Apollo Investment Corporation

Good afternoon and welcome to Apollo Investment Corporation's earnings conference call for the period ended June 30th, 2021. At this time, all participants have been placed in a listen-only mode. The call will be open for a question and answer session following the speaker's prepared remarks. If you would like to ask a question at that time, simply press star 1 on your telephone keypad. If you would like to withdraw your question, press the pound key. I will now turn the call over to Elizabeth Besson, Investor Relations Manager for Apollo Investment Corporation.

Thank you, Operator, and thank you, everyone, for joining us today. Speaking on today's call are Howard Widra, Chief Executive Officer, Tano Powell, President and Chief Investment Officer, and Greg Hunt, Chief Financial Officer. I'd like to advise everyone that today's call and webcast are being recorded. Please know that they are the property of Apollo Investment Corporation and that any unauthorized broadcast in any form is strictly prohibited. Information about the audio replay of this call is available in our earnings press release. I'd also like to call your attention to the customary safe harbor disclosure in our press release regarding forward-looking information. Today's conference call and webcast may include forward-looking statements. You should refer to our most recent filings with the SEC for risks that apply to our business and that may adversely affect any forward-looking statements we make. We do not undertake to update our forward-looking statements or projections unless required by law. To obtain copies of our SEC filings, please visit our website at www.apolloic.com. I'd also like to remind everyone that we've posted a supplemental financial information package on our website, which contains information about the portfolio as well as the company's financial performance. At this time, I'd like to turn the call over to our Chief Executive Officer, Howard Widra.

Thanks, Elizabeth. Good afternoon, and thank you, everyone, for joining us today. I'll begin today's call by providing an update on our ongoing progress repositioning the portfolio, followed by a review of our results for the quarter. Following my remarks, Tanner will discuss the market environment, review our investment activity for the quarter, and provide an update on credit quality. Greg will then review our financial results in greater detail. We will then open the call to questions. During today's call, we will be referring to some of the slides in our investor presentation, which is posted on our website. Beginning with an update on our portfolio repositioning, we continue to make good progress increasing our exposure to first lien floating rate corporate loans while reducing our exposure to junior capital and non-core positions. From a volume standpoint, the Apollo direct origination platform was very active, closing $4.6 billion in new commitments during the June quarter. AIMV's new investment commitments were strong, totaling $332 million, all in first lien floating rate loans. We believe we have constructed a granular and diversified portfolio of high-quality senior corporate loans. We believe Merckx has successfully navigated this challenging period, and we expect AI&V will be able to generate higher revenue from Merckx in the coming quarters. We also continue to make progress reducing our exposure to non-core and junior capital investments. Repayments during the quarter included the exit of two second lien investments, as well as a small partial pay down from one of our shipping investments. We remained focused on reducing our exposure to the remaining non-core assets while ensuring an optimal outcome for our shareholders. Moving to financial results, we delivered solid results for the quarter. Net investment income for the June quarter was $0.39. We ended the quarter with net asset value per share of $16.02, up 14% or 0.9%. The increase was driven by our corporate lending portfolio, which continues to perform well. The investment portfolio grew modestly as solid fundings were mostly offset by prepayment activities. Gross fundings for the quarter were $230 million, excluding revolver fundings, while net fundings totaled $29 million. Net leverage increased to 1.39 times at the end of June, up from 1.36 times last quarter, and slightly below our target leverage range of 1.4 to 1.6 times. As we look ahead, we are confident in our ability to grow our portfolio and operate within our target leverage range, given the tremendous need for creative and flexible private capital and the unique and robust nature of the Apollo MidCap platform. With that said, as Tanner will discuss later, the current market environment is very competitive, and we will continue to focus on first lien assets and will remain disciplined in our credit selection process. Turning to our distribution, for the quarter, the Board has declared a base distribution of $0.31 per share and a supplemental distribution of $0.05 per share. Both distributions are payable on October 8, 2021, to shareholders of record as of September 21, 2021. With that, I'll turn the call over to Tanner to discuss the market environment and our investment activities.