3.75%, 0.00% Floor),
5.84%, 02/27/25(b)(d)

  1,079,359               1,082,597    

Air Medical Group Holdings, Inc.
2017-2 New Term Loan, (LIBOR + 4.25%, 1.00% Floor),
6.34%, 03/14/25(b)

  2,257,107       2,230,304    

EIG Investors Corp.
2018 Refinancing Term Loan, (LIBOR + 3.75%, 1.00% Floor),
6.07%, 02/09/23(b)

  2,899,141       2,902,171    

Electro Rent Corp.
First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor),
7.33%, 01/31/24(b)

  2,087,262       2,102,917    

Evergreen Skills Lux S.A.R.L.
(Luxembourg)
First Lien Initial Term Loan,
(LIBOR + 4.75%, 1.00% Floor),
6.84%, 04/28/21(b)(c)

  6,000,000       5,690,610    

Second Lien Initial Term Loan, (LIBOR + 8.25%, 1.00% Floor), 10.34%, 04/28/22(b)(c)(d)

  2,000,000       1,680,720    

Explorer Holdings, Inc.
Initial Term Loan, (LIBOR + 3.75%, 1.00% Floor), 6.08%, 05/02/23(b)

  3,301,899       3,301,899    

GI Revelation Acquisition, LLC
First Lien Term Loan, (LIBOR + 5.00%, 0.00% Floor), 7.09%, 04/16/25(b)

  2,705,882       2,730,113    

Michael Baker International, LLC
Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 6.59%, 11/21/22(b)

  2,863,636       2,870,795    

National Intergovernmental
Purchasing Alliance Co.
First Lien Initial Term Loan,
(LIBOR + 3.75%, 0.00% Floor),
6.08%, 05/23/25(b)

  2,535,433       2,535,433    

Onex Carestream Finance, L.P.
Second Lien Term Loan, (LIBOR + 8.50%, 1.00% Floor), 10.59%, 12/07/19(b)

  2,143,089       2,145,768    

Paysafe Group PLC
Facility B-1, (LIBOR + 3.50%, 1.00% Floor), 5.59%, 01/03/25(b)

  1,693,182       1,673,076    
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

SERVICES: BUSINESS (continued)

   

 

R1 RCM, Inc.
Initial Term Loan, (LIBOR +
5.25%, 0.00% Floor), 7.62%,
05/08/25(b)(e)

  1,428,571       1,428,571    

SGS Cayman, L.P.
Initial Cayman Term Loan,
(LIBOR + 5.38%, 1.00% Floor),
7.71%, 04/23/21(b)

  780,295       751,034    

Solera, LLC
Dollar Term Loan, (LIBOR +
2.75%, 1.00% Floor), 4.84%,
03/03/23(b)

  1,088,379       1,084,978    

STG-Fairway Acquisitions, Inc.
First Lien Term Loan,
(LIBOR + 5.25%, 1.00% Floor),
7.34%, 06/30/22(b)

  2,577,911       2,577,911    

Sutherland Global Services, Inc.
Initial U.S. Term Loan, (LIBOR +
5.38%, 1.00% Floor), 7.71%,
04/23/21(b)

  3,352,109       3,226,405    
   

 

 

   
              40,180,383    
   

 

 

   

 

SERVICES: CONSUMER - 1.5%

   

Laureate Education, Inc.
Series 2024 Term Loan, (LIBOR + 3.50%, 1.00% Floor),
5.59%, 04/26/24(b)

  2,219,334       2,223,806    

USS Ultimate Holdings, Inc.
Second Lien Initial Term Loan, (LIBOR + 7.75%, 1.00% Floor),
9.84%, 08/25/25(b)

  1,884,615       1,898,750    
   

 

 

   
      4,122,556    
   

 

 

   

 

TELECOMMUNICATIONS - 13.0%

   

 

CenturyLink, Inc.
Initial Term Loan B, (LIBOR +
2.75%, 0.00% Floor),
4.84%, 01/31/25(b)

  2,485,006       2,437,891    

Flight Bidco, Inc.
Term Loan, (LIBOR + 3.50%, 0.00%
Floor), 3.50%, 06/19/25(b)(d)

  2,192,906       2,190,164    

Frontier Communications, Corp.
Initial Term Loan, (LIBOR + 2.75%, 0.00% Floor), 4.85%, 03/31/21(b)

  1,847,200       1,822,955    

Term Loan, (Prime + 3.38%, 0.00% Floor), 8.38%, 10/12/21(b)

  4,643,382       4,602,753    

Global Tel*Link Corp.
First Lien Term Loan, (LIBOR + 4.00%, 1.25% Floor), 6.33%, 05/23/20(b)

  2,933,146       2,949,029    
 

 

12  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments (continued)

June 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($)  

 

     

Senior Loans(a)   (continued)

   

TELECOMMUNICATIONS (continued)

   

 

Intelsat Jackson Holdings S.A.
(Luxembourg)
Tranche B-4 Term Loan, (LIBOR +
4.50%, 1.00% Floor), 6.60%,
01/02/24(b)(c)

  3,448,622       3,590,878    

Tranche B-5 Term Loan, 6.63%, 01/02/24(c)(h)

  3,748,810       3,877,994    

Securus Technologies Holdings, Inc.
First Lien Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 6.59%, 11/01/24(b)(d)

  2,287,069       2,301,363    

Second Lien Initial Term Loan, (LIBOR + 8.25%, 1.00% Floor), 10.34%, 11/01/25(b)

  549,280       551,889    

TDC A/S (Denmark)
USD Term Loan, (LIBOR + 3.50%,
0.00% Floor), 3.50%,
06/11/25(b)(c)(d)

  4,384,068       4,382,709    

TVC Albany, Inc.
Term Loan B, (LIBOR + 4.00%,
1.00% Floor), 6.09%, 09/18/24(b)

  581,747       583,201    

U.S. TelePacific Corp.
Advance Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.33%, 05/02/23(b)

  3,938,579       3,885,664    

Zacapa, LLC
Term Loan, (LIBOR + 5.00%, 0.75% Floor), 7.34%, 06/27/25(b)(d)

  2,333,333       2,333,333    
   

 

 

   
              35,509,823    
   

 

 

   

 

TRANSPORTATION: CONSUMER - 0.6%

   

 

Travel Leaders Group, LLC
New Incremental Term Loan, (LIBOR + 4.50%, 0.00% Floor), 7.00%, 01/25/24(b)

  1,731,440       1,744,426    
   

 

 

   

 

UTILITIES: ELECTRIC - 1.2%

   

 

Moxie Patriot, LLC
Construction B-1 Advances, (LIBOR + 5.75%, 1.00% Floor), 8.08%, 12/19/20(b)

  1,349,168       1,338,206    

Construction B-2 Advances, (LIBOR + 5.75%, 1.00% Floor), 8.08%, 12/19/20(b)

  1,937,087       1,921,348    
   

 

 

   
      3,259,554    
   

 

 

   

Total Senior Loans
(Cost $363,111,345)

      357,920,331    
   

 

 

   
   

Principal

 Amount ($) 

 

 

 Value ($)  

 

     

Corporate Notes and Bonds - 15.1%(h)

 

 

AUTOMOTIVE - 1.3%

     

 

Tesla, Inc.
5.30%, 08/15/25(j)

  4,000,000       3,575,000    
   

 

 

   

 

BEVERAGE, FOOD & TOBACCO - 0.7%

 

 

 

JBS, S.A.
6.75%, 02/15/28(j)

  1,000,000       945,950    

Sigma Holdco B.V. (Netherlands)
7.88%, 05/15/26(c)(j)

  1,000,000       942,500    
   

 

 

   
      1,888,450    
   

 

 

   

 

CONSUMER GOODS: NON-DURABLE - 0.2%

   

 

Mattel, Inc.
6.75%, 12/31/25(j)

  726,000       708,757    
   

 

 

   

 

CONTAINERS, PACKAGING & GLASS - 0.7%

   

 

Reynolds Group Holdings, Inc.
6.88%, 02/15/21

  1,069,068       1,083,767    

W/S Packaging Holdings, Inc.
9.00%, 04/15/23(j)

  801,000       813,015    
   

 

 

   
      1,896,782    
   

 

 

   

 

ENERGY: OIL & GAS - 1.7%

     

 

Moss Creek Resources Holdings, Inc.
7.50%, 01/15/26(j)

  4,762,000       4,684,617    
   

 

 

   

 

HEALTHCARE & PHARMACEUTICALS - 3.4%

   

 

Community Health Systems, Inc.
8.63%, 01/15/24(j)

  2,005,000       2,015,025    

Team Health Holdings, Inc.
6.38%, 02/01/25(j)

  1,500,000       1,297,500    

Valeant Pharmaceuticals

     

International, Inc. (Canada)

     

5.63%, 12/01/21(c)(j)

  1,500,000       1,481,250    

6.50%, 03/15/22(c)(j)

  1,500,000       1,558,125    

7.50%, 07/15/21(c)(j)

  2,864,000       2,914,120    
   

 

 

   
      9,266,020    
   

 

 

   

 

HIGH TECH INDUSTRIES - 1.1%

     

 

Infor Software Parent, LLC
(7.88% PIK), 7.13%, 05/01/21(i)(j)

  1,000,000       1,006,250    

Riverbed Technology, Inc.
8.88%, 03/01/23(j)

  2,000,000       1,903,500    
   

 

 

   
              2,909,750    
   

 

 

   

 

HOTEL, GAMING & LEISURE - 0.5%

   

 

Churchill Downs, Inc.
4.75%, 01/15/28(j)

  1,000,000       930,000    

Scientific Games Corp.
5.00%, 10/15/25(j)

  500,000       477,500    
   

 

 

   
      1,407,500    
   

 

 

   

 

MEDIA: BROADCASTING & SUBSCRIPTION - 3.0%

 

 

 

CSC Holdings, LLC

     

5.38%, 02/01/28(j)

  2,000,000       1,855,000    

10.13%, 01/15/23(j)

  105,000       116,025    

10.88%, 10/15/25(j)

  293,000       338,503    
 

 

See accompanying Notes to Financial Statements.  |  13


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments (continued)

June 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

 

Corporate Notes and Bonds(h) (continued)

 

 

 

MEDIA: BROADCASTING & SUBSCRIPTION (continued)

 

 

 

Univision Communications, Inc.

     

5.13%, 05/15/23(j)

  1,000,000       962,500    

5.13%, 02/15/25(j)

  4,000,000       3,705,000    

Urban One, Inc.

