Apollo Debt Solutions BDC

What the company is

• A Delaware statutory trust formed on December 4, 2020.
• A non-exchange traded, perpetual-life business development company (BDC) regulated under the Investment Company Act of 1940 (1940 Act).
• Externally managed by Apollo Credit Management, LLC (the Adviser), an affiliate of Apollo Global Management, Inc.
• Intended to qualify and be treated as a regulated investment company (RIC) for U.S. federal income tax purposes.

Investment objective and focus

• Primary objective: generate current income; secondary objective: pursue long-term capital appreciation.
• Invests in private credit opportunities in directly originated assets, including loans and other debt securities issued to large private U.S. borrowers (generally companies with EBITDA above $75 million, subject to adjustments for disruptions and synergies).
• Most investments are in private U.S. companies, with the ability to invest in European and other non-U.S. companies.

Portfolio and asset strategy

• Under normal circumstances, at least 80% of total assets (net assets plus borrowings for investment purposes) invested in debt instruments.
• At least 70% of assets must be “Qualifying Assets” under the 1940 Act; up to 30% may be non-qualifying portfolio investments, including non-U.S. exposure.
• Majority of debt instruments are unrated or rated below investment grade; may include CLOs and other structured products.
• Likely to hold a portfolio of senior secured loans, including first lien loans; typical target loan-to-value in the 35–45% range for downside protection.
• May invest in equity interests (common stock, preferred stock, warrants, or options) as part of broader financing solutions.
• May employ leverage up to a 2:1 debt-to-equity ratio, using borrowings, credit facilities, and potentially TRS and CLO structures.
• May originate loans directly via Apollo’s origination platform or acquire loans in secondary markets; may co-invest with other Apollo funds; may form CLOs and retain equity in securitized vehicles.

Sourcing, risk management and valuation

• Sourcing supported by Apollo’s scale and relationships; Apollo maintains a large corporate credit network and proprietary origination flow.
• Emphasis on downside protection through senior secured structures, strong covenants, and bespoke loan documentation.
• Portfolio investments are fair-valued quarterly; the Adviser is the valuation designee under the 1940 Act.
• Independent third-party valuation firms assist with Level 3 valuations when market quotes are not readily available; a multi-step valuation process is used for non-readily marketable assets.
• Monitoring and risk management are integrated across Apollo’s platform, including ongoing portfolio monitoring, covenant enforcement, and potential distress/workout support.

Governance and key service providers

• Adviser: Apollo Credit Management, LLC (affiliate of Apollo).
• Administrator: Apollo-related affiliate providing administrative and compliance services.
• Independent Trustees: Board of six Trustees, five of whom are Independent Trustees; the Board monitors the Adviser and other service providers.
• Co-investment relief: SEC order dated May 14, 2025, permits co-investment with other Apollo funds; Board-approved policies govern co-investment allocations.

Fees and economics

• Base management fee: 1.25% per year of net assets, paid monthly in arrears.
• Incentive fee (two independent components):
  • Income-based component: 12.5% of amounts exceeding a quarterly hurdle (1.25% per quarter, or 5.0% annualized) with a catch-up mechanism up to 1.43% quarterly return (5.72% annualized) before the high-water mark is reached.
  • Capital gains component: 12.5% of cumulative realized capital gains (net of losses and depreciation) from inception through year-end, payable at year-end.
• Administration and expense reimbursement: Administrator and affiliates provide services and are reimbursed for costs, including internal staff under the Administrator. Expense Support Agreements with the Adviser may affect reimbursements.
• Distribution and servicing: Board-approved Distribution and Servicing Plan. Class-specific servicing fees (annualized as a percentage of NAV): Class S 0.85%, Class D 0.25%; Class I has no servicing fee. Fees may be reallowed to brokers; some brokers may be eligible for fee waivers.
• Distribution reinvestment plan: cash dividends may be automatically reinvested in additional shares in most cases.
• Share repurchase program: up to 5% of NAV per quarter, discretionary; repurchases at NAV per share with an Early Repurchase Deduction for shares held less than one year (subject to exceptions).
• The Adviser and its affiliates may waive or recoup certain fees and expenses from time to time under Expense Support and related reimbursement arrangements.

Capital, liquidity and distributions

• Continuous offering: up to $10.0 billion of common shares (Class S, Class D, Class I). Initial purchase price of Class Common Shares was $25.00; thereafter NAV per share applies.
• Regular monthly distributions: declared and paid monthly; the Board may adjust distribution levels based on earnings, cash flow, capital needs and RIC requirements.
• Tax status: intends to qualify as a RIC and to distribute at least 90% of ordinary income and gains required to avoid corporate taxation.
• Sources of cash: net proceeds from offerings, cash flows from operations, financing arrangements, and future offerings of equity or debt securities. Distributions may be funded from sources beyond net investment income, including borrowings and reimbursement waivers, with attendant impacts on NAV and future distributions.
• The Company has no employees; day-to-day investment operations are performed by the Adviser and its affiliates.

Notable scale and context

• Apollo’s affiliate network provides scale: Apollo reported $938 billion of AUM as of 12/31/2025 across its platform, including over $450 billion in dedicated corporate credit AUM and thousands of employees across the group.
• Apollo’s integrated platform provides access to a broad network of sponsors, banks and intermediaries and has historically sourced a large volume of direct lending transactions.

Operational and regulatory notes

• The Company is subject to 1940 Act restrictions, including asset coverage (150% after any senior indebtedness issuance) and diversification requirements, with ongoing oversight by Independent Trustees.
• Adviser compensation and potential conflicts of interest are disclosed, including incentives to use leverage and allocation policies among Apollo-managed funds.
• The Company uses leverage and derivatives within permitted limits and may engage in CLOs and securitizations, which carry structured-financing risks.
• Employees supporting the Company are provided by the Adviser/Administrator; the Company itself maintains no direct employees.

Financial detail highlights

• As of December 31, 2025, an illustrative figure referenced approximately $6.7 billion of average principal debt outstanding and a weighted average interest rate of 6.94% used in return calculations.
• Initial offering price for Class Common Shares was $25.00; ongoing NAV-based pricing applies thereafter.
• The Company operates a continuous offering framework and a quarterly NAV valuation process administered by the Adviser as valuation designee.

Summary

Apollo Debt Solutions BDC is a non-traded BDC that raises capital through a continuous offering and deploys that capital primarily into private credit opportunities originated or acquired through Apollo’s platform. The fund targets senior secured loans to large borrowers, uses permitted leverage and structured financing to expand investment capacity, pursues downside protection through senior structures and covenants, and distributes eligible income to shareholders while maintaining RIC status.