# EDGAR Filing Document

**Accession Number:** 0001837532
**File Stem:** 0001193125-23-011987
**Filing Date:** 2023-1
**Character Count:** 17834
**Document Hash:** de6ad846bdadeefe7d534e13d8ce5a32
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-011987.hdr.sgml**: 20230120

**ACCESSION NUMBER**: 0001193125-23-011987

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 2

**CONFORMED PERIOD OF REPORT**: 20230120

**ITEM INFORMATION**: Unregistered Sales of Equity Securities

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230120

**DATE AS OF CHANGE**: 20230120

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Apollo Debt Solutions BDC
- **CENTRAL INDEX KEY:** 0001837532
- **IRS NUMBER:** 000000000
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 814-01424
- **FILM NUMBER:** 23541008

**BUSINESS ADDRESS:**
- **STREET 1:** 9 WEST 57TH STREET
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10019
- **BUSINESS PHONE:** 212-515-3200

**MAIL ADDRESS:**
- **STREET 1:** 9 WEST 57TH STREET
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10019

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**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**WASHINGTON, D.C. 20549** 

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**FORM 8-K** 

**CURRENT REPORT** 

**Pursuant to Section 13 or 15(d) of the** 

**Securities Exchange Act of 1934** 

**Date of Report (Date of earliest event reported): January 20, 2023** 

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## Apollo Debt Solutions BDC
**(Exact name of Registrant as specified in its charter)** 

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| | | |
|:---|:---|:---|
| **Delaware** | **814-01424** | **86-195058** |
| ***(State or other jurisdiction***<br> ***of incorporation)*** | ***(Commission***<br> ***File Number)*** | ***(I.R.S. Employer***<br> ***Identification No.)*** |

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| | |
|:---|:---|
| **9 West 57th Street**<br> **New York, New York** | **10019** |
| ***(Address of principal executive offices)*** | ***(Zip Code)*** |

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

**Not Applicable** 

**(Former name or former address, if changed since last report)** 

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

**Securities registered pursuant to Section 12(b) of the Act: None** 

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading<br>Symbol(s)** | **Name of each exchange<br>on which registered** |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**Item 3.02. Unregistered Sale of Equity Securities** 

As of January 3, 2023, Apollo Debt Solutions BDC (the "Fund," "ADS," "we" or "our") sold unregistered Class I common shares of beneficial interest (with the final number of shares being determined on January 20, 2023) to feeder vehicles primarily created to hold the Fund's Class I shares. The offer and sale of these Class I shares was exempt from the registration provisions of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) and/or Regulation S thereunder (the "Private Offering"). The following table details the shares sold:

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| | | |
|:---|:---|:---|
| **Date of Unregistered Sale** | **Amount of Class I**<br>**Common Shares** | **Consideration** |
|  As of January 3, 2023 (number of shares finalized on January 20, 2023) | 475106 | $11023306 |

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**Item 7.01. Regulation FD Disclosures** 

**Apollo Debt Solutions Announces Special Distributions** 

On January 20, 2023, Apollo Debt Solution BDC announced that its Board of Trustees declared special distributions totaling $0.06 per share to be distributed in three consecutive monthly payments of $0.02 per share. Payments will be made on or around March 29, 2023, April 26, 2023 and May 26, 2023 for shareholders of record as of February 28, 2023, March 31, 2023 and April 28, 2023, respectively. The special distributions will be paid in cash or reinvested in shares of the Fund for shareholders participating in the Fund's distribution reinvestment plan. These special distributions are in addition to the regular monthly distribution of $0.16 per share that was declared on January 20, 2023 to shareholders of record as of January 31, 2023 to be paid on or about February 24, 2023.

The special distributions pay out a portion of the Fund's undistributed taxable income generated in 2022, which was supported by the rising rate environment and attractive spreads on the Fund's newly originated loans.

A copy of the Fund's press release announcing the foregoing is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

**January 2023 Distributions** 

On January 20, 2023, the Fund declared distributions for each class of its common shares of beneficial interest (the "**Shares**") in the amount per share set forth below:

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| | | | |
|:---|:---|:---|:---|
|  | **Gross Distribution** | **Shareholder**<br>**Servicing and/or**<br>**Distribution Fee** | **Net Distribution** |
|  Class I Common Shares | $0.1600 | $0.0000 | $0.1600 |
|  Class S Common Shares | $0.1600 | $0.0167 | $0.1433 |
|  Class D Common Shares | $0.1600 | $0.0049 | $0.1551 |

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The distributions for each class of Shares are payable to shareholders of record as of the open of business on January 31, 2023 and will be paid on or about February 24, 2023. These distributions will be paid in cash or reinvested in shares of the Fund's Shares for shareholders participating in the Fund's distribution reinvestment plan.