     

7.38%, 04/15/22(j)

  1,211,000       1,177,698    
   

 

 

   
      8,154,726    
   

 

 

   

 

METALS & MINING - 0.0%

 

     

ERP Iron Ore, LLC
LIBOR + 8.00%, 12/31/19(e)

  26,469       7,936    

Magnetation, LLC / Mag Finance Corp.
11.00%, 05/15/18(e)(f)(j)(k)

  639,000          
   

 

 

   
      7,936    
   

 

 

   

 

SERVICES: CONSUMER - 1.1%

 

     

NVA Holdings, Inc.
6.88%, 04/01/26(j)

  3,000,000       2,996,250    
   

 

 

   

 

TELECOMMUNICATIONS - 1.4%

 

     

Orbcomm, Inc.
8.00%, 04/01/24(j)

  3,694,000       3,878,700    
   

 

 

   

Total Corporate Notes and Bonds
(Cost $42,003,541)

              41,374,488    
   

 

 

   
   

Share

 Quantity 

 

 

 Value ($) 

 

 

 

Common Stocks - 0.4%

 

   

BANKING, FINANCE, INSURANCE & REAL ESTATE - 0.0%

 

 

Medical Card System, Inc.(e)(f)

 

 

991,230  

 

 

 

 

62,959

 

 

   

 

 

 

ENERGY: OIL & GAS - 0.4%

   

 

Ascent Resources Marcellus Holdings, Inc.(f)

  324,739       1,066,281  

Southcross Holdings Borrower, GP
LLC(e)(f)

  129        

Southcross Holdings Borrower, LP, Class A-II(e)(f)

  129       36,443  
   

 

 

 
      1,102,724  
   

 

 

 

 

MEDIA: ADVERTISING, PRINTING & PUBLISHING - 0.0%

 

 

F & W Media,Inc.(e)(f)

  9,510        
   

 

 

 

RETAIL - 0.0%

   

 

Charming Charlie, LLC(e)(f)

  8,890,519        
   

 

 

 

Total Common Stock
(Cost $1,101,275)

      1,165,683  
   

 

 

 

Preferred Stock - 1.5%

   

 

BANKING, FINANCE, INSURANCE & REAL ESTATE - 1.5%

 

 

Watford Holdings, Ltd. (Bermuda)
8.50% (c)(e)(j)

  160,000       3,942,277  
   

 

 

 

 

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

      3,942,277  
   

 

 

 

Warrants - 0.0%

   

 

ENERGY: OIL & GAS - 0.0%

 

   

Ascent Resources Marcellus Holdings, Inc.(e)(f)

  84,077       2,522  
   

 

 

 

Total Warrants
(Cost $8,408)

      2,522  
   

 

 

 

 

Total Investments-147.5%
(Cost of $410,144,569)

   

 

 

 

404,405,301

 

 

Other Assets & Liabilities, Net-3.9%

      10,595,746  

Loan Outstanding-(51.4)%(l)(m)

      (140,810,966 ) 
   

 

 

 

Net Assets (Applicable to Common Shares)-100.0%

              274,190,081  
   

 

 

 
 

 

14  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Schedule of Investments (continued)

June 30, 2018 (unaudited)

    

 

(a) 

“Senior Loans” are senior, secured loans made to companies whose debt is below investment grade as well as investments with similar economic characteristics. Senior Loans typically hold a first lien priority and, unless otherwise indicated, are required to pay interest at floating rates that are periodically reset by reference to a base lending rate plus a spread. In some instances, the rates shown represent the weighted average rate as of June 30, 2018. Senior Loans are generally not registered under the Securities Act of 1933 (the “1933 Act”) and often incorporate 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.

(b) 

The interest rate on this Senior Loan is subject to a 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 U.S. banks (“Prime”). The interest rate is subject to a minimum floor, which may be less than or greater than the prevailing period end LIBOR/Prime rate. As of June 30, 2018, the 1, 2, 3 and 6 month LIBOR rates were 2.09%, 2.17%, 2.34% and 2.50%, respectively, and the Prime lending rate was 5.00%. Senior Loans may contain multiple contracts of the same issuer which may be subject to base lending rates of both LIBOR and Prime (“Variable”) in addition to the stated spread.

(c) 

Foreign issuer traded in U.S. dollars.

(d) 

All or a portion of this Senior Loan position has not settled. Full contract rates do not take effect until settlement date and therefore are subject to change.

(e) 

Fair Value Level 3 security.

(f) 

Non-income producing asset.

(g) 

The issuer is in default of its payment obligations as of March 7, 2018, as such, income is no longer being accrued. This position subsequently restructured effective July 2, 2018.

(h) 

Fixed rate asset.

(i) 

Represents a payment-in-kind (“PIK”) security, which may pay interest in additional principal amount.

(j) 

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, 2018, these securities amounted to $44,225,062, or 16.13% of net assets.

(k) 

The issuer is in default of its payment obligations as of May 5, 2015, as such, income is no longer being accrued.

(l) 

The Fund has granted a security interest in substantially all of its assets in the event of default under the credit facility.

(m) 

Principal $141,000,000 less unamortized deferred financing costs of $189,034.

 

See accompanying Notes to Financial Statements.  |  15


Apollo Tactical Income Fund Inc.

Schedule of Investments

June 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Senior Loans - 113.9%(a)

 

 

AEROSPACE & DEFENSE - 2.6%

 

 

 

MRO Holdings, Inc.
Initial Term Loan, (LIBOR + 5.25%, 1.00% Floor), 7.58%, 10/25/23(b)

  597,000       601,478    

PAE Holding Corp.
First Lien Initial Term Loan, (LIBOR + 5.50%, 1.00% Floor), 7.59%,
10/20/22(b)

  1,912,787       1,923,546    

Second Lien Initial Term Loan, (LIBOR + 9.50%, 1.00% Floor), 11.59%, 10/20/23(b)

  1,404,834       1,413,614    

Photonis Technologies SAS (France)
First Lien Initial Dollar Term Loan, (LIBOR + 7.50%, 1.00% Floor), 9.83%, 09/18/19(b)(c)(d)

  2,856,480               2,523,229    
   

 

 

   
      6,461,867    
   

 

 

   

 

AUTOMOTIVE - 3.6%

     

 

American Tire Distributors, Inc.
Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.34%, 09/01/21(b)(d)

  2,493,557       1,634,838    

AP Exhaust Acquisition, LLC
First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor),
7.36%, 05/10/24(b)

  5,304,404       5,211,577    

Innovative XCessories & Services, LLC
Term Loan, (LIBOR + 4.75%, 1.00% Floor), 6.84%, 11/29/22(b)

  2,231,676       2,234,465    
   

 

 

   
      9,080,880    
   

 

 

   

 

BANKING, FINANCE, INSURANCE & REAL ESTATE - 6.4%

 

 

 

Asurion, LLC
Second Lien Replacement Term Loan B-2, (LIBOR + 6.00%, 0.00% Floor), 8.09%, 08/04/25(b)(d)

  1,594,072       1,619,976    

Term Loan B-7, (LIBOR + 3.00%, 0.00% Floor), 4.97%, 11/29/24(b)(d)

  1,000,000       997,500    

CRCI Holdings, Inc.
Initial Term Loan, (LIBOR + 5.50%, 1.00% Floor), 8.17%, 08/31/23(b)

  2,086,480       2,089,088    

Edelman Financial Holdings II, Inc.
First Lien Term Loan B, (LIBOR + 3.25%, 0.00% Floor), 3.25%,
06/26/25(b)(d)

  1,433,691       1,433,698    

Second Lien Term Loan, (LIBOR + 6.75%, 0.00% Floor), 6.75%,
06/26/26(b)(d)

  500,000       504,923    

Mayfield Agency Borrower, Inc.
First Lien Term Loan B, (LIBOR + 4.50%, 0.00% Floor), 6.59%,
02/28/25(b)

  2,398,239       2,404,235    
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

BANKING, FINANCE, INSURANCE & REAL ESTATE (continued)

 

 

 

Medical Card System, Inc.
Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 08/31/19(b)(e)

  4,651,939       4,121,918    

Mitchell International, Inc.
Second Lien Initial Term Loan, (LIBOR + 7.25%, 0.00% Floor), 9.34%, 12/01/25(b)

  1,000,000       1,002,815    

SG Acquisition, Inc.
Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.33%, 03/29/24(b)

  1,948,212       1,955,518    

SquareTwo Financial Corp.
Closing Date Term Loan, (LIBOR +10.00%, 1.00% Floor), 11.00%, 05/24/19(b)(e)(f)(g)

  1,003,755       35,819    
   

 

 

   
      16,165,490    
   

 

 

   

 

BEVERAGE, FOOD & TOBACCO - 2.3%

 

 

 

The Chef’s Warehouse, Inc.
Term Loan, (LIBOR + 4.00%, 1.00% Floor), 6.09%, 06/22/22(b)

  1,070,584       1,080,621    

JBS, S.A.
Initial Term Loan, (LIBOR + 2.50%, 0.75% Floor), 4.83%, 10/30/22(b)

  533,433       530,099    

Winebow Holdings, Inc.
First Lien Term Loan, (LIBOR + 3.75%, 1.00% Floor), 5.84%, 07/01/21(b)

  1,873,984       1,761,545    

Second Lien Term Loan, (LIBOR + 7.50%, 1.00% Floor),
9.59%, 01/02/22(b)

  2,505,795               2,280,273    
   

 

 

   
      5,652,538    
   

 

 

   

 

CAPITAL EQUIPMENT - 0.6%

     

 

Safe Fleet Holdings, LLC
Second Lien Initial Term Loan, (LIBOR + 6.75%, 1.00% Floor),
8.74%, 02/02/26(b)(d)

  1,403,846       1,406,183    
   

 

 

   

 

CHEMICALS, PLASTICS, & RUBBER - 2.9%

 

 

 

Archroma Finance S.A.R.L (Luxembourg)
Facility B-2, (LIBOR + 4.25%, 0.00% Floor), 6.59%, 08/12/24(b)(c)

  2,111,270       2,109,961    

Diamond (BC) B.V.
Initial Term Loan, (LIBOR + 3.00%, 0.00% Floor), 5.10%, 09/06/24(b)(d)

  2,171,128       2,138,561    

PetroChoice Holdings, Inc.
First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.10%, 08/19/22(b)

  987,124       992,060    
 

 

16  |  See accompanying Notes to Financial Statements.


Apollo Tactical Income Fund Inc.

