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Apollo Debt Solutions BDC Completes $496M Debt Securitization and Amends Credit Facility

By Mari Nicholson

Apollo Debt Solutions BDC Completes $496M Debt Securitization and Amends Credit Facility

Apollo Debt Solutions BDC – a non-traded perpetual-life business development company sponsored by affiliates of Apollo Global Management – announced the closing of a $496 million term debt securitization, also known as a collateralized loan obligation. This transaction is expected to enhance the company’s financial flexibility and support its investment activities. The BDC also disclosed an amendment to the Barn Owl Funding Credit Agreement, increasing the maximum principal amount that can be drawn to $400 million prior to the pricing date of a future debt securitization, and $450 million thereafter.

2025 Debt Securitization

The recently completed 2025 debt securitization involved ADL CLO 1 LLC – an indirect, wholly-owned subsidiary of Apollo Debt Solutions BDC – issuing a combination of secured notes and subordinated notes. BNP Paribas Securities Corp. served as the initial purchaser, with Apollo Global Securities LLC acting as co-placement agent.

The secured notes, all due 2037 and totaling $236 million, include:

  • Class A-1a senior secured floating rate notes: $126 million which bear interest at the three-month secured overnight financing rate plus 1.67%;
  • Class A-1b senior secured floating rate notes due 2037: $10 million which bear interest at the three-month SOFR plus 1.9%;
  • Class A-2 senior secured floating rate notes due 2037: $30 million which bear interest at the three-month SOFR plus 2.1%;
  • Class B senior secured deferrable floating rate notes:$40 million which bear interest at the three-month SOFR plus 3.15%; and
  • Class C senior secured deferrable floating rate notes: $30 million which bear interest at the three-month SOFR plus 4.5%.

Additionally, the CLO issuer incurred $174 million in loans, all due 2037, comprising:

  • Class A-1a-L1 loans: $114 million which bear interest at the three-month SOFR plus 1.67%;
  • Class A-1a-L2 loans: $50 million which bear interest at the three-month SOFR plus 1.67%; and
  • Class A-1b loans:$10 million which bear interest at the three-month SOFR plus 1.9%.

An additional $86 million in subordinated notes due 2037 were also issued, which do not bear interest.

The proceeds from this securitization are earmarked for purchasing collateral obligations, primarily first-lien commercial loans, from Apollo Debt Solutions BDC. The company will serve as the collateral manager for the CLO issuer, and the collateral management fee will equal 0.0% per annum of the fee basis amount.

This debt securitization is backed by a diversified portfolio of primarily first-lien commercial loans. The secured debt is scheduled to mature in July 2037, while the subordinated notes are set for maturity in July 2125. ADL CLO 1 Depositor LLC, a wholly-owned subsidiary of the Company, will act as the retention holder, maintaining 100% of the Class B and Class C notes, and subordinated notes to satisfy regulatory requirements.

Barn Owl Funding Credit Agreement

Barn Owl Funding LLC, a wholly-owned subsidiary of Apollo Debt Solutions BDC, amended its credit agreement with Bank of America N.A. The amendment increases the maximum principal amount that can be drawn to $400 million prior to the pricing date of the anticipated Barn Owl Funding Debt Securitization, and to $450 million thereafter.

Barn Owl Funding utilizes borrowings from this facility to acquire eligible assets, predominantly first priority corporate loans, to build a portfolio for a future CLO transaction. Apollo Debt Solutions BDC retains a residual interest in these acquired assets through its ownership of subordinated notes issued by Barn Owl Funding.

Last month, the BDC reported special distributions and a series of lending activities:

  • Omega Healthcare: Apollo served as the sole lender on a $725 million first lien term loan to Omega Healthcare, a revenue cycle management service provider. This transaction was part of an upsize and refinancing of Omega’s existing facility, according to the BDC.
  • MRO Holdings: Apollo acted as the sole lead arranger on the refinancing of a $790 million first lien term loan to MRO Holdings, North America’s largest airframe maintenance provider, according to the BDC. Apollo’s role as an incumbent lender included repricing the existing term loan, extending its maturity, and adding a new revolving credit facility.
  • Grant Thornton UK: Apollo participated in a £500 million first lien term loan to Grant Thornton UK, an audit, tax, and advisory firm. The BDC participated in the transaction alongside other Apollo-managed investment funds.

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