Apollo Senior Floating Rate Fund Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

Investment Company Act file number            811-22481                             

 

 

Apollo Senior Floating Rate Fund Inc.

 
  (Exact name of registrant as specified in charter)  
  9 West 57th Street  
 

New York, New York 10019

 
  (Address of principal executive offices) (Zip code)  
  Joseph Moroney, President  
  9 West 57th Street  
 

New York, New York 10019

 
  (Name and address of agent for service)  

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

Date of fiscal year end:  December 31

Date of reporting period:  June 30, 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.

(e) 

The Fund utilized a recoverability approach to fair value this security. The significant unobservable input used in the valuation model was an estimated transaction value. Significant increases or decreases in the input in isolation may result in a significantly higher or lower fair value measurement.

(f) 

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.

 

38  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements (continued)

June 30, 2018 (unaudited)

 

Cash and Cash Equivalents

Cash and cash equivalents of the Funds consist of cash held in bank accounts and liquid investments with maturities, at the date of acquisition, not exceeding 90 days that, at times, may exceed federally insured limits. As of June 30, 2018, cash and cash equivalents were comprised of cash deposited with U.S. financial institutions in which carrying value approximated fair value and are considered to be Level 1 in the fair value hierarchy.

Industry Classifications

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

Fair Value of Financial Instruments

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

Securities Transactions and Investment Income

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

The Funds hold investments that have designated payment-in-kind (“PIK”) interest. PIK interest is included in interest income and reflected as a receivable in accrued interest up to the payment date. On payment dates, the Funds capitalize the accrued interest receivable as an additional investment and mark it at the fair value associated with the position.

U.S. Federal Income Tax Status

The Funds intend to maintain their status each year as regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and will distribute substantially all of their net investment income and net capital gains, if any, for their tax years. The Funds may elect to incur excise tax if it is deemed prudent by the Board from a cash management perspective or in the best interest of shareholders due to other facts and circumstances. For the year ended December 31, 2017, AFT and AIF did not record a U.S. federal excise tax provision. The Funds did not pay any excise tax during 2018 related to the 2017 tax year. No federal income tax provision or excise tax provision is required for the six months ended June 30, 2018.

The Funds have followed the authoritative guidance on accounting for and disclosure of uncertainty in tax positions, which requires the Funds to determine whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Funds have determined that there was no material effect on the financial statements from following this authoritative guidance. In the normal course of business, the Funds are subject to examination by federal, state and local jurisdictions, where applicable, for tax years for which applicable statutes of limitations have not expired. The statute of limitations on AFT’s federal and state tax filings remains open for the years ended December 31, 2014 to 2017. The statute of limitations on AIF’s federal and state fillings remains open for the years ended December 31, 2014 to 2017.

Distributions to Common Shareholders

The Funds intend to make regular monthly cash distributions of all or a portion of their net investment income available to common shareholders. The Funds intend to pay common shareholders at least annually all or substantially all of their capital gains and net investment income after the payment of dividends and interest owed with respect to outstanding preferred shares and/or notes or other forms of leverage utilized by the Funds, although for cash management purposes, the Funds may elect to retain distributable amounts and pay excise tax as described above. If the Funds make a long-term capital gain distribution, they will be required to allocate such gain between the common shares and any preferred shares issued by the Funds in proportion to the total dividends paid to each class for the year in which the income is realized.

 

Semi-Annual Report  |  39


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements (continued)

June 30, 2018 (unaudited)

 

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

Asset Segregation

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

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

Investment Advisory Fee

The Adviser provides certain investment advisory, management and administrative services to the Funds pursuant to investment advisory and management agreements with each of the Funds. For its services, each Fund pays the Adviser monthly at the annual rate of 1.0% of the average daily value of the Fund’s managed assets. Managed assets are defined as the total assets of a Fund (including any assets attributable to any preferred shares that may be issued or to money borrowed or notes issued by the Fund) minus the sum of the Fund’s accrued liabilities, including accrued interest and accumulated dividends (other than liabilities for money borrowed (including the liquidation preference of preferred shares) or notes issued). The Adviser may elect from time to time, in its sole discretion, to waive its receipt of the advisory fee from a Fund. If the Adviser elects to waive its compensation, such action may have a positive effect on the Fund’s performance or yield. The Adviser is under no obligation to waive its fees, may elect not to do so, may decide to waive its compensation periodically or may decide to waive its compensation on only one of the Funds at any given time. For the six months ended June 30, 2018, the Adviser earned fees of $2,078,598 and $1,915,599 from AFT and AIF, respectively.

Administrative Services and Expense Reimbursements

The Funds and the Adviser have entered into Administrative Services and Expense Reimbursement Agreements pursuant to which the Adviser provides certain administrative services, personnel and facilities to the Funds and performs operational services necessary for the operation of the Funds not otherwise provided by other service providers of the Funds. These services may include, without limitation, certain bookkeeping and recordkeeping services, compliance and legal services, investor relations assistance, and accounting and auditing support. Pursuant to these agreements, the Funds will reimburse the Adviser at cost, at the Adviser’s request, for certain costs and expenses incurred by the Adviser that are necessary for the administration and operation of the Funds. In addition, the Adviser or one of its affiliates may pay certain expenses on behalf of the Funds and then allocate these expenses to the Funds for reimbursement. For the six months ended June 30, 2018, the Adviser provided services under these agreements totaling $342,731 and $337,845 for AFT and AIF, respectively, which is shown in the Statements of Operations as administrative services of the Adviser. Included in these amounts is approximately $45,300 and $45,300 for AFT and AIF, respectively, of remuneration for officers of the Funds. The Adviser did not waive the right to expense reimbursements and investment advisory fees for either Fund during the six months ended June 30, 2018.

Each Fund has also entered into an Administration and Accounting Services Agreement (the “Administration Agreements”) with The Bank of New York Mellon (“BNY Mellon”). Under the Administration Agreements, BNY Mellon provides certain administrative services necessary for the operation of the Funds, including maintaining the Funds’ books and records, providing accounting services and preparing regulatory filings. The Funds pay BNY Mellon for these services.

 

40  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements (continued)

June 30, 2018 (unaudited)

 

BNY Mellon also serves as the Funds’ custodian. BNY Mellon Investment Servicing (US) Inc. (“BNYMIS”) serves as the Funds’ transfer agent. BNY Mellon and BNYMIS provided services totaling $131,597 and $126,662 for AFT and AIF, respectively, for the six months ended June 30, 2018, which are included in fund administration and accounting services in the Statements of Operations.

Board of Directors Fees

On an annual basis, AFT and AIF pay each member of the Board who is not an “interested person” (as defined in the Investment Company Act) of the Funds an annual retainer of $16,000 per Fund, plus $2,000 for each in-person Board meeting of a single Fund ($3,000, or $1,500 per Fund, for a joint meeting of both Funds), plus $1,000 for attendance at telephonic Board meetings of a single Fund or participation in special committee meetings of a single Fund not held in conjunction with regularly scheduled Board meetings ($1,500, or $750 per Fund, for a joint meeting of both Funds). In addition, the chairman of the audit committee receives $5,000 per year from each Fund. The Funds also reimburse independent Board members for travel and out-of-pocket expenses incurred in connection with such meetings, and the Funds split the cost of such expenses for meetings involving both AFT and AIF. Included in the Statements of Operations in Board of Directors fees for the six months ended June 30, 2018 is $63,264 and $63,264 of expenses related to the Board for each of AFT and AIF, respectively.

Note 4. Investment Transactions

For the six months ended June 30, 2018, the cost of investment purchases and proceeds from sales of securities and principal paydowns were as follows:

 

 

  Fund

 

  

 

Purchases

 

    

 

Sales

 

 
     

 

Apollo Senior Floating Rate Fund Inc.

  

 

 

 

$281,091,452

 

 

  

 

 

 

$287,336,107

 

 

Apollo Tactical Income Fund Inc.

 

    

 

286,566,809

 

 

 

    

 

300,638,456

 

 

 

The Funds are permitted to purchase and sell securities (“Cross-Trade”) from and to other Apollo entities pursuant to procedures approved by the Board in compliance with Rule 17a-7 under the Investment Company Act (the “Rule”). Each Cross-Trade is executed at a fair market price in compliance with provisions of the Rule. For the six months ended June 30, 2018, the Funds engaged in Cross-Trade activities with sales proceeds of $2,911,411 and $1,488,213 for AFT and AIF, respectively, which resulted in net realized losses of $125,116 and $61,264, respectively.

Note 5. Risks

Senior Loans

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

Senior Loans are subject to the risk of non-payment of scheduled interest or principal. Such non-payment would result in a reduction of income to the Funds, a reduction in the value of the investment and a potential decrease in the NAV of the Funds. There can be no assurance that the liquidation of any collateral securing a Senior Loan would satisfy the Borrower’s obligation in the event of non-payment of scheduled interest or principal payments, or that the collateral could be readily liquidated. In the event of bankruptcy or insolvency of a Borrower, the Funds could experience delays or limitations with respect to their ability to realize the benefits of the collateral securing a Senior Loan. The collateral securing a Senior Loan may lose all or substantially all of its value in the event of the bankruptcy or insolvency of a Borrower. Some Senior Loans are subject to the risk that a court, pursuant to fraudulent conveyance or other similar laws, could subordinate such Senior Loans to presently existing or future indebtedness of the Borrower or take other action detrimental to the holders of Senior Loans including, in certain circumstances, invalidating such Senior Loans or causing interest previously paid to be refunded to the Borrower.

 

Semi-Annual Report  |  41


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements (continued)

June 30, 2018 (unaudited)

 

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

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

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

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

Corporate Bonds

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

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

Subordinated Loans

Subordinated loans generally are subject to similar risks as those associated with investments in Senior Loans, except that such loans are subordinated in payment and/or lower in lien priority to first lien holders. In the event of default on a subordinated loan, the first priority lien holder has first claim to the underlying collateral of the loan. Subordinated loans are subject to the additional risk that the cash flow of the Borrower and property securing the loan or debt, if any, may be insufficient to meet scheduled payments after giving effect to the senior unsecured or senior secured obligations of the Borrower. This risk is generally higher for subordinated unsecured loans or debt that are not backed by a security interest in any specific collateral. Subordinated loans generally have greater price volatility than Senior Loans and may be less liquid.

 

42  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements (continued)

June 30, 2018 (unaudited)

 

Structured Products

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

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

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

Note 6. Common Shares

Common share transactions were as follows:

 

 

  Apollo Senior Floating Rate Fund Inc.

 

 
           
    

 

Six Months Ended

June 30, 2018

 

    

 

Year Ended

December 31, 2017

 

 
    

 

Shares

 

    

 

Amount

 

    

 

Shares

 

    

 

Amount

 

 
           

 

Common shares outstanding, beginning of the period

  

 

 

 

15,573,061

 

 

     $296,699,291        15,573,061        $296,701,729  

Common shares issued as reinvestment of dividends

                           

Permanent differences reclassified (primarily non-deductible expenses)

                          (2,438
  

 

 

    

 

 

    

 

 

    

 

 

 

 

Common shares outstanding, end of the period

 

     15,573,061        $296,699,291        15,573,061        $296,699,291  
  

 

 

    

 

 

    

 

 

    

 

 

 
           

 

  Apollo Tactical Income Fund Inc.

 

 
           
    

 

Six Months Ended

June 30, 2018

 

    

 

Year Ended

December 31, 2017

 

 
    

 

Shares

 

    

 

Amount

 

    

 

Shares

 

    

 

Amount

 

 
           

 

Common shares outstanding, beginning of the period

  

 

 

 

14,464,026

 

 

  

 

 

 

$275,624,904

 

 

  

 

 

 

14,464,026

 

 

  

 

 

 

$275,624,904

 

 

Common shares issued as reinvestment of dividends

                           

Permanent differences reclassified (primarily non-deductible expenses)

                           
  

 

 

    

 

 

    

 

 

    

 

 

 

 

Common shares outstanding, end of the period

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

 

 

    

 

 

    

 

 

    

 

 

 

 

Semi-Annual Report  |  43


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements (continued)

June 30, 2018 (unaudited)

 

Dividends declared on common shares with a record date of January 1, 2018 or later through the date of this report were as follows:

 

  Apollo Senior Floating Rate Fund Inc.                
     

  Dividend

  Declaration

  Date

  

Ex-Dividend

Date

  

Record

Date

  

Payment

Date

  

Per

Share

Amount

    

Gross

Distribution

    

Cash

Distribution

    

 

Value of new

Common

Shares

Issued

 
     

December 29, 2017

   January 17, 2018    January 18, 2018    January 31, 2018    $ 0.0900      $ 1,401,575      $ 1,401,575        —    

January 23, 2018

   February 13, 2018    February 14, 2018    February 28, 2018    $ 0.0900      $ 1,401,575      $ 1,401,575        —    

February 22, 2018

   March 15, 2018    March 16, 2018    March 29, 2018    $ 0.0960      $ 1,495,014      $ 1,495,014        —    

March 26, 2018

   April 16, 2018    April 17, 2018    April 30, 2018    $ 0.0960      $ 1,495,014      $ 1,495,014        —    

April 26, 2018

   May 16, 2018    May 17, 2018    May 31, 2018    $ 0.0960      $ 1,495,014      $ 1,495,014        —    

May 23, 2018

   June 15, 2018    June 18, 2018    June 29, 2018    $ 0.0960      $ 1,495,014      $ 1,495,014        —    

June 21, 2018

   July 17, 2018    July 18, 2018    July 31, 2018    $ 0.0960      $ 1,495,014      $ 1,495,014        —    

July 23, 2018*

   August 17, 2018    August 20, 2018    August 31, 2018    $ 0.0960           

August 15, 2018*

   September 14, 2018    September 17, 2018    September 28, 2018    $ 0.0980           

* Declared subsequent to June 30, 2018.

 

              
              
  Apollo Tactical Income Fund Inc.                
     

  Dividend

  Declaration

  Date

  

Ex-Dividend

Date

  

Record

Date

  

Payment

Date

  

Per

Share

Amount

    

Gross

Distribution

    

Cash

Distribution

    

 

Value of new

Common

Shares

Issued

 
     

December 29, 2017

   January 17, 2018    January 18, 2018    January 31, 2018    $ 0.1000      $ 1,446,403      $ 1,446,403        —    

January 23, 2018

   February 13, 2018    February 14, 2018    February 28, 2018    $ 0.1000      $ 1,446,403      $ 1,446,403        —    

February 22, 2018

   March 15, 2018    March 16, 2018    March 29, 2018    $ 0.1000      $ 1,446,403      $ 1,446,403        —    

March 26, 2018

   April 16, 2018    April 17, 2018    April 30, 2018    $ 0.1000      $ 1,446,403      $ 1,446,403        —    

April 26, 2018

   May 16, 2018    May 17, 2018    May 31, 2017    $ 0.1000      $ 1,446,403      $ 1,446,403        —    

May 23, 2018

   June 15, 2018    June 18, 2018    June 29, 2018    $ 0.1040      $ 1,504,259      $ 1,504,259        —    

June 21, 2018

   July 17, 2018    July 18, 2018    July 31, 2017    $ 0.1040      $ 1,504,259      $ 1,504,259        —    

July 23, 2018*

   August 17, 2018    August 20, 2018    August 31, 2018    $ 0.1040           

August 15, 2018*

   September 14, 2018    September 17, 2018    September 28, 2018    $ 0.1070           

* Declared subsequent to June 30, 2018.

 

              

Note 7. Federal Tax Information

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

The tax character of distributions paid by AFT during the fiscal year ended December 31, 2017 was as follows:

 

  Apollo Senior Floating Rate Fund Inc.       
  
  Distributions paid from Ordinary Income: *    2017  
  

Common Shareholders

   $ 18,064,751  
  

 

 

 

Total Distributions

   $ 18,064,751  
  

 

 

 

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

The tax character of distributions paid by AIF during the fiscal year ended December 31, 2017 was as follows:

 

  Apollo Tactical Income Fund Inc.       
  
  Distributions paid from Ordinary Income: *    2017  
  

Common Shareholders

   $ 18,586,273  
  

 

 

 

Total Distributions

   $ 18,586,273  
  

 

 

 

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

 

44  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements (continued)

June 30, 2018 (unaudited)

 

As of December 31, 2017, the most recent tax year end, the components of distributable earnings on a tax basis were as follows:

 

  Fund   

Undistributed

Ordinary

Income

    

Undistributed

Long-Term

Capital

Gains

    

Net

Unrealized

Appreciation/

(Depreciation)*

   

Accumulated

Capital and

Other Losses

 
          

Apollo Senior Floating Rate Fund Inc.

     $321,272        $—                $(8,087,187     $(10,863,498

Apollo Tactical Income Fund Inc.

     468,031        —                (4,590,206     (19,238,066

* Any differences between book basis and tax basis net unrealized appreciation/(depreciation) are primarily due to the deferral of losses from wash sales, defaulted security interest adjustments, underlying investment partnership adjustments and disallowed losses due to restructuring.

For federal income tax purposes, capital loss carryforwards are available to offset future capital gains. As of December 31, 2017, long-term capital loss carryforwards totaled $10,863,498 for AFT and $19,238,066 for AIF, which may be carried forward for an unlimited period. During the year ended December 31, 2017, AFT utilized $967,771 of capital loss carryforwards.

Unrealized appreciation/(depreciation) and basis of investments for U.S. federal income tax purposes at June 30, 2018 were as follows:

 

    

Apollo Senior

Floating Rate

Fund Inc.

   

Apollo

Tactical

Income

Fund Inc.

 
    

Federal tax basis, cost

   $ 410,529,238     $ 376,153,876  
  

 

 

   

 

 

 

Unrealized appreciation

   $ 3,054,124     $ 3,748,566  

Unrealized depreciation

     (9,178,061     (7,730,785
  

 

 

   

 

 

 

Net unrealized appreciation/(depreciation)*

   $ (6,123,937   $ (3,982,219
  

 

 

   

 

 

 

* Any differences between book basis and tax basis net unrealized appreciation/(depreciation) are primarily due to the deferral of losses from wash sales, defaulted security interest adjustments, underlying investment partnership adjustments and disallowed losses due to restructuring.

Note 8. Credit Agreements and Preferred Shares

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

Apollo Senior Floating Rate Fund Inc.

On May 11, 2016, AFT entered into a $150,000,000 credit facility (the “Credit Facility”) with Sumitomo Mitsui Banking Corporation (“SMBC”) as lender. Under the terms of the Credit Facility, AFT may borrow a single term loan not to exceed $112,500,000 (the “Term Loan”) and may borrow up to an additional $37,500,000 on a revolving basis (the “Revolving Loans”). AFT has granted a security interest in substantially all of its assets in the event of default under the Credit Facility. AFT may borrow on a revolving basis until May 11, 2019, at which time any loans outstanding under the Credit Facility must be repaid in full. The Fund pays SMBC a quarterly commitment fee equal to 0.15% per annum on the average daily amount of available commitments. As of June 30, 2018, $9,000,000 of the available revolving credit remains undrawn. As of June 30, 2018, AFT has $141,000,000 principal outstanding under the Credit Facility, which is comprised of a Term Loan of $112,500,000 and Revolving Loans totaling $28,500,000, all of which bear interest at a rate of LIBOR plus 1.05%.

 

Semi-Annual Report  |  45


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements (continued)

June 30, 2018 (unaudited)

 

For the six months ended June 30, 2018, the average daily principal loan balance outstanding was $141,000,000, the weighted average annual interest rate was 2.82% and the interest expense, which is included on the Statements of Operations in interest expense, was $1,997,812.

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

The Credit Facility contains certain customary affirmative and negative covenants, including limitations on debt, liens and restricted payments, as well as certain portfolio limitations and customary prepayment provisions, including a requirement to prepay loans or take certain other actions if certain asset value tests are not met. As of June 30, 2018, AFT was not aware of any instances of non-compliance related to the Credit Facility.

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

Apollo Tactical Income Fund Inc.

On April 20, 2018, AIF entered into a $133,000,000 credit facility (the “New Credit Facility”) with SMBC as lender. Under the terms of the New Credit Facility, AIF may borrow a single term loan not to exceed $125,000,000 (the “New Term Loan”) and may borrow up to an additional $8,000,000 on a revolving basis (the “New Revolving Loans”). AIF has granted a security interest in substantially all of its assets in the event of default under the New Credit Facility. AIF may borrow on a revolving basis until April 20, 2020, at which time any loans outstanding under the New Credit Facility must be repaid in full. The Fund pays SMBC a quarterly commitment fee equal to 0.15% per annum on the average daily amount of available commitments. As of June 30, 2018, $6,500,000 of the available revolving credit remains undrawn. As of June 30, 2018, AIF has $126,500,000 principal outstanding under the New Credit Facility, which is comprised of a New Term Loan of $125,000,000 and New Revolving Loans totaling $1,500,000, all of which bear interest at a rate of LIBOR plus 0.90%.

Prior to April 20, 2018, AIF had a $138,000,000 revolving credit facility with JPMorgan Chase Bank, N.A. as lender and administrative agent (the “JPM Facility”). The JPM Facility expired on April 20, 2018. Borrowings under the JPM Facility bore interest at a rate of LIBOR plus 1.15%.

For the six months ended June 30, 2018, the average daily principal loan balance outstanding was $133,273,481, the weighted average annual interest rate was 2.82% and the interest expense, which is included on the Statements of Operations in interest expense, was $1,890,610.

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

The New Credit Facility contains certain customary affirmative and negative covenants, including limitations on debt, liens and restricted payments, as well as certain portfolio limitations and customary prepayment provisions, including a requirement to prepay loans or take certain other actions if certain asset value tests are not met. As of June 30, 2018, AIF was not aware of any instances of non-compliance related to the New Credit Facility.

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

 

46  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Notes to Financial Statements (continued)

June 30, 2018 (unaudited)

 

Note 9. General Commitments and Contingencies

As of June 30, 2018, the Funds had unfunded loan commitments outstanding, which could be extended at the option of the borrower, as detailed below:

 

Borrower    AFT      AIF       

 

    

Access CIG, LLC

   $ 134,821      $ 134,821     

A-L Parent, LLC*

     1,310,878            

Authentic Brands Group, LLC*/**

     344,947            

Authentic Brands Group, LLC 2L*/**

     136,731            

Charming Charlie, LLC

     619,859        186,797     

Envision Healthcare Corp. Backstop

     4,108,647        3,821,997     

Securus Technologies Holdings, Inc.***

     697,954        697,954     

Thomas Reuters Corp. Backstop

     3,424,023        3,185,137     

Westinghouse Electric Co., LLC Bridge Loan****

     5,803,499        5,398,604     
  

 

 

    

 

 

    

Total unfunded loan commitments

   $ 16,581,359      $ 13,425,310     
  

 

 

    

 

 

    

 

*

The loan commitment was held in AFT only.

 

**

On July 3, 2018, the loan commitment was fully funded.

 

***

The loan commitment was partially sold subsequent to June 30, 2018.

 

****

On July 26, 2018, the loan commitment was cancelled in its entirety.

Unfunded loan commitments are marked to market on the relevant day of the valuation in accordance with the Funds’ valuation policies. Any related unrealized appreciation/(depreciation) on unfunded loan commitments is recorded on the Statements of Assets and Liabilities and the Statements of Operations. For the six months ended June 30, 2018, AFT and AIF recorded a net change in unrealized appreciation/(depreciation) on unfunded loan commitments totaling $(8,405) and $2,282, respectively.

Note 10. Indemnification

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

Note 11. Subsequent Events

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

 

Semi-Annual Report  |  47


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Additional Information

June 30, 2018 (unaudited)

Dividend Reinvestment Plan

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

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

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

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

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

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

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

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

European Risk

The Funds may invest a portion of their assets in credit instruments issued by issuers domiciled in Europe, including issuers domiciled in the United Kingdom (“UK”). Concerns regarding the sovereign debt of various Eurozone countries and proposals for investors to incur substantial write-downs and reductions in the face value of the sovereign debt of certain countries give rise to concerns about sovereign defaults, the possibility that one or more countries might leave the European Union or the Eurozone and various proposals (still under consideration and unclear in material respects) for support of affected countries and the Euro as a currency. The outcome of any such situation cannot be predicted. Sovereign debt defaults and European Union and/or Eurozone exits could have material adverse effects on investments by the Funds in

 

48  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Additional Information (continued)

June 30, 2018 (unaudited)

 

securities of European companies, including but not limited to the availability of credit to support such companies’ financing needs, uncertainty and disruption in relation to financing, customer and supply contracts denominated in Euro and wider economic disruption in markets served by those companies, while austerity and other measures that have been introduced in order to limit or contain these issues may themselves lead to economic contraction and resulting adverse effects for the Funds. Legal uncertainty about the funding of Euro denominated obligations following any breakup or exits from the Eurozone (particularly in the case of investments in securities of companies in affected countries) could also have material adverse effects on the Funds. The uncertainty in the wake of the UK’s “Brexit” referendum and subsequent political developments could have a negative impact on both the UK economy and the economies of other countries in Europe. The Brexit process also may lead to greater volatility in the global currency and financial markets, which could adversely affect the Funds. Global central banks may maintain historically low interest rates longer than was anticipated prior to the Brexit vote, which could adversely affect the Funds.

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

At a meeting of the Boards of Directors (together, the “Board” or the “Directors”) of Apollo Senior Floating Rate Fund Inc. (“AFT”) and Apollo Tactical Income Fund Inc. (“AIF”) (each, a “Fund” and together, the “Funds”) held on February 22, 2018, the Directors met in person to consider the approval of the Investment Advisory and Management Agreement between AFT and Apollo Credit Management, LLC (the “Adviser”) and the Investment Advisory and Management Agreement between AIF and the Adviser (each, an “Advisory Agreement” and together, the “Advisory Agreements”) for an additional one-year term. While the meetings occurred at the same time, the Directors considered each Advisory Agreement separately.

The Board has the responsibility under the Investment Company Act of 1940, as amended (the “1940 Act”), to approve annual renewal of each Fund’s Advisory Agreement at meetings of the Board called for the purpose of voting on such renewal. The Board generally receives, reviews and evaluates information concerning the services and personnel of the Adviser and its affiliates at quarterly meetings of the Board. While particular emphasis might be placed on information concerning the investment performance of each Fund, each Fund’s fees and expenses in comparison with other funds’ fees and expenses and the Adviser’s profitability at the meeting at which the renewal of the Advisory Agreements is considered, the process of evaluating each Fund’s investment advisory and management arrangements is an ongoing one.

In preparation for their review of the Advisory Agreements, all of the Directors who are not “interested persons,” as defined in the 1940 Act (the “Independent Directors”), of the Funds present at the meeting met with their independent counsel in an executive session. In considering whether to approve the Advisory Agreements, the Directors, including the Independent Directors, reviewed materials provided in advance of the meeting by the Adviser and counsel to the Independent Directors and other materials which included, among other things: (i) information concerning the services rendered to each Fund by the Adviser; (ii) information concerning the revenues generated and expenses incurred by the Adviser from the operation of each Fund; and (iii) a memorandum outlining the legal duties of the Board under the 1940 Act. The Board also reviewed information prepared by Strategic Insight, a third party service provider, which included information in respect of each Fund comparing (1) the Fund’s performance with that of a group of comparable funds selected by Strategic Insight (the “Peer Group”) and with a broader group of funds (the “Morningstar Category”) and (2) the Fund’s contractual and net management fees and total net expenses with those of its Peer Group and Morningstar Category.

Counsel to the Independent Directors discussed the factors outlined by the federal courts as relevant to a board’s consideration of the approval of an investment advisory agreement and referred the Directors to the materials provided in connection with the meeting. The Directors also received information regarding each Fund’s operations, expenses and performance periodically throughout the year.

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

Investment performance of the Funds and the Adviser. Representatives of the Adviser reviewed with the Board the performance of each Fund. Fund management discussed each Fund’s stock price, and its yield. Representatives of the Adviser compared each Fund’s yield (based on the ratio of net investment income to average net assets) to the average

 

Semi-Annual Report  |  49


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Additional Information (continued)

June 30, 2018 (unaudited)

 

yield of certain of its peer funds identified by the Adviser for each calendar year since the Fund’s inception. Fund management then discussed each Fund’s investment performance as compared to the performance of relevant reference indexes (the “Benchmarks”) for various periods. On a net asset value basis, AFT outperformed the Benchmarks for the one-year period ended December 31, 2017 and for the periods from inception to each of the years ended December 31, 2012-17, and underperformed the Benchmarks for the period from inception to December 31, 2011. On a net asset value basis, AIF outperformed the Benchmarks for the one-year period ended December 31, 2017 and for the periods from inception to each of the years ended December 31, 2013-17. On a market value basis, AFT outperformed one Benchmark and underperformed the other Benchmark for the one-year period ended December 31, 2017, outperformed one Benchmark and underperformed the other Benchmark for the period from inception to December 31, 2017, outperformed the Benchmarks for the period from inception to December 31, 2016 and underperformed the Benchmarks for the periods from inception to each of the years ended December 31, 2011-15. On a market value basis, AIF outperformed the Benchmarks for the one-year period ended December 31, 2017 and for the period from inception to December 31, 2017 and underperformed the Benchmarks for the periods from inception to each of the years ended December 31, 2013-16. Representatives of the Adviser next reviewed each Fund’s investment performance as compared to that of its Peer Group and Morningstar Category for various annual periods ended December 31, 2017. Each Fund ranked above the medians of its Peer Group and Morningstar Category for the various annual periods, except that AFT ranked slightly below the median, but still in the second quartile, of its Morningstar Category for the one-year period.

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

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

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

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

 

50  |  Semi-Annual Report


Apollo Senior Floating Rate Fund Inc.

Apollo Tactical Income Fund Inc.

Additional Information (continued)

June 30, 2018 (unaudited)

 

Shareholder Meeting Results

On May 22, 2018, AFT held its Annual Meeting of Shareholders for the election of Directors. The proposal was approved by AFT’s shareholders and the results of the voting are as follows:

 

  NAME

 

  

FOR

 

    

WITHHELD

 

 
     

Barry Cohen

     13,549,123        899,346      

Elliot Stein, Jr.

     13,945,775        502,694      

On May 22, 2018, AIF held its Annual Meeting of Shareholders for the election of Directors. The proposal was approved by AIF’s shareholders and the results of the voting are as follows:

 

  NAME

 

  

FOR

 

    

WITHHELD

 

 
     

Barry Cohen

     12,888,843        93,774      

Elliot Stein, Jr.

     12,918,807        63,809      

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

 

Semi-Annual Report  |  51


Important Information About This Report

 

Investment Adviser

Apollo Credit Management, LLC

9 West 57th Street

New York, NY 10019

Administrator

The Bank of New York Mellon

4400 Computer Drive

Westborough, MA 01581

Transfer Agent

BNY Mellon Investment Servicing (US) Inc.

P.O. Box 30170

College Station, TX 77842

Custodian

The Bank of New York Mellon

One Wall Street

New York, NY 10286

Independent Registered Public

Accounting Firm

Deloitte & Touche LLP

30 Rockefeller Plaza

New York, NY 10112

Fund Counsel

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

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

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to their portfolio securities, and the Funds’ proxy voting records for the most recent period ended June 30, 2018 are available (i) without charge, upon request, by calling 1-888-301-3838 and (ii) on the SEC’s website at http:// www.sec.gov.

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

 

 

52  |  Semi-Annual Report


Important Information About This Report (continued)

 

 

 

Privacy Policy

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

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

 

   

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

   

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

   

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

Disclosure of Information. We may share the information we collect with our affiliates and nonaffiliated third parties for our everyday business purposes, such as to process your transactions, maintain your investments in the Funds, and to respond to court orders and legal investigations. We also provide such information to our affiliates, attorneys, banks, auditors, securities brokers and service providers as may be necessary to facilitate the acceptance and management of your account or your investments in the Funds and to enable them to perform services on our behalf. We may also provide your name, address, telephone number, social security number or financial condition information to affiliates or nonaffiliated third parties, such as broker-dealers, engaged in marketing activities on our behalf, such as the solicitation of your investment in future funds managed by Apollo. We do not sell your personal information to third parties for their independent use.

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

Opt-Out Notice. We reserve the right to disclose nonpublic personal information about you to a nonaffiliated third party as discussed above. If you wish to limit the distribution of your personal information with our affiliates and nonaffiliated third parties, as described herein, you may do so by:

 

   

Calling us at 1-888-301-3838; or

   

Writing us at the following address:

Apollo Global Management, LLC

c/o: Apollo Senior Floating Rate Fund Inc., Apollo Tactical Income Fund Inc.

9 West 57th Street, 43rd Floor, New York, New York 10019

Attn: Cindy Z. Michel

The ability to opt-out of disclosure of nonpublic personal information about you may not apply to arrangements necessary to effect or administer a transaction in shares of a Fund or maintain or service your account.

If you choose to write to us, your request should include your name, address, telephone number and account number(s) to which the opt-out applies and the extent to which your personal information shall be withheld. If you are a joint account owner we will apply those instructions to the entire account. If you have accounts or relationships with our affiliates, you may receive multiple privacy policies from them, and will need to separately notify those companies of your privacy choices for those accounts or relationships.

Please understand that if you limit our sharing or our affiliated companies’ use of personal information, you and any joint account holder(s) may not receive information about our affiliated companies’ products and services, including products or services that could help you manage your financial resources and achieve your investment objectives.

If your shares are held in “street name” at a bank or brokerage, we do not have access to your personal information and you should refer to your bank’s or broker’s privacy policies for a statement of the treatment of your personal information.

 

Semi-Annual Report  |  53


 

 

 

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LOGO

9 West 57th Street, New York, NY 10019

1-888-301-3838 www.agmfunds.com

06/30/18


Item 2. Code of Ethics.

Not applicable to this filing.

Item 3. Audit Committee Financial Expert.

Not applicable to this filing.

Item 4. Principal Accountant Fees and Services.

Not applicable to this filing.

Item 5. Audit Committee of Listed Registrants.

Not applicable to this filing.

Item 6. Investments.

 

(a)

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

 

(b)

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

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable to this filing.

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

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


Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

None in the reporting period.

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

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

Item 11. Controls and Procedures.

 

  (a)

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

 

  (b)

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

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not applicable.

Item 13. Exhibits.

 

  (a)(1)

Not applicable.

 

  (a)(2)

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

 

  (a)(3)

Not applicable.

 

  (a)(4)

Not applicable.

 

  (b)

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


SIGNATURES

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

 

(Registrant)                             Apollo Senior Floating Rate Fund Inc.                                                            
By (Signature and Title)        /s/ Joseph Moroney                                                                                            

 Joseph Moroney, President

 (principal executive officer)

Date    8/20/18                                                                                                                                                  

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

 

By (Signature and Title)         /s/ Joseph Moroney                                                                                         

 Joseph Moroney, President

 (principal executive officer)

Date    8/20/18                                                                                                                                                  
By (Signature and Title)        /s/ Frank Marra                                                                                                 

 Frank Marra, Treasurer and Chief Financial Officer

 (principal financial officer)

Date    8/20/18