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Apollo Investment (AINV) Prices Public Offering

NEW YORK (TheStreet) -- Apollo Investment Corporation (AINV) has priced the public offering of 12 million shares of its common stock, with an underwriter option of an additional 1.8 million shares. However, the firm has not yet disclosed the price at which it is listing this secondary offering.

The closed-end fund currently has 224.84 million shares outstanding.

The offering is expected to take place on Feb. 28, subject to customary closing conditions.

The New York-based business expects to use the net proceeds of the offering to repay outstanding indebtedness under its senior secured facility.

Bank of America, Barclays, Citigroup and RBC Capital Markets are acting as joint book-running managers, while Deutsche Bank will act as lead manager.

By midafternoon Tuesday, shares had taken off 6.2% to $8.58. Trading volume of 20 million was more than 10 times its three-month daily average.

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TheStreet Ratings team rates APOLLO INVESTMENT CORP as a Hold with a ratings score of C. The team has this to say about their recommendation:

"We rate APOLLO INVESTMENT CORP (AINV) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 16.9%. Since the same quarter one year prior, revenues rose by 13.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • APOLLO INVESTMENT CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, APOLLO INVESTMENT CORP turned its bottom line around by earning $0.49 versus -$0.45 in the prior year. This year, the market expects an improvement in earnings ($0.90 versus $0.49).
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market on the basis of return on equity, APOLLO INVESTMENT CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Net operating cash flow has significantly decreased to -$122.64 million or 450.50% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

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