**Portfolio and Business Commentary** 

*(All figures as of December 31, 2022, unless otherwise noted)* 

The public credit markets ended 2022 on a firmer tone as slowing inflation data buoyed market expectations for less aggressive Federal Reserve interest rate hikes in 2023. Supported by the tightening of credit spreads in the broader loan markets and the over-earning resulting from the strong income generation of our portfolio, ADS' NAV per share as of December 31, 2022 increased 0.3% month-over-month to $23.20. This resulted in 1-month, 3-month, and year- to-date returns through December 31, 2022 of 1.0%, 3.1% and -0.3%, respectively, for the Fund's Class I common shares.<sup>1</sup> 

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A dominant theme throughout 2022 was the lack of capital availability in the leveraged loan and high yield markets with issuance volumes sinking by 70% and 78% year-over-year, respectively.<sup>2</sup> Direct lenders were the primary source of capital for sponsors and issuers, providing in aggregate more than $144 billion of financing during the year.<sup>3</sup> We believe that the factors behind the suppressed primary issuance volumes in 2022, including global growth concerns, lack of bank appetite, and elevated CLO liability costs impacting CLO issuance, will continue to persist into 2023. Further, there is currently approximately $1.3 trillion of private equity dry powder, with approximately 35% concentrated in the top 30 private equity firms.<sup>4</sup> We believe that these factors combined will continue to drive the need for larger financing solutions from direct lenders, which will support the Fund's ability to invest in larger, high-quality borrowers at attractive pricing and terms.

During the fourth quarter of 2022, ADS funded approximately $547 million of private first lien loans at a weighted average spread of 674 basis points, representing an increase of 68 basis points relative to our directly originated loans in the third quarter of 2022.<sup>5</sup> For the quarter ended December 31, 2022, the weighted average yield at amortized cost of our newly originated direct investments was 11.8%, compared to 9.0% in the third quarter. The weighted average yield at amortized cost of our portfolio was 10.1% for the fourth quarter, compared to 8.5% in the third quarter.

As of December 31, 2022, our portfolio was approximately $4.3 billion based on fair market value across 128 issuers and 45 industries. The median EBITDA of our portfolio companies was $251 million, and our portfolio's net loan-to-value was 41%.<sup>6</sup> As of December 31, 2022, 99% of our portfolio was first lien based on market value, 99% was floating rate, and there were no investments on non-accrual status.

We continue to operate with ample capital cushion and liquidity given our view that the period ahead will continue to offer attractive investment opportunities in large cap direct lending. We currently have approximately $1.1 billion of liquidity immediately available, and our net leverage was 0.98x as of December 31, 2022.<sup>7</sup> 

1. For Class S common shares, ADS generated returns of 0.9%, 2.8%, and -1.7% for 1-month, 3-month, and inception-to-date returns through December 31, 2022 (inception date is February 1, 2022), respectively. For Class D common shares, ADS generated returns of 1.0%, 3.0%, and 5.2% for 1-month, 3-month, and inception-to-date returns through December 31, 2022 (inception date is July 1, 2022), respectively.

2. J.P. Morgan – North America Credit Research, December 2022.

3. KBRA Direct lending Deals – Q4 2022.

4. S&P Global Market Intelligence, December 2022. Represents global private equity and growth equity dry
powder.

5. Represents weighted average spread on funded amount only.

6. Based on latest information tracked on our portfolio companies and excludes certain portfolio companies for
which these metrics are not meaningful. Net debt through the respective loan tranche in which the Fund has invested divided by the estimated enterprise value of the portfolio company.

7. Includes borrowing base availability under secured financing facilities, cash and net receivables from
investments.

**Item 8.01. Other Events.** 

**Net Asset Value and Portfolio Update** 

The net asset value ("**NAV**") per share of each class of the Fund as of December 31, 2022, as determined in accordance with the Fund's valuation policy, is set forth below.

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| | |
|:---|:---|
|  | **NAV as of December 31, 2022** |
|  Class I Common Shares | $23.20 |
|  Class S Common Shares | $23.20 |
|  Class D Common Shares | $23.20 |

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As of December 31, 2022, the Fund's aggregate NAV was $2.2 billion, the fair value of its investment portfolio was approximately $4.3 billion and it had approximately $2.2 billion of principal debt outstanding, resulting in a debt-to- equity leverage ratio of approximately 1.01x. The Fund's net leverage ratio as of December 31, 2022 was approximately 0.98x.<sup>(1)</sup>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Fund's net leverage ratio is defined as debt outstanding plus payable for investments purchased, less
receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.

