Company: ARI
Filing Date: 2025-02-10
Form Type: 10-K
Source: 0000950170-25-017122
Chunk: 84

Company: Apollo Commercial Real Estate Finance, Inc.
Filing Date: 2025-02-10
Form: 10-K
Item: Item 7
Chunk 84
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 whereby no single factor on its own (whether quantitative or qualitative) is given more weight in the assessment or is prescriptive as to which specific risk rating is assigned to a specific loan. We apply these various factors on a case-by-case basis depending on the facts and circumstances for each loan, and the different factors may be given different weightings in different situations. As of December 31, 2024, the weighted-average risk rating of the loan portfolio was 3.0.

The following table presents the carrying value of our loans by internal risk rating as of December 31, 2024 ($ in thousands):

    Risk Rating
     
    Number of Loans

    Total(1)

    % of Portfolio

    1

    —

    $
    —

    — %

    2

    3

    560,180

    7.9
    %

    3

    37

    6,169,860

    86.4
    %

    4

    2

    279,732

    3.9
    %

    5

    3

    125,220

    1.8
    %

    Total

    45

    $
    7,134,992

    100.0
    %

    General CECL Allowance(2)

    (30,836
    )

    Total carrying value, net

    $
    7,104,156

(1)Net of Specific CECL Allowance.

(2)$5.9 million of the General CECL Allowance for 2024 is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our consolidated balance sheets.

Leverage Policies

We use leverage for the sole purpose of financing our portfolio and not for the purpose of speculating on changes in interest rates. In addition to our secured debt arrangements, senior secured notes and senior secured term loan, we access additional sources of borrowings. Our charter and bylaws do not limit the amount of indebtedness we can incur; however, we are subject to and carefully monitor the limits placed on us by our credit providers and those that assign ratings on our company.

At December 31, 2024, our debt-to-equity ratio was 3.2 and our portfolio was comprised of $6.7 billion of commercial mortgage loans and $0.4 billion of subordinate