Apollo Investment (AINV) Q4 2011 Earnings Call June 01, 2011 11:00 am ET Executives James Zelter - Chief Executive Officer and Director Richard Peteka - Chief Financial Officer, Principal Accounting Officer and Treasurer Patrick Dalton - President of Apollo Investment Corporation and Chief Operating Officer of Apollo Investment Corporation Analysts Jasper Burch - Macquarie Research Vernon Plack - BB&T Capital Markets Richard Shane - JP Morgan Chase & Co Joel Houck David Chiaverini - BMO Capital Markets U.S. James Ballan - Lazard Capital Markets LLC Steven Kwok - Keefe, Bruyette, & Woods, Inc. Presentation Operator
To obtain copies of our latest SEC filings, please visit our website at www.apolloic.com or call us at (212) 515-3450. At this time, I'd like to turn the call back to our Chief Executive Officer, Jim Zelter.James Zelter Thank you, Rich. The credit markets continue to exhibit strength throughout the March 2011 quarter, maintaining strong liquidity and driving debt yields tighter as investors continued their search for extra yield amid continuing low interest rate environment. These dynamics drove solid demand for primary and secondary paper, prompting continued record high yield issuance with $80 billion issued during the first calendar quarter of 2011, only $3 billion off the all-time high record quarterly issuance from the December 2010 quarter. Even renewed fundamental concerns about inconsistent domestic economic data, and certain sovereign issuers appear to pale in comparison to the significant liquidity within the current capital markets in this period. Now let me summarize some brief portfolio highlights for the quarter ended March 31, 2011. In total, we invested $298 million in 8 new and 11 existing portfolio companies. We also received prepayments totaling $173 million and sold select assets totaling $82 million. At March 31, 2011, our portfolio of investments totaled $3.05 billion, measured at fair market value and was represented by 69 distinct portfolio companies, diversified amongst 30 different industries. The weighted average yield on our overall debt portfolio was 11.6% as of March 31, 2011, versus 11.5% at December 31, 2010. During the fiscal year ended March 31, 2011, we invested in 21 new portfolio companies, totaling $1.1 billion and harvested or exited 19 portfolio companies totaling $977 million over the same period. Since the initial public offering of Apollo Investment Corporation in April 2004 and through March 11 -- March 31, 2011, invested capital has now totaled over $7.3 billion and 147 portfolio companies with more than 90 different financial sponsors.
As we noted in our last call, 1 of our strategic priorities was to introduce new investors to Apollo Investment Corporation. Long-term investors interested in providing us with their capital, capital which we seek to use for growth. We believe these investors should recognize our current diversified portfolio of corporate securities and loans and will be motivated to partner with us for further into this uneven economic recovery. In doing so, in January 2011 we were pleased to issue a $200 million senior unsecured 5-year convertible note with what we believe are attractive terms: a 5 3/4 coupon with a conversion premium of 17.5%. We also added in January another $50 million commitment to our senior secured revolving credit facility from our growing syndicate of revolving lenders. We expect the inaugural unsecured issuance to generate significant long-term benefits to AIC and its shareholders. Accordingly, we have deliberately accumulated capital resources as we look ahead and prepare for we may -- what we believe may be a long period of investment opportunity for Apollo Investment Corporation. Pro forma for April 2011 debt maturities, AIC now has approximately $625 million of cash available for new investment.Rich, why don't you take them through some financial highlights for the quarter, please? Richard Peteka Certainly. I'll begin with some March 31, 2011 balance sheet highlights. As Jim noted earlier, our total investment portfolio had a fair market value of $3.05 billion. This is up from $2.92 billion at December 31, 2010. Our March 31 net assets totaled $1.96 billion. With a net asset value per share of $10.03. This compares to net asset total of $1.90 billion at December 31, 2010 and a net asset value per share of $9.73. The increase in NAV per share for the quarter was driven primarily by net unrealized appreciation on our investment portfolio. Positive contributors to performance for the quarter included our investments in AIC Credit Opportunity Fund, Alliance Boots and Sorenson Communications, among others. Partially offsetting the company's unrealized appreciation for the quarter, was unrealized depreciation from PlayPower Holdings, Angelica Corporation and MW Industries, among others. Read the rest of this transcript for free on seekingalpha.com