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**Status of Offering** 

The Fund is currently publicly offering on a continuous basis up to $5.0 billion in Shares (the "**Offering**"). Additionally, the Fund has sold unregistered shares as part of the Private Offering. The following table lists the Shares issued and total consideration for both the Offering and the Private Offering as of the date of this filing. The Fund intends to continue selling Shares in the Offering and the Private Offering on a monthly basis.

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| | | |
|:---|:---|:---|
|  | **Common Shares<br>Issued** | **Total Consideration** |
| **Offering:** | **Offering:** | **Offering:** |
|  Class I Common Shares | 12018501 | $281609073 |
|  Class S Common Shares | 11390224 | $271951302 |
|  Class D Common Shares | 114579 | $2674991 |
|  **Private Offering:** | **Private Offering:** | **Private Offering:** |
|  Class I Common Shares | 73993348 | $1824429814 |
|  Class S Common Shares |  |  |
|  Class D Common Shares |  |  |
|  **Total Offering and Private Offering \*** | **97516653** | $**2380665180** |

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\* Amounts may not sum due to rounding. 

**Item 9.01. Financial Statements and Exhibits** 

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| | |
|:---|:---|
| <br> (d) | <br> Exhibits |
| 99.1 | [Press Release dated January 20, 2023.](d423485dex991.htm) |

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**SIGNATURE** 

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

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| | | |
|:---|:---|:---|
|  | APOLLO DEBT SOLUTIONS BDC | APOLLO DEBT SOLUTIONS BDC |
| Date: January 20, 2023 | By: | /s/ Kristin Hester |
|  | Name: | Kristin Hester |
|  | Title: | Chief Legal Officer and Secretary |

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## Exhibit 99.1

**Exhibit 99.1** 

**Apollo Debt Solutions Announces Special Distributions** 

New York, NY - On January 20, 2023, Apollo Debt Solution BDC ("ADS," "we," or the "Fund") announced that its Board of Trustees declared special distributions totaling $0.06 per share to be distributed in three consecutive monthly payments of $0.02 per share. Payments will be made on or around March 29, 2023, April 26, 2023 and May 26, 2023 for shareholders of record as of February 28, 2023, March 31, 2023 and April 28, 2023, respectively. The special distributions will be paid in cash or reinvested in shares of the Fund for shareholders participating in the Fund's distribution reinvestment plan. These special distributions are in addition to the regular monthly distribution of $0.16 per share that was declared on January 20, 2023 to shareholders of record as of January 31, 2023 to be paid on February 24, 2023.

The special distributions pay out a portion of the Fund's undistributed taxable income generated in 2022, which was supported by the rising rate environment and attractive spreads on the Fund's newly originated loans.

Apollo Partner Earl Hunt, Chair and CEO of ADS, said, "These special distributions reflect our desire to enhance the distribution rate for our shareholders given the current earnings tailwinds for the Fund while supporting our net asset value per share stability over the long-term. We believe we are well positioned to play offense for the foreseeable future and look forward to continuing to be a solutions provider for both our borrowers and investors."

**About Apollo Debt Solutions** 

Apollo Debt Solutions BDC is a regulated, non-listed BDC that provides individual investors access to investments targeted by the largest institutions. We believe it provides investors with a stronger and more diversified path to value than is typically available — and aims to offer a more beneficial risk-adjusted profile than public equivalents. The Fund focuses on senior secured large corporate direct origination, and, to a lesser extent, broadly syndicated loans and middle market direct lending. Together, we believe these attributes help position the Fund to perform. To learn more, please visit https://gwms.apollo.com/debtsolutionsbdc.

**Forward-Looking Statements** 

Certain information contained in this communication constitutes "forward-looking statements" within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward-looking terminology, such as "outlook," "indicator," "believes," "expects," "potential," "continues," "may," "can," "will," "should," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates", "confident," "conviction," "identified" or the negative versions of these words or other comparable words thereof. These may include financial projections and estimates and their underlying assumptions, statements about plans, objectives and expectations with respect to future operations, statements regarding future performance, statements regarding economic and market trends and statements regarding identified but not yet closed investments. Such forward-looking statements are inherently uncertain and there are or may be important factors that could cause actual outcomes or results to differ materially from those indicated in such statements. ADS believes these factors also include but are not limited to those described under the section entitled "Risk Factors" in its prospectus, and any such updated factors included in its periodic filings with the Securities and Exchange Commission (the "SEC"), which are accessible on the SEC's website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this document (or ADS's prospectus and other filings). Except as otherwise

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required by federal securities laws, ADS undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

**Apollo Contact Information** 

For Investors:

Lucy Lu Munro

Investor Relations

GlobalWealth@Apollo.com

(917) 286-5873

Joanna Rose

Global Head of Corporate Communications

Apollo Global Management, Inc.

(212) 822-0491

Communications@apollo.com