Schedule of Investments (continued)

June 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Senior Loans(a) (continued)

 

 

CHEMICALS, PLASTICS, & RUBBER (continued)

 

 

 

Vantage Specialty Chemicals, Inc.
First Lien Closing Date Term Loan, (LIBOR + 4.00%, 1.00% Floor), 6.12%, 10/28/24(b)

  997,494     1,005,389    

Second Lien Initial Loan, (LIBOR + 8.25%, 1.00% Floor), 10.35%, 10/27/25(b)

  1,000,000     1,007,920    
   

 

 

   
      7,253,891    
   

 

 

   

 

CONSTRUCTION & BUILDING - 3.3%

 

 

 

Associated Asphalt Partners, LLC
Tranche B Term Loan, (LIBOR + 5.25%, 1.00% Floor), 7.34%,
04/05/24(b)

  997,119     976,972    

KBR, Inc.
Term Loan B, (LIBOR + 3.75%, 0.00% Floor), 5.84%,
04/25/25(b)

  4,439,678     4,453,552    

Morsco, Inc.
Initial Term Loan, (Prime + 6.00%, 1.00% Floor), 11.00%, 10/31/23(b)

  936,677     955,411    

Terra Millennium Corp.
First Out Term Loan, (LIBOR + 6.25%, 1.00% Floor), 8.38%, 10/31/22(b)(e)

  1,925,000     1,939,438    
   

 

 

   
      8,325,373    
   

 

 

   

 

CONSUMER GOODS: DURABLE - 0.8%

 

 

 

PT Holdings, LLC
First Lien Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 6.33%,
12/09/24(b)

  1,319,194     1,320,018    

Second Lien Initial Loan, (LIBOR + 8.00%, 1.00% Floor), 10.33%, 12/08/25(b)

  625,000     632,813    
   

 

 

   
      1,952,831    
   

 

 

   

 

CONSUMER GOODS: NON-DURABLE - 3.0%

 

 

 

American Greetings, Corp.
Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 6.59%, 04/06/24(b)

  3,412,221     3,442,078    

LTI Holdings, Inc.
First Lien Initial Term Loan, (LIBOR + 4.75%, 1.00% Floor), 6.85%,
05/16/24(b)

  4,017,374             4,019,885    
   

 

 

   
      7,461,963    
   

 

 

   

 

CONTAINERS, PACKAGING & GLASS - 3.2%

 

 

 

Anchor Glass Container Corp.
July 2017 Additional Term Loan, (LIBOR + 2.75%, 1.00% Floor), 4.82%, 12/07/23(b)(d)

  4,957,918     4,508,606    

Second Lien Term Loan, (LIBOR + 7.75%, 1.00% Floor), 9.81%,
12/07/24(b)

  1,083,333         738,021    
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

CONTAINERS, PACKAGING & GLASS (continued)

 

 

 

Hoover Group, Inc.
First Lien Initial Term Loan, (LIBOR + 7.25%, 1.00% Floor), 9.58%,
01/28/21(b)(e)

  752,036     733,235    

SMI Acquisition, Inc.
First Lien Initial Term Loan, (LIBOR + 3.75%, 1.00% Floor), 6.11%,
11/01/24(b)(e)

  1,044,750     1,021,243    

Sprint Industrial Holdings, LLC
First Lien Term Loan, (LIBOR + 5.75%, 1.25% Floor), 8.08%, 05/14/19(b)

  1,044,554     1,015,829    
   

 

 

   
              8,016,934    
   

 

 

   

 

ENERGY: OIL & GAS - 0.6%

     

 

Ascent Resources - Marcellus, LLC
Exit Term Loan, (LIBOR + 6.50%, 1.00% Floor), 8.50%, 03/30/23(b)

  230,586     231,450    

Azure Midstream Energy, LLC
Term Loan, (LIBOR + 7.50%, 1.00%
Floor), 9.25%, 11/15/18(b)

  402,376     394,328    

HGIM Corp.
Senior Secured Term Loan A, (Prime + 3.25%, 1.00% Floor), 8.25%,
06/18/18(b)(g)(h)

  398,725     171,452    

Sheridan Investment Partners I, LLC
Deferred Principal Facility I, 10/01/19(e)(g)

  4,749     2,850    

Tranche B-2 Term Loan, (LIBOR + 3.50%, 0.75% Floor), 5.82%, 10/01/19(b)

  440,704     390,757    

Sheridan Production Partners I-A, L.P.
Deferred Principal Facility I-A,
10/01/19(e)(g)

  629     378    

Tranche B-2 Term Loan, (LIBOR + 3.50%, 0.75% Floor), 5.82%,
10/01/19(b)

  58,397     51,778    

Sheridan Production Partners I-M, L.P.
Deferred Principal Facility I-M,
10/01/19(e)(g)

  384     231    

Tranche B-2 Term Loan, (LIBOR + 3.50%, 0.75% Floor), 5.82%, 10/01/19(b)

  35,668     31,626    

Southcross Holdings Borrower, L.P.
Tranche B Term Loan (5.50% PIK), 9.00%, 04/13/23(i)(j)

  128,580     123,115    
   

 

 

   
      1,397,965    
   

 

 

   

 

ENVIRONMENTAL INDUSTRIES - 1.2%

 

 

 

Emerald 2, Ltd. (United Kingdom)
Facility B-1, (LIBOR + 4.00%, 1.00% Floor), 6.33%, 05/14/21(b)(c)

  3,091,110         3,094,974    
   

 

 

   
 

 

See accompanying Notes to Financial Statements.  |  17


Apollo Tactical Income Fund Inc.

Schedule of Investments (continued)

June 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Senior Loans(a) (continued)

 

 

HEALTHCARE & PHARMACEUTICALS - 22.8%

 

 

 

Akorn, Inc.
Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.38%, 04/16/21(b)(d)

  3,769,533       3,702,002    

Argon Medical Devices Holdings, Inc.
First Lien Initial Term Loan, (LIBOR + 3.75%, 0.00% Floor), 5.84%, 01/23/25(b)

  1,559,920       1,566,753    

BioClinica Holding I, LP
First Lien Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor),
6.63%, 10/20/23(b)

  2,206,622       2,104,566    

BW NHHC HoldCo, Inc.
First Lien Initial Term Loan, (LIBOR + 5.00%, 0.00% Floor), 7.07%,
05/15/25(b)(d)

  2,043,404       2,022,980    

Community Health Systems, Inc.
Incremental 2019 Term Loan G, (LIBOR + 3.00%, 1.00% Floor), 5.31%,
12/31/19(b)(d)

  1,948,561       1,948,259    

Incremental 2021 Term Loan H, (LIBOR + 3.25%, 1.00% Floor), 5.56%,
01/27/21(b)(d)

  3,974,695       3,887,768    

CT Technologies Intermediate Hldgs, Inc.
Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.34%,
12/01/21(b)

  3,967,787       3,766,085    

Endo Luxembourg Finance I Co.
S.A.R.L Initial Term Loan, (LIBOR + 4.25%, 0.75% Floor), 6.38%, 04/29/24(b)

  2,992,443       2,992,443    

Hanger, Inc.
Term Loan B, (LIBOR + 3.50%, 0.00% Floor), 5.59%, 03/06/25(b)(e)

  1,927,816       1,925,407    

Inovalon Holdings, Inc.
Term Loan, (LIBOR + 3.50%, 0.00%
Floor), 5.56%, 04/02/25(b)

  4,000,000       3,902,500    

Lanai Holdings II, Inc.
First Lien Initial Term Loan, (LIBOR + 4.75%, 1.00% Floor), 7.11%,
08/29/22(b)(d)

  4,225,550       4,045,964    

Lanai Holdings III, Inc.
Second Lien Initial Term Loan, (LIBOR + 8.50%, 1.00% Floor), 10.86%,
08/28/23(b)

  869,565       834,782    

Lantheus Medical Imaging, Inc.
New Term Loan B 2017, (LIBOR + 3.75%, 1.00% Floor), 5.84%, 06/30/22(b)

      1,038,218           1,045,356    
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

HEALTHCARE & PHARMACEUTICALS (continued)

 

 

 

Medical Solutions Holdings, Inc.
First Lien Closing Date Term Loan, (LIBOR + 3.75%, 1.00% Floor), 5.84%, 06/14/24(b)

  2,248,999       2,250,876    

Second Lien Closing Date Loan, (LIBOR + 8.25%, 1.00% Floor), 10.34%, 06/16/25(b)

  2,000,000       2,008,750    

MModal, Inc.
Term Loan B, (LIBOR + 4.75%, 1.00% Floor), 7.27%, 02/13/23(b)

  2,030,625       2,023,020    

NMSC Holdings, Inc.
First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.45%, 04/19/23(b)

  561,524       559,418    

One Call, Corp.
First Lien Extended Term Loan, (LIBOR + 5.25%, 1.00% Floor), 7.32%,
11/27/22(b)(d)

  5,985,012       5,745,612    

Onex TSG Intermediate Corp.
First Lien Initial Term Loan, (LIBOR + 4.00%, 1.00% Floor), 6.09%, 07/29/22(b)

  2,000,000       1,992,510    

Quorum Health Corp.
Term Loan, (LIBOR + 6.75%, 1.00% Floor), 8.84%, 04/29/22(b)

  2,625,255       2,675,134    

Team Health Holdings,
Inc. Initial Term Loan, (LIBOR + 2.75%, 1.00% Floor), 4.84%, 02/06/24(b)

  3,908,315       3,766,639    

U.S. Renal Care, Inc.
First Lien Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.58%,
12/30/22(b)(d)

  2,460,344       2,428,556    
   

 

 

   
            57,195,380    
   

 

 

   

 

HIGH TECH INDUSTRIES - 17.0%

 

 

 

DigiCert, Inc.
First Lien Term Loan, (LIBOR + 4.75%, 1.00% Floor), 6.84%, 10/31/24(b)(d)

  4,188,366       4,190,984    

Second Lien Term Loan, (LIBOR + 8.00%, 1.00% Floor), 10.09%,
10/31/25(b)

  1,514,727       1,483,486    

Flexera Software, LLC
First Lien Initial Term Loan, (LIBOR + 3.25%, 1.00% Floor), 5.35%,
02/26/25(b)

  1,080,893       1,080,390    

Second Lien Initial Term Loan, (LIBOR + 7.25%, 1.00% Floor), 9.35%,
02/26/26(b)

  192,308       192,789    

Gigamon, Inc.
First Lien Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 6.83%,
12/27/24(b)

  1,705,714       1,720,639    

Help/Systems Holdings, Inc.
First Lien Term Loan, (LIBOR + 3.75%, 0.00% Floor), 5.84%, 03/28/25(b)

      2,598,595       2,601,843    
 

 

18  |  See accompanying Notes to Financial Statements.


Apollo Tactical Income Fund Inc.

Schedule of Investments (continued)

June 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Senior Loans(a) (continued)

 

 

HIGH TECH INDUSTRIES (continued)

 

 

 

ION Trading Finance, Ltd. (Ireland)
Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.00%,
11/21/24(b)(c)(d)

  6,748,795     6,706,615    

Ivanti Software, Inc.
First Lien Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.35%, 01/20/24(b)

  3,978,576     3,951,244    

MA FinanceCo., LLC
Tranche B-3 Term Loan, (LIBOR + 2.75%, 0.00% Floor), 4.84%, 06/21/24(b)

  257,312     256,749    

Ocean Bidco, Inc.
Initial Dollar Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.33%, 03/21/25(b)

  1,093,051     1,099,883    

Riverbed Technology, Inc.
First Amendment Term Loan, (LIBOR + 3.25%, 1.00% Floor), 5.35%, 04/24/22(b)

  2,987,813     2,956,874    

Seattle SpinCo, Inc.
Initial Term Loan, (LIBOR + 2.75%, 0.00% Floor), 4.84%, 06/21/24(b)

  1,737,688     1,733,892    

SolarWinds Holdings, Inc.
2018 Refinancing Term Loan, (LIBOR + 3.00%, 0.00% Floor), 5.09%, 02/05/24(b)

  1,240,896     1,241,926    

Syncsort, Inc.
First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.09%, 08/16/24(b)(d)

  3,062,329     3,075,742    

Second Lien Initial Term Loan, (LIBOR + 9.00%, 1.00% Floor), 11.09%, 08/18/25(b)

  2,000,000     1,976,880    

Triple Point Group Holdings, Inc.
First Lien Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.34%, 07/10/20(b)

  3,943,972     3,552,868    

Vertafore, Inc.
First Lien Term Loan, (LIBOR + 3.25%, 0.00% Floor), 5.34%, 06/04/25(b)(d)

  1,000,000         994,900    

Second Lien Term Loan, (LIBOR + 7.25%, 0.00% Floor), 7.25%, 06/04/26(b)(d)

  3,720,000     3,701,400    
   

 

 

   
              42,519,104    
   

 

 

   

 

HOTEL, GAMING & LEISURE - 1.0%

 

 

 

Mohegan Tribal Gaming Authority
Term Loan A, (LIBOR + 3.75%, 0.00% Floor), 5.84%, 10/13/21(b)

  503,517     489,041    

SeaWorld Parks & Entertainment, Inc.
Term Loan B-5, (LIBOR + 3.00%, 0.75% Floor), 5.09%, 04/01/24(b)(d)

  1,994,950     1,983,728    
   

 

 

   
      2,472,769    
   

 

 

   
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

MEDIA: ADVERTISING, PRINTING & PUBLISHING - 2.7%

 

 

 

Acosta, Inc.
Tranche B-1 Loan, (LIBOR + 3.25%, 1.00% Floor), 5.34%, 09/26/21(b)

  1,992,288     1,510,403    

Advantage Sales & Marketing, Inc.
First Lien Initial Term Loan, (LIBOR + 3.25%, 1.00% Floor), 5.34%, 07/23/21(b)

  2,981,932     2,827,259    

Incremental Term Loan B-2, (LIBOR + 3.25%, 1.00% Floor), 5.34%, 07/23/21(b)

  963,275     913,103    

Second Lien Term Loan, (LIBOR + 6.50%, 1.00% Floor), 8.59%, 07/25/22(b)

  1,000,000     915,835    

F & W Media,Inc.
Term Loan B-1 (8.60% PIK), (LIBOR + 6.50%, 1.50% Floor), 8.60%,
05/24/22(b)(e)(j)

  325,689     325,689    

Term Loan B-2 (12.10% PIK), (LIBOR + 10.00%, 1.50% Floor), 12.10%,
05/24/22(b)(e)(j)

  884,560     331,078    
   

 

 

   
              6,823,367    
   

 

 

   

 

MEDIA: BROADCASTING & SUBSCRIPTION - 4.7%

 

 

 

Emmis Operating Co.
Term Loan, (LIBOR + 7.00%, 1.00% Floor), 9.10%, 04/18/19(b)

  227,950     224,531    

Global Eagle Entertainment, Inc.
Initial Term Loan, (LIBOR + 7.50%, 1.00% Floor), 9.36%, 01/06/23(b)

  4,918,943     5,033,726    

Univision Communications, Inc.
2017 Replacement Term Loan, (LIBOR + 2.75%, 1.00% Floor), 4.84%,
03/15/24(b)(d)

  2,940,703     2,846,365    

Urban One, Inc.
Initial Term Loan, (LIBOR + 4.00%, 1.00% Floor), 6.10%, 04/18/23(b)

  1,435,446     1,414,812    

WideOpenWest Finance, LLC
Refinancing Term Loan B, (LIBOR + 3.25%, 1.00% Floor), 5.34%,
08/18/23(b)(d)

  2,493,719     2,387,736    
   

 

 

   
      11,907,170    
   

 

 

   

 

MEDIA: DIVERSIFIED & PRODUCTION - 0.5%

 

 

 

A-L Parent, LLC
Second Lien Initial Term Loan, (LIBOR + 7.25%, 1.00% Floor), 9.35%,
12/02/24(b)(e)

  375,000     378,750    

DHX Media, Ltd. (Canada)
Initial Term Loan, (Prime + 2.75%, 1.00% Floor), 7.75%, 12/29/23(b)(c)(d)

  997,481     997,795    
   

 

 

   
      1,376,545    
   

 

 

   
 

 

See accompanying Notes to Financial Statements.  |  19


Apollo Tactical Income Fund Inc.

Schedule of Investments (continued)

June 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Senior Loans(a) (continued)

 

 

METALS & MINING - 0.0%

 

 

 

Magnetation, LLC / Mag Finance Corp.
DIP Term Loan, 12.00%,
10/14/16(e)(g)(i)

  1,127,505          
   

 

 

   

 

RETAIL - 7.2%

     

 

Academy, Ltd.
Initial Term Loan, (LIBOR + 4.00%, 1.00% Floor), 5.99%, 07/01/22(b)

  1,945,382       1,624,121    

Charming Charlie, LLC
Term Loan A (5.00% PIK), (LIBOR + 10.00%, 1.00% Floor), 12.36%, 04/24/23(b)(e)(j)

  233,496       76,624    

Term Loan B (9.00% PIK), (LIBOR + 10.00%, 1.00% Floor), 12.36%, 04/24/23(b)(e)(j)

  280,195       91,948    

EG America, LLC
Additional Facility Loan, (LIBOR + 4.00%, 0.00% Floor), 6.33%,
02/07/25(b)

  2,508,683       2,490,808    

General Nutrition Centers, Inc.
First In Last Out Term Loan, (LIBOR + 7.00%, 0.00% Floor),
9.10%, 12/31/22(b)

  572,350       592,279    

JC Penney Corp.
Term Loan B, (LIBOR + 4.25%, 1.00% Floor), 6.57%, 06/23/23(b)

  4,128,198       3,952,750    

Petco Animal Supplies, Inc.
Second Amendment Term Loan, (LIBOR + 3.25%, 1.00% Floor), 5.61%, 01/26/23(b)

  5,815,050       4,213,498    

PetSmart, Inc.
Tranche B-2 Loan, (LIBOR + 3.00%, 1.00% Floor), 5.01%, 03/11/22(b)

  2,843,975       2,358,324    

Sears Roebuck Acceptance Corp.
2017 Extended Term Loan, (LIBOR + 4.50%, 1.00% Floor),
6.50%, 01/18/19(b)

  1,218,733       1,217,722    

Vince, LLC
Initial Term Loan, (LIBOR + 7.00%, 1.00% Floor), 9.36%, 11/27/19(b)

  1,449,296       1,362,338    
   

 

 

   
            17,980,412    
   

 

 

   

 

SERVICES: BUSINESS - 12.1%

     

 

Access CIG, LLC
First Lien Term Loan, (LIBOR + 3.75%, 0.00% Floor), 5.84%,
02/27/25(b)(d)

  164,587       165,081    

First Lien Term Loan B, (LIBOR + 3.75%, 0.00% Floor), 5.84%,
02/27/25(b)(d)

  1,079,359       1,082,597    

Electro Rent Corp.
First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.33%,
01/31/24(b)

  2,087,262       2,102,917    
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

SERVICES: BUSINESS (continued)

 

 

 

Evergreen Skills Lux S.A.R.L. (Luxembourg)
First Lien Initial Term Loan, (LIBOR + 4.75%, 1.00% Floor),
6.84%, 04/28/21(b)(c)

  6,000,000       5,690,610    

Second Lien Initial Term Loan, (LIBOR + 8.25%, 1.00% Floor), 10.34%,
04/28/22(b)(c)(d)

  2,000,000       1,680,720    

Explorer Holdings, Inc.
Initial Term Loan, (LIBOR + 3.75%, 1.00% Floor), 6.08%, 05/02/23(b)

  1,941,411       1,941,411    

GI Revelation Acquisition, LLC
First Lien Term Loan, (LIBOR + 5.00%, 0.00% Floor), 7.09%, 04/16/25(b)

  2,705,882       2,730,113    

Michael Baker International, LLC
Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 6.59%, 11/21/22(b)

  2,863,636       2,870,795    

National Intergovernmental Purchasing Alliance Co.
First Lien Initial Term Loan, (LIBOR + 3.75%, 0.00% Floor),
6.08%, 05/23/25(b)

  1,500,000       1,500,000    

Onex Carestream Finance, L.P.
Second Lien Term Loan, (LIBOR + 8.50%, 1.00% Floor), 10.59%,
12/07/19(b)

  1,000,000       1,001,250    

Paysafe Group PLC
Facility B-1, (LIBOR + 3.50%, 1.00% Floor), 5.59%, 01/03/25(b)

  1,693,182       1,673,076    

R1 RCM, Inc.
Initial Term Loan, (LIBOR + 5.25%, 0.00% Floor), 7.62%, 05/08/25(b)(e)

  1,428,571       1,428,571    

SGS Cayman, L.P.
Initial Cayman Term Loan, (LIBOR + 5.38%, 1.00% Floor), 7.71%, 04/23/21(b)

  780,295       751,034    

STG-Fairway Acquisitions, Inc.
First Lien Term Loan, (LIBOR + 5.25%, 1.00% Floor), 7.34%, 06/30/22(b)

  2,577,911       2,577,911    

Sutherland Global Services, Inc.
Initial U.S. Term Loan, (LIBOR + 5.38%, 1.00% Floor), 7.71%, 04/23/21(b)

  3,352,109       3,226,405    
   

 

 

   
            30,422,491    
   

 

 

   

 

SERVICES: CONSUMER - 1.2%

 

 

 

Laureate Education, Inc.
Series 2024 Term Loan, (LIBOR + 3.50%, 1.00% Floor), 5.59%,
04/26/24(b)

  2,219,334       2,223,806    
 

 

20  |  See accompanying Notes to Financial Statements.


Apollo Tactical Income Fund Inc.

Schedule of Investments (continued)

June 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Senior Loans(a) (continued)

   

SERVICES: CONSUMER (continued)

   

 

USS Ultimate Holdings, Inc.
Second Lien Initial Term Loan, (LIBOR + 7.75%, 1.00% Floor), 9.84%, 08/25/25(b)

  884,615       891,250    
      3,115,056    

 

TELECOMMUNICATIONS - 12.2%

   

CenturyLink, Inc.
Initial Term Loan B, (LIBOR + 2.75%, 0.00% Floor), 4.84%, 01/31/25(b)

  1,992,494       1,954,716    

Flight Bidco, Inc.
Term Loan, (LIBOR + 3.50%, 0.00% Floor), 3.50%, 06/19/25(b)(d)

  2,192,906       2,190,164    

Frontier Communications, Corp.
Initial Term Loan, (LIBOR + 2.75%, 0.00% Floor), 4.85%, 03/31/21(b)

  769,286       759,189    

Term Loan, (Prime + 3.38%, 0.00% Floor), 8.38%, 10/12/21(b)

  4,643,382       4,602,753    

Intelsat Jackson Holdings S.A.
(Luxembourg)
Tranche B-4 Term Loan, (LIBOR + 4.50%, 1.00% Floor), 6.60%, 01/02/24(b)(c)

  3,406,020       3,546,517    

Tranche B-5 Term Loan, 6.63%, 01/02/24(c)(i)

  3,820,586       3,952,243    

Securus Technologies Holdings, Inc.
First Lien Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 6.59%, 11/01/24(b)(d)

  2,287,069       2,301,363    

TDC A/S (Denmark)
USD Term Loan, (LIBOR + 3.50%, 0.00% Floor), 3.50%,
06/11/25(b)(c)(d)

  4,384,068       4,382,709    

TVC Albany, Inc.
Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 6.09%, 09/18/24(b)

  581,747       583,201    

U.S. TelePacific Corp.
Advance Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.33%, 05/02/23(b)

  3,931,070       3,878,256    

Zacapa, LLC
Term Loan, (LIBOR + 5.00%, 0.75% Floor), 7.34%, 06/27/25(b)(d)

  2,333,333       2,333,333    
              30,484,444    

 

TRANSPORTATION: CONSUMER - 0.6%

   

 

Travel Leaders Group, LLC
New Incremental Term Loan, (LIBOR + 4.50%, 0.00% Floor), 7.00%, 01/25/24(b)

  1,472,160       1,483,201    
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

UTILITIES: ELECTRIC - 1.4%

   

 

Moxie Patriot, LLC
Construction B-1 Advances, (LIBOR + 5.75%, 1.00% Floor), 8.08%,
12/19/20(b)

  1,656,466       1,643,007    

Construction B-2 Advances, (LIBOR + 5.75%, 1.00% Floor), 8.08%,
12/19/20(b)

  1,937,087       1,921,348    
      3,564,355    

Total Senior Loans
(Cost $289,308,438)

      285,615,183    

Corporate Notes and Bonds - 19.8%(i)

   

AEROSPACE & DEFENSE - 0.5%

   

 

BBA U.S. Holdings, Inc.
5.38%, 05/01/26(k)

  1,240,000       1,247,762    

 

AUTOMOTIVE - 1.4%

   

 

Tesla, Inc.
5.30%, 08/15/25(k)

  4,000,000       3,575,000    

 

BANKING, FINANCE, INSURANCE & REAL ESTATE - 0.6%

 

 

 

Greystar Real Estate Partners, LLC
5.75%, 12/01/25(k)

  1,500,000       1,458,750    

 

BEVERAGE, FOOD & TOBACCO - 1.5%

   

 

JBS, S.A.
6.75%, 02/15/28(k)

  2,000,000       1,891,900    

Sigma Holdco B.V. (Netherlands)
7.88%, 05/15/26(c)(k)

  2,000,000       1,885,000    
      3,776,900    

 

CONSUMER GOODS: NON-DURABLE - 0.3%

   

 

Mattel, Inc.
6.75%, 12/31/25(k)

  662,000       646,277    

 

CONTAINERS, PACKAGING & GLASS - 0.8%  

   

 

Reynolds Group Holdings, Inc.
6.88%, 02/15/21

  1,069,414       1,084,119    

W/S Packaging Holdings, Inc.
9.00%, 04/15/23(k)

  801,000       813,015    
      1,897,134    

 

ENERGY: OIL & GAS - 1.9%

     

 

Moss Creek Resources Holdings, Inc.
7.50%, 01/15/26(k)

  4,762,000       4,684,617    

 

HEALTHCARE & PHARMACEUTICALS - 4.1%

   

 

Centene Escrow I Corp.
5.38%, 06/01/26(k)

  2,000,000       2,031,260    

Community Health Systems, Inc.
8.63%, 01/15/24(k)

  2,005,000       2,015,025    

Team Health Holdings, Inc.
6.38%, 02/01/25(k)

  1,500,000       1,297,500    

Valeant Pharmaceuticals
International, Inc. (Canada)

     

5.63%, 12/01/21(c)(k)

  1,500,000       1,481,250    

6.50%, 03/15/22(c)(k)

  1,500,000       1,558,125    

7.50%, 07/15/21(c)(k)

  2,000,000       2,035,000    
              10,418,160    
 

 

See accompanying Notes to Financial Statements.  |  21


Apollo Tactical Income Fund Inc.

Schedule of Investments (continued)

June 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Corporate Notes and Bonds(i) (continued)

 

 

HIGH TECH INDUSTRIES - 1.2%

   

 

Infor Software Parent, LLC
(7.88% PIK), 7.13%, 05/01/21(j)(k)

  1,000,000       1,006,250    

Riverbed Technology, Inc.
8.88%, 03/01/23(k)

  2,000,000       1,903,500    
      2,909,750    

 

HOTEL, GAMING & LEISURE - 1.7%

   

 

Churchill Downs, Inc.
4.75%, 01/15/28(k)

  3,000,000       2,790,000    

Hilton Grand Vacations Borrower, LLC
6.13%, 12/01/24

  1,100,000       1,126,125    

Scientific Games Corp.
5.00%, 10/15/25(k)

  500,000       477,500    
      4,393,625    

 

MEDIA: BROADCASTING & SUBSCRIPTION - 3.3%

 

 

 

CSC Holdings, LLC

     

5.38%, 02/01/28(k)

  2,000,000       1,855,000    

10.13%, 01/15/23(k)

  317,000       350,285    

10.88%, 10/15/25(k)

  477,000       551,078    

Univision Communications, Inc.

     

5.13%, 05/15/23(k)

  1,000,000       962,500    

5.13%, 02/15/25(k)

  4,000,000       3,705,000    

Urban One, Inc.
7.38%, 04/15/22(k)

  787,000       765,357    
      8,189,220    

METALS & MINING - 0.0%

   

 

ERP Iron Ore, LLC
LIBOR + 8.00%, 12/31/19(e)

  121,662       36,477    

Magnetation, LLC / Mag Finance Corp.
11.00%, 05/15/18(e)(g)(k)(l)

  2,937,000          
      36,477    

RETAIL - 0.2%

     

 

PetSmart, Inc.
8.88%, 06/01/25(k)

  847,000       561,137    

 

SERVICES: CONSUMER - 0.8%

   

 

NVA Holdings, Inc.
6.88%, 04/01/26(k)

  2,000,000       1,997,500    

 

TELECOMMUNICATIONS - 1.5%

   

 

Orbcomm, Inc.
8.00%, 04/01/24(k)

  3,694,000       3,878,700    

 

Total Corporate Notes and Bonds
(Cost $50,715,417)

          49,671,009    
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Structured Products - 12.8%(m)

   

 

Anchorage Capital CLO, Ltd.
(Cayman Islands)
Series 2015-6A, Class ER,
    8.70%, 07/15/30(c)(k)(n)

  4,400,000       4,423,795    

Babson CLO Ltd. (Cayman Islands)
Series 2014-IA, Class E,
    8.01%, 07/20/25(c)(k)(n)

  1,110,000       1,066,124    

Fortress Credit Opportunities CLO,
Ltd. (Cayman Islands)
Series 2018-11A, Class E,
    9.50%, 04/15/31(c)(k)(n)

  4,000,000       3,850,124    

Guggenheim 1828 CLO, LLC
(Cayman Island)
Series 2016-1A, Class D, 9.35%,
    04/15/28(c)(k)(n)

  4,000,000       4,002,740    

Ivy Hill Middle Market Credit Fund,
Ltd. (Cayman Islands)
Series 10A, Class D2, 9.66%,
    07/24/27(c)(k)(n)

  2,350,000       2,349,908    

JFIN CLO, Ltd. (Cayman Islands)
Series 2015-1A, Class E, 7.34%,
    03/15/26(c)(k)(n)

  4,500,000       4,339,679    

Teachers Insurance and Annuity
Association of America CLO, Ltd.
(Cayman Islands)

     

Series 2016-1A, Class E2, 12.36%,
07/20/28(c)(k)(n)

  2,500,000       2,505,480    

TIAA Churchill Middle Market CLO
(Cayman Islands)
Series 2016-1A, Class E2, 10.36%,
    10/20/28(c)(k)(n)

  2,000,000       2,007,342    

Series 2017-1A, Class E, 9.66%,
    01/24/30(c)(k)(n)

  4,000,000       3,854,012    

Voya CLO, Ltd. (Cayman Islands)
Series 2015-3A, Series E,
    8.86%, 10/20/27(c)(k)(n)

  1,000,000       971,169    

Zais CLO, Ltd. (Cayman Islands)
Series 2016-2A, Series D,
    9.35%, 10/15/28(c)(k)(n)

  1,000,000       1,003,194    

Series 2017-2A, Series E,
    9.50%, 04/15/30(c)(k)(n)

  1,750,000       1,771,823    

 

Total Structured Products
(Cost $31,233,469)

            32,145,390    
 

 

22  |  See accompanying Notes to Financial Statements.


Apollo Tactical Income Fund Inc.

Schedule of Investments (continued)

June 30, 2018 (unaudited)

 

   

Share

 Quantity 

 

 

 Value ($) 

 

     

Common Stocks - 0.3%

     

BANKING, FINANCE, INSURANCE & REAL ESTATE - 0.0%

 

 

 

Medical Card System, Inc.(e)(g)

  914,981       58,116    

 

ENERGY: OIL & GAS - 0.3%

     

Ascent Resources Marcellus Holdings,
Inc.(g)

  165,654               543,925    

Northern Oil and Gas, Inc.(g)

  50,167       158,026    

Southcross Holdings Borrower, GP
LLC(e)(g)

  129          

Southcross Holdings Borrower, LP, Class A-II(e)(g)

  129       36,443    
      738,394    

 

MEDIA: ADVERTISING, PRINTING & PUBLISHING - 0.0%

 

 

 

F & W Media, Inc.(e)(g)

  9,510          

 

RETAIL - 0.0%

     

 

Charming Charlie, LLC(e)(g)

  2,679,190          

Total Common Stock
(Cost $690,276)

      796,510    
   

Share

 Quantity 

 

 

 Value ($) 

 

     

Preferred Stock - 1.6%

     

BANKING, FINANCE, INSURANCE & REAL ESTATE - 1.6%

 

 

 

Watford Holdings, Ltd. (Bermuda)
8.50%,(c)(e)(k)

  160,000       3,942,277    

 

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

      3,942,277    

Warrants - 0.0%

     

ENERGY: OIL & GAS - 0.0%

     

 

Ascent Resources Marcellus Holdings,
Inc.(e)(g)

  42,889       1,287    

 

Total Warrants
(Cost $4,289)

      1,287    

 

Total Investments-148.4%
(Cost of $375,871,889)

      372,171,656    

Other Assets & Liabilities, Net-1.9%

      4,729,206    

Loan Outstanding-(50.3)%(o)(p)

      (126,194,303  

 

Net Assets -100.0%

      250,706,559    
   

 

 

   
 

 

See accompanying Notes to Financial Statements.  |  23


Apollo Tactical Income Fund Inc.

Schedule of Investments (continued)

June 30, 2018 (unaudited)

 

 

(a)

“Senior Loans” are senior, secured loans made to companies whose debt is below investment grade as well as investments with similar economic characteristics. Senior Loans typically hold a first lien priority and, unless otherwise indicated, are required to pay interest at floating rates that are periodically reset by reference to a base lending rate plus a spread. In some instances, the rates shown represent the weighted average rate as of June 30, 2018. Senior Loans are generally not registered under the Securities Act of 1933 (the “1933 Act”) and often incorporate 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.

(b)

The interest rate on this Senior Loan is subject to a 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 U.S. banks (“Prime”). The interest rate is subject to a minimum floor, which may be less than or greater than the prevailing period end LIBOR/Prime rate. As of June 30, 2018, the 1, 2, 3 and 6 month LIBOR rates were 2.09%, 2.17%, 2.34% and 2.50%, respectively, and the Prime lending rate was 5.00%. Senior Loans may contain multiple contracts of the same issuer which may be subject to base lending rates of both LIBOR and Prime (“Variable”) in addition to the stated spread.

(c)

Foreign issuer traded in U.S. dollars.

(d)

All or a portion of this Senior Loan position has not settled. Full contract rates do not take effect until settlement date and therefore are subject to change.

(e)

Fair Value Level 3 security.

(f)

The issuer is in default of its payment obligations as of March 19, 2017, as such, income is no longer being accrued.

(g)

Non-income producing asset.

(h)

The issuer is in default of its payment obligations as of March 7, 2018, as such, income is no longer being accrued. This position subsequently restructured effective July 2, 2018.

(i)

Fixed rate asset.

(j)

Represents a payment-in-kind (“PIK”) security, which may pay interest in additional principal amount.

(k)

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, 2018, these securities amounted to $83,511,955, or 33.31% of net assets.

(l)

The issuer is in default of its payment obligations as of May 5, 2015, as such, income is no longer being accrued.

(m)

Structured Products include collateralized loan obligations (“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 and the redemption of these securities typically takes place at maturity out of the cash flow generated by the collected claims.

(n)

Floating rate asset. The interest rate shown reflects the rate in effect at June 30, 2018.

(o)

The Fund has granted a security interest in substantially all of its assets in the event of default under the credit facility.

(p)

Principal $126,500,000 less unamortized deferred financing costs of $305,697.

 

24  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Statements of Assets and Liabilities

June 30, 2018 (unaudited)

 

     

Apollo

Senior

Floating Rate

Fund Inc.

   

Apollo

Tactical

Income

Fund Inc.

 

 

Assets:

    

Investment securities at fair value (cost $410,144,569 and $375,871,889, respectively)

   $ 404,405,301     $ 372,171,656  

Cash and cash equivalents

     19,411,362       20,019,123  

Interest receivable

     1,777,497       2,403,744  

Receivable for investment securities sold

     45,076,018       41,400,381  

Unrealized appreciation on unfunded transactions (Note 9)

     12,479       6,087  

Prepaid expenses

     248,404       248,532  
  

 

 

   

 

 

 

Total assets

   $ 470,931,061     $ 436,249,523  
  

 

 

   

 

 

 

Liabilities:

    

Borrowings under credit facility (principal $141,000,000 and $126,500,000, respectively, less unamortized deferred financing costs of $189,034 and $305,697, respectively) (Note 8)

   $ 140,810,966     $ 126,194,303  

Payable for investment securities purchased

     55,004,965       58,595,137  

Interest payable

     277,346       136,070  

Distributions payable to common shareholders

     37,862       33,667  

Investment advisory fee payable

     343,036       311,014  

Other payables and accrued expenses due to affiliates

     84,255       80,875  

Other payables and accrued expenses

     182,550       191,898  
  

 

 

   

 

 

 

Total liabilities

     196,740,980       185,542,964  
  

 

 

   

 

 

 

Commitments and Contingencies (Note 9)

    

Net Assets (Applicable to Common Shareholders)

   $ 274,190,081     $ 250,706,559  
  

 

 

   

 

 

 

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)

   $ 296,699,291     $ 275,624,904  

Undistributed net investment income (loss)

     1,243,850       1,330,778  

Accumulated net realized loss from investments

     (18,026,271     (22,554,977

Net unrealized depreciation on investments and unfunded loan commitments

     (5,726,789     (3,694,146
  

 

 

   

 

 

 

Net Assets (Applicable to Common Shareholders)

   $ 274,190,081     $ 250,706,559  
  

 

 

   

 

 

 

Number of Common Shares Outstanding

     15,573,061       14,464,026  

Net Asset Value, per Common Share

   $ 17.61     $ 17.33  

 

See accompanying Notes to Financial Statements.  |  25


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Statements of Operations

For the Six Months Ended June 30, 2018 (unaudited)

 

    

Apollo

Senior

Floating Rate

Fund Inc.

         

Apollo

Tactical

Income

Fund Inc.

      
Investment Income:         

Interest

  $ 14,772,136        $ 14,233,517    

Dividends

    170,000          170,000    
 

 

 

      

 

 

   

Total investment income

    14,942,136          14,403,517    
 

 

 

      

 

 

   

Expenses:

        

Investment advisory fee (Note 3)

    2,078,598          1,915,599    

Interest and commitment fee expense (Note 8)

    1,997,812          1,890,610    

Professional fees

    141,326          141,326    

Administrative services of the Adviser (Note 3)

    342,731          337,845    

Fund administration and accounting services (Note 3)

    131,597          126,662    

Insurance expense

    154,456          154,456    

Amortization of deferred financing costs (Note 8)

    109,063          44,590    

Board of Directors fees (Note 3)

    63,264          63,264    

Other operating expenses

    65,049          66,793    
 

 

 

      

 

 

   

Total expenses

    5,083,896          4,741,145    

Expense reimbursement waived by the Adviser (Note 3)

                
 

 

 

      

 

 

   

Net expenses

    5,083,896          4,741,145    
 

 

 

      

 

 

   

Net Investment Income

    9,858,240          9,662,372    
 

 

 

      

 

 

   

Net Realized and Unrealized Gain/(Loss) on Investments

        

Net realized loss on investments

    (6,613,701        (1,729,091  

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

    1,658,870          (755,113  
 

 

 

      

 

 

   

Net realized and unrealized gain/(loss) on investments

    (4,954,831        (2,484,204  
 

 

 

      

 

 

   

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

  $ 4,903,409        $ 7,178,168    
 

 

 

      

 

 

   

 

26  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Statements of Changes in Net Assets

 

    

For the

Six Months

Ended

June 30, 2018

(unaudited)

         

For the

Year

Ended

December 31,

2017

 

Increase/(Decrease) in Net Assets from:

      

Operations

      

Net investment income

  $ 9,858,240        $ 17,572,262  

Net realized gain/(loss) on investments

    (6,613,701        806,614  

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

    1,658,870          (3,572,162
 

 

 

      

 

 

 

Net increase in net assets from operations

    4,903,409          14,806,714  
 

 

 

      

 

 

 

Distributions to Common Shareholders

      

From net investment income

    (8,783,206        (18,064,751
 

 

 

      

 

 

 

Total distributions to common shareholders

    (8,783,206        (18,064,751
 

 

 

      

 

 

 

Total decrease in net assets

  $ (3,879,797      $ (3,258,037

Net Assets Applicable to Common Shares

      

Beginning of period

    278,069,878          281,327,915  
 

 

 

      

 

 

 

End of period

  $ 274,190,081        $ 278,069,878  
 

 

 

      

 

 

 

Undistributed net investment income

  $ 1,243,850        $ 168,816  
 

 

 

      

 

 

 

 

See accompanying Notes to Financial Statements.  |  27


Apollo Tactical Income Fund Inc.

Statements of Changes in Net Assets

 

    

For the

Six Months

Ended

June 30, 2018

(unaudited)

         

For the

Year

Ended

December 31,

2017

 

Increase/(Decrease) in Net Assets from:

      

Operations

      

Net investment income

  $ 9,662,372        $ 18,367,839  

Net realized loss on investments

    (1,729,091        (9,078,404

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

    (755,113        13,137,720  
 

 

 

      

 

 

 

Net increase in net assets from operations

    7,178,168          22,427,155  
 

 

 

      

 

 

 

Distributions to Common Shareholders

      

From net investment income

    (8,736,272        (18,586,273
 

 

 

      

 

 

 

Total distributions to common shareholders

    (8,736,272        (18,586,273
 

 

 

      

 

 

 

Total increase/(decrease) in net assets

  $ (1,558,104      $ 3,840,882  

Net Assets Applicable to Common Shares

      

Beginning of period

    252,264,663          248,423,781  
 

 

 

      

 

 

 

End of period

  $ 250,706,559        $ 252,264,663  
 

 

 

      

 

 

 

Undistributed net investment income

  $ 1,330,778        $ 404,678  
 

 

 

      

 

 

 

 

28  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Statement of Cash Flows

For the Six Months Ended June 30, 2018 (unaudited)

 

Cash Flows from Operating Activities:

        

Net increase in net assets from operations

   $ 4,903,409  

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

  

Net realized loss on investments

     6,613,701  

Net change in unrealized appreciation on investments and unfunded loan commitments

     (1,658,870

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

     (1,753,326

Purchase of investment securities

     (260,492,862

Proceeds from disposition of investment securities and principal paydowns

     266,807,959  

Payment-in-kind interest

     (68,618

Amortization of deferred financing costs

     109,063  

Changes in Operating Assets and Liabilities:

  

Decrease in interest receivable

     709,380  

Increase in prepaid expenses

     (169,619

Increase in interest payable

     73,101  

Decrease in investment advisory fee payable

     (13,911

Increase in other payables and accrued expenses due to affiliates

     84,255  

Increase in other payables and accrued expenses

     5,298  
  

 

 

 

Net cash flows provided by operating activities

     15,148,960  
  

 

 

 

Cash Flows from Financing Activities:

  

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

     (8,824,253
  

 

 

 

Net cash flows used in financing activities

     (8,824,253
  

 

 

 

Net Increase in Cash and Cash Equivalents

     6,324,707  

Cash and cash equivalents, beginning of period

     13,086,655  
  

 

 

 

Cash and cash equivalents, end of period

   $ 19,411,362  
  

 

 

 

Supplemental Disclosure of Cash Flow Information

  

Cash paid during the period for interest and commitment fee

   $ 1,924,711  
  

 

 

 

 

See accompanying Notes to Financial Statements.  |  29


Apollo Tactical Income Fund Inc.

Statement of Cash Flows

For the Six Months Ended June 30, 2018 (unaudited)

 

Cash Flows from Operating Activities:

        

Net increase in net assets from operations

   $ 7,178,168  

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

  

Net realized loss on investments

     1,729,091  

Net change in unrealized depreciation on investments and unfunded loan commitments

     755,113  

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

     (1,257,085

Purchase of investment securities

     (261,746,291

Proceeds from disposition of investment securities and principal paydowns

     288,432,833  

Payment-in-kind interest

     (67,989

Amortization of deferred financing costs

     44,590  

Changes in Operating Assets and Liabilities:

  

Decrease in interest receivable

     163,770  

Increase in prepaid expenses

     (169,619

Increase in interest payable

     32,953  

Decrease in investment advisory fee payable

     (20,865

Increase in other payables and accrued expenses due to affiliates

     80,875  

Increase in other payables and accrued expenses

     12,598  
  

 

 

 

Net cash flows provided by operating activities

     35,168,142  
  

 

 

 

Cash Flows from Financing Activities:

  

Proceeds from borrowing

     126,500,000  

Repayment of credit facility

     (138,000,000

Deferred financing cost

     (339,146

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

     (8,745,158
  

 

 

 

Net cash flows used in financing activities

     (20,584,304
  

 

 

 

Net Increase in Cash and Cash Equivalents

     14,583,838  

Cash and cash equivalents, beginning of period

     5,435,285  
  

 

 

 

Cash and cash equivalents, end of period

   $ 20,019,123  
  

 

 

 

Supplemental Disclosure of Cash Flow Information

  

Cash paid during the period for interest and commitment fee

   $ 1,857,657  
  

 

 

 

 

30  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Financial Highlights

For a Common Share Outstanding

 

  Per Common Share Operating

  Performance:

   For the
Six Months
Ended
June 30
2018
(unaudited)
 

For the

Year

Ended
December 31,
2017

 

For the

Year

Ended
December 31,
2016

 

For the

Year

Ended
December 31,
2015

 

For the

Year

Ended
December 31,
2014

 

For the

Year

Ended
December 31,
2013

    

 

  Net Asset Value, Beginning of Period

     $ 17.86     $ 18.07     $ 16.92     $ 18.30     $ 19.12     $ 18.73  
    

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 

 

  Income from Investment Operations:

                          

Net investment income(a)

       0.63       1.13       1.24       1.22       1.18       1.34  

Net realized and unrealized gain/(loss) on investments and unfunded loan commitments

       (0.32 )       (0.18 )       1.15       (1.37 )       (0.75 )       0.35  

Distributions from net investment income to Series A Preferred Shareholders

                               (0.02 )       (0.04 )  
    

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 

Total from investment operations

       0.31       0.95       2.39       (0.15 )       0.41       1.65  
    

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 

  Less Distributions Paid to Common Shareholders from:

                          

Net investment income

       (0.56 )       (1.16 )       (1.24 )       (1.23 )       (1.23 )       (1.26 )  
    

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 

 

Total distributions paid to Common Shareholders

       (0.56 )       (1.16 )       (1.24 )       (1.23 )       (1.23 )       (1.26 )  
    

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 

  Net Asset Value, End of Period

     $ 17.61     $ 17.86     $ 18.07     $ 16.92     $ 18.30     $ 19.12  

  Market Value, End of Period

     $ 16.33     $ 16.22     $ 17.40     $ 15.15     $ 16.63     $ 18.10  

Total return based on net
asset value(b)

       2.01 %(c)       5.80 %       15.33 %       (0.52 )%       2.63 %       9.19 %  

Total return based on market value(b)

       4.16 %(c)       (0.22 )%       24.03 %       (1.98 )%       (1.48 )%       3.14 %    

  Ratios to Average Net Assets  Applicable to Common  Shareholders:

                          

Ratio of total expenses to average net assets

       3.69 %(d)       3.33 %       3.21 %       3.01 %       3.07 %       3.00 %  

Ratio of net expenses to average net assets

       3.69 %(d)       3.33 %       3.21 %       3.01 %       3.07 %       3.00 %  

Ratio of net investment income to average net assets

       7.16 %(d)       6.24 %       7.11 %       6.71 %       6.22 %(e)       7.03 %(e)  

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

                               6.13 %       6.80 %  

  Supplemental Data:

                          

Portfolio turnover rate

       61.5 %(c)       102.2 %       109.5 %       66.1 %       80.0 %       72.0 %  

Net assets at end of period (000’s)

     $ 274,190     $ 278,070     $ 281,328     $ 263,438     $ 284,992     $ 297,731    

  Senior Securities:

                          

Total Series A Preferred Shares outstanding

                                     1,534  

Liquidation and market value per Series A Preferred Shares

                                   $ 20,000  

Asset coverage per share(f)

                                   $ 294,078  

Principal loan outstanding (in 000’s)

     $ 141,000     $ 141,000     $ 141,000     $ 149,269     $ 149,269     $ 122,705  

Asset coverage per $1,000 of loan outstanding

     $ 2,945 (g)      $ 2,972 (g)      $ 2,995 (g)      $ 2,765 (g)      $ 2,909 (g)      $ 3,676 (h)   

 

                                                         

 

(a) 

Based on weighted average outstanding shares.

(b)

Total return based on net asset value and total return based on market value assuming all distributions reinvested at reinvestment rate.

(c) 

Not annualized.

(d) 

Annualized.

(e) 

Net investment income ratio does not reflect payment to preferred shareholders.

(f) 

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.

(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.

(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 amount of borrowings outstanding.

 

See accompanying Notes to Financial Statements.  |  31


Apollo Tactical Income Fund Inc.

Financial Highlights

For a Common Share Outstanding

 

  Per Common Share Operating

  Performance:

  

For the

Six Months
Ended
June 30,
2018
(unaudited)

 

For the

Year

Ended
December 31,
2017

 

For the

Year

Ended
December 31,
2016

 

For the

Year

Ended
December 31,
2015

 

For the

Year

Ended
December 31,
2014

 

For the
Period

Ended
December 31,
2013(a)

    

 

  Net Asset Value, Beginning of Period

     $ 17.44     $ 17.18     $ 15.97     $ 18.21     $ 19.51     $ 19.10 (b)   
    

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 

 

  Income from Investment Operations:

                          

Net investment income(c)

       0.67       1.27       1.50       1.48       1.50       1.03  

Net realized and unrealized gain/(loss) on investments and unfunded loan commitments

       (0.18 )       0.28       1.23       (2.16 )       (1.14 )       0.39  
    

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 

Total from investment operations

       0.49       1.55       2.73       (0.68 )       0.36       1.42  
    

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 

  Less Distributions Paid to Common   Shareholders from:

                          

Net investment income

       (0.60 )       (1.29 )       (1.52 )       (1.55 )       (1.50 )       (0.96 )  

Net realized gain on investments

                         (0.01 )       (0.16 )       (0.01 )  
    

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 

Total distributions paid to Common Shareholders

       (0.60 )       (1.29 )       (1.52 )       (1.56 )       (1.66 )       (0.97 )  
    

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 

Common share offering charges to paid-in capital

                                     (0.04 )  
    

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 

  Net Asset Value, End of Period

     $ 17.33     $ 17.44     $ 17.18     $ 15.97     $ 18.21     $ 19.51  

  Market Value, End of Period

     $ 15.60     $ 15.75     $ 15.43     $ 13.89     $ 15.96     $ 18.00  

Total return based on net
asset value(d)

       3.26 %(e)       9.87 %       19.34 %       (2.91 )%       2.63 %       7.94 %(e)  

Total return based on market value(d)

       2.92 %(e)       10.47 %       23.24 %       (3.65 )%       (2.51 )%       (4.90 )%(e)    

  Ratios to Average Net Assets  Applicable to Common  Shareholders:

                          

Ratio of total expenses to average net assets

       3.79 %(f)       3.53 %       3.36 %       2.97 %       2.90 %       2.58 %(f)  

Ratio of net expenses to average net assets

       3.79 %(f)       3.53 %       3.36 %       2.97 %       2.90 %       2.55 %(f)  

Ratio of net investment income to average net assets

       7.70 %(f)       7.27 %       9.20 %       8.22 %       7.63 %       6.38 %(f)  

  Supplemental Data:

                          

Portfolio turnover rate

       67.9 %(e)       111.8 %       111.6 %       67.6 %       78.7 %       72.4 %(e)  

Net assets at end of period (000’s)

     $ 250,707     $ 252,265     $ 248,424     $ 230,995     $ 263,428     $ 282,177    

  Senior Securities:

                          

Principal loan outstanding (in 000’s)

     $ 126,500     $ 138,000     $ 138,000     $ 138,000     $ 138,000     $ 138,000  

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

     $ 2,982     $ 2,828     $ 2,800     $ 2,674     $ 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.

 

32  |  See accompanying Notes to Financial Statements.


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements

June 30, 2018 (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 diversified, closed-end management investment companies. Each Fund was previously registered as a non-diversified investment company. 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 U.S. 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.

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.

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

 

Semi-Annual Report  |  33


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements (continued)

June 30, 2018 (unaudited)

 

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, common stock, structured products and preferred stock 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.

 

34  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements (continued)

June 30, 2018 (unaudited)

 

The valuation techniques used by the Funds to measure fair value at June 30, 2018 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, 2018 are as follows:

 

 

  Apollo Senior Floating Rate Fund Inc.

 

                 
                 
     Total Fair Value at
June 30, 2018
  

Level 1

Quoted Price

  Level 2
Significant
Observable
Inputs
  Level 3  
Significant  
Unobservable  
Inputs  
                 

 

Assets:

                 

Cash and Cash Equivalents

     $ 19,411,362      $ 19,411,362     $     $

Senior Loans

       357,920,331              344,131,010       13,789,321

Corporate Notes and Bonds

       41,374,488              41,366,552       7,936

Common Stock

       1,165,683              1,066,281       99,402

Preferred Stock

       3,942,277                    3,942,277

Warrants

       2,522                    2,522

Net unrealized appreciation on Unfunded Loan Commitments

       12,479              12,479      
    

 

 

      

 

 

     

 

 

     

 

 

 

Total Assets

     $ 423,829,142        $ 19,411,362     $ 386,576,322     $ 17,841,458
    

 

 

      

 

 

     

 

 

     

 

 

 

The following is a reconciliation of Level 3 holdings for which significant unobservable inputs were used in determining fair value as of June 30, 2018:

 

 

  Apollo Senior Floating Rate Fund Inc.

 

                 
                 
     Total   Senior Loans   Corporate
Notes
and Bonds
  Common
Stock
   Preferred
Stock
   Warrants  

Unfunded

Loan
  Commitments  

                              

 

Total Fair Value, beginning of period

    

 

$

 

25,664,960

 

   

 

$

 

21,655,599

 

   

 

$

 

        8,775

 

   

 

$

 

        68,975

 

    

 

$

 

3,915,225

 

    

 

$

 

 

   

 

 

 

$16,386

 

 

Purchases, including capitalized PIK

       4,131,168       4,122,761                                   8,407      

Sales/Paydowns

       (10,481,603 )       (10,474,468 )       (7,135 )                          

Accretion/(amortization) of discounts/ (premiums)

       256,745       256,745                                

Net realized gain/(loss)

       (8,833 )       (13,584 )       4,751                          

Change in net unrealized appreciation/ (depreciation)

       (95,050 )       (138,357 )       1,545       30,427        27,052        (5,885 )       (9,832 )

Transfers into Level 3

       1,021,243       1,021,243                                

Transfers out of Level 3

       (2,647,172 )       (2,640,618 )                                 (6,554 )
    

 

 

     

 

 

     

 

 

     

 

 

      

 

 

      

 

 

     

 

 

 

Total Fair Value, end of period

     $ 17,841,458     $ 13,789,321     $ 7,936     $ 99,402      $ 3,942,277      $ 2,522         $
    

 

 

     

 

 

     

 

 

     

 

 

      

 

 

      

 

 

     

 

 

 

Assets were transferred from Level 2 to Level 3 or from Level 3 to Level 2 as a result of changes in levels of liquid market observability when subject to various criteria as discussed above. There were no transfers between Level 1 and Level 2 fair value measurement during the period shown. The net change in unrealized appreciation/(depreciation) attributable to Level 3 investments still held at June 30, 2018 was $144,155.

 

Semi-Annual Report  |  35


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements (continued)

June 30, 2018 (unaudited)

 

The following table provides quantitative measures used to determine the fair values of the Level 3 investments as of June 30, 2018:

 

  Apollo Senior Floating Rate Fund Inc.

    

  Assets    Fair Value at
June 30, 2018
        Valuation Technique(s)(a)    Unobservable Input(s)          Range of Unobservable      
Input(s) Utilized
                  

 

Senior Loans

    

 

$

 

8,107,760

 

       

 

Independent pricing service and/or broker quotes

  

Vendor and/or

broker quotes

  

 

N/A

       4,465,411        

Discounted Cash Flow(b)

   Discount Rate(b)    17.7%
       559,383        

Recoverability(c)

   EBITDA / EV Multiple(c)    $7m / 3.9x
       656,767        

Recoverability(d)

   Liquidation Proceeds(d)    $28.1m
              

Recoverability(d)

   Liquidation Proceeds(d)    $0

Corporate Notes and Bonds

       7,936        

Discounted Cash Flow(b)

   Discount Rate(b)    25.0%
            

Recoverability(d)

   Liquidation Proceeds(d)    $7m
              

Recoverability(d)

   Liquidation Proceeds(d)    $0
              

Recoverability(c)

   EBITDA / EV Multiple(c)    $7m / 3.9x
              

Recoverability(d)

   Liquidation Proceeds(d)    $28.1m

Common Stock

       62,959        

Option Model(e)

   Volatility(e)    21.4%
       36,443        

Independent pricing service and/or broker quotes

  

Vendor and/or

broker quotes

   N/A

Preferred Stock

       3,942,277        

Discounted Cash Flow(b)

   Discount Rate(b)    8.62%

Warrants

       2,522        

Independent pricing service and/or broker quotes

  

Vendor and/or

broker quotes

   N/A
    

 

 

               

Total Fair Value

     $ 17,841,458              
    

 

 

               
                  

 

(a) 

For the assets which have multiple valuation techniques, the Fund may rely on the techniques individually or in aggregate based on a weight ranging from 0-100%.

(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 utilized a recoverability approach to fair value these securities. The significant unobservable inputs used in the valuation model were EBITDA and enterprise value multiple. Significant increases or decreases in the input in isolation may result in a significantly higher or lower fair value measurement.

(d) 

The Fund utilized a recoverability approach to fair value this security, specifically a liquidation analysis. There are various, company specific inputs used in the valuation analysis that relate to the liquidation value of a company’s assets. The significant unobservable inputs used in the valuation model were liquidation proceeds. Significant increases or decreases in the input in isolation may result in a significantly higher or lower fair value measurement.

(e) 

The Fund utilized a Black-Scholes options pricing model to fair value this security. The significant unobservable input used in the valuation model was volatility. Significant increases or decreases in the input in isolation may result in a significantly higher or lower fair value measurement.

 

36  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements (continued)

June 30, 2018 (unaudited)

 

 

  Apollo Tactical Income Fund Inc.

 

                 
                 
         Total Fair Value at    
June 30, 2018
   Level 1
Quoted Price
 

 

Level 2
Significant
Observable
Inputs

  Level 3  
Significant  
Unobservable  
Inputs  
                 

 

Assets:

                 

Cash and Cash Equivalents

     $ 20,019,123      $ 20,019,123     $     $

Senior Loans

       285,615,183              273,202,004       12,413,179

Corporate Notes and Bonds

       49,671,009              49,634,532       36,477

Structured Products

       32,145,390              32,145,390      

Common Stock

       796,510        158,026       543,925       94,559

Preferred Stock

       3,942,277                    3,942,277

Warrants

       1,287                    1,287

Net unrealized appreciation on Unfunded Loan Commitments

       6,087              6,087      
    

 

 

      

 

 

     

 

 

     

 

 

 

         Total Assets

     $ 392,196,866      $ 20,177,149     $ 355,531,938     $ 16,487,779
    

 

 

      

 

 

     

 

 

     

 

 

 

The following is a reconciliation of Level 3 holdings for which significant unobservable inputs were used in determining fair value as of June 30, 2018:

 

 

  Apollo Tactical Income Fund Inc.

 

                          
                          
     Total   Senior
Loans
 

 

Corporate
Notes
and Bonds

  Common
Stock
   Preferred
Stock
       Warrants    
                          

 

Total Fair Value, beginning of the period

     $ 23,768,803     $ 19,745,730     $ 40,335     $ 67,513      $ 3,915,225      $

Purchases, including capitalized PIK

       3,663,676       3,659,387                           4,289

Sales/Paydowns

       (9,509,935 )       (9,477,140 )       (32,795 )                    

Accretion/(amortization) of discounts/(premiums)

       208,100       208,100                          

Net realized gain/(loss)

       252,191       230,353       21,838                    

Change in net unrealized appreciation/(depreciation)

       (52,825 )       (111,020 )       7,099       27,046        27,052        (3,002 )

Transfer into Level 3

       1,021,243       1,021,243                          

Transfers out of Level 3

       (2,863,474 )       (2,863,474 )                          
    

 

 

     

 

 

     

 

 

     

 

 

      

 

 

      

 

 

 

Total Fair Value, end of period

     $ 16,487,779     $ 12,413,179     $ 36,477     $         94,559      $ 3,942,277      $ 1,287
    

 

 

     

 

 

     

 

 

     

 

 

      

 

 

      

 

 

 

Assets were transferred from Level 2 to Level 3 or from Level 3 to Level 2 as a result of changes in levels of liquid market observability when subject to various criteria as discussed above. There were no transfers between Level 1 and Level 2 fair value measurement during the period shown. The net change in unrealized appreciation/(depreciation) attributable to Level 3 investments still held at June 30, 2018 was $182,474.

 

Semi-Annual Report  |  37


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements (continued)

June 30, 2018 (unaudited)

 

The following table provides quantitative measures used to determine the fair values of the Level 3 investments as of June 30, 2018:

 

  Apollo Tactical Income Fund Inc.                         
                  

  Assets

 

  

Fair Value at
June 30, 2018

 

       

Valuation Technique(s)(a)

 

  

Unobservable Input(s)

 

  

  Range of Unobservable  
Input(s) Utilized

 

                  

 

Senior Loans

    

 

$

 

7,430,103

 

       

 

Independent pricing service and/or broker quotes

  

 

Vendor and/or

broker quotes

  

 

N/A

       4,121,918        

Discounted Cash Flow(b)

   Discount Rate(b)    17.7%
       168,572        

Recoverability(c)

   EBITDA / EV Multiple(c)    $7m / 3.9x
       656,767        

Recoverability(d)

   Liquidation Proceeds(d)    $28.1m
              

Recoverability(d)

   Liquidation Proceeds(d)    $0
       35,819        

Discounted Cash Flow(b)

   Discount Rate(b)    2.84%
            

Recoverability(e)

   Estimated Transaction Value(e)    N/A

Corporate Notes and Bonds

       36,477        

Discounted Cash Flow(b)

   Discount Rate(b)    25.0%
            

Recoverability(d)

   Liquidation Proceeds(d)    $7m
              

Recoverability(d)

   Liquidation Proceeds(d)    $0

Common Stock

              

Recoverability(c)

   EBITDA / EV Multiple(c)    $7m / 3.9x
              

Recoverability(d)

   Liquidation Proceeds(d)    $28.1m
       58,116        

Option Model(f)

   Volatility(f)    21.4%
       36,443        

Independent pricing service and/or broker quotes

  

Vendor and/or

broker quotes

   N/A

Preferred Stock

       3,942,277        

Discounted Cash Flow(b)

   Discount Rate(b)    8.62%

Warrants

       1,287        

Independent pricing service and/or broker quotes

  

Vendor and/or

broker quotes

   N/A
    

 

 

               

Total Fair Value

     $ 16,487,779              
    

 

 

               
                  

 

(a) 

For the assets which have multiple valuation techniques, the Fund may rely on the techniques individually or in aggregate based on a weight ranging from 0-100%.

(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 utilized a recoverability approach to fair value these securities. The significant unobservable inputs used in the valuation model were EBITDA and enterprise value multiple. Significant increases or decreases in the input in isolation may result in a significantly higher or lower fair value measurement.

(d) 

The Fund utilized a recoverability approach to fair value this security, specifically a liquidation analysis. There are various, company specific inputs used in the valuation analysis that relate to the liquidation value of a company’s assets. The significant unobservable inputs used in the valuation model were liquidation proceeds. Significant increases or decreases in the input in isolation may result in a significantly higher or lower fair value measurement.

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