Investor Presentation

Transcription

1 APOLLO INVESTMENT CORPORATION Investor Presentation May 2018 Unless otherwise noted, information as of March 31, 2018 It should not be assumed that investments made in the future will be profitable or will equal the performance of the investments shown in this document.

2 Disclaimers, Definitions, and Important Notes Forward-Looking Statements We make forward-looking statements in this presentation and other filings we make with the Securities and Exchange Commission ( SEC ) within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives, including information about our ability to generate attractive returns while attempting to mitigate risk. Words such as believe, expect, anticipate, estimate, plan, continue, intend, should, may or similar expressions, are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forwardlooking: the return on equity; the yield on investments; the ability to borrow to finance assets; and other risks associated with investing including changes in business conditions and the general economy. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. Some of these factors are described in the company s filings with the SEC. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation may contain statistics and other data that in some cases has been obtained from or compiled from information made available by third-party service providers. Past Performance Past performance is not indicative nor a guarantee of future returns, the realization of which is dependent on many factors, many of which are beyond the control of Apollo Global Management, LLC; Apollo Investment Management, L.P.; and Apollo Investment Corporation (collectively Apollo ). There can be no assurances that future dividends will match or exceed historic ones, or that they will be made at all. Net returns give effect to all fees and expenses. Unless otherwise noted, information included herein is presented as of the date indicated on the cover page and may change at any time without notice. Apollo Investment Corporation (the Corporation ) is subject to certain significant risks relating to our business and investment objective. For more detailed information on risks relating to the Corporation, see the latest Form 10-K and subsequent quarterly reports filed on Form 10-Q. This presentation does not constitute a prospectus and should under no circumstances be understood as an offer to sell or the solicitation of an offer to buy any securities of AINV. Financial Data Financial data used in this presentation for the periods shown is from the Corporation s Form 10-K and Form 10-Q filings with the SEC during such periods. Unless otherwise indicated, the numbers shown herein are rounded and unaudited. Quarterly and annual financial information for the Corporation refers to fiscal periods. AUM Definition Assets Under Management ( AUM ) refers to the investments AGM manages or with respect to which it has control, including capital it has the right to call from its investors pursuant to their capital commitments to various funds. AGM s AUM equals the sum of: (i) the fair value of its private equity investments plus the capital that it is entitled to call from its investors pursuant to the terms of their capital commitments plus non-recallable capital to the extent a fund is within the commitment period in which management fees are calculated based on total commitments to the fund; (ii) the net asset value of AGM s capital markets funds, other than certain senior credit funds, which are structured as collateralized loan obligations or certain collateralized loan obligation and collateralized debt obligation credit funds that have a fee generating basis other than mark-to-market asset values, plus used or available leverage and/or capital commitments; (iii) the gross asset values or net asset values of AGM s real estate entities and the structured portfolio vehicle investments included within the funds AGM manages, which includes the leverage used by such structured portfolio vehicles; (iv) the incremental value associated with the reinsurance investments of the portfolio company assets that AGM manages; and (v) the fair value of any other investments that AGM manages plus unused credit facilities, including capital commitments for investments that may require pre-qualification before investment plus any other capital commitments available for investment that are not otherwise included in the clauses above. AGM s AUM measure includes AUM for which it charges either no or nominal fees. AGM s definition of AUM is not based on any definition of AUM contained in its operating agreement or in any of its Apollo fund management agreements. AGM considers multiple factors for determining what should be included in its definition of AUM. Such factors include but are not limited to (1) its ability to influence the investment decisions for existing and available assets; (2) its ability to generate income from the underlying assets in its funds; and (3) the AUM measures that it uses internally or believes are used by other investment managers. Given the differences in the investment strategies and structures among other alternative investment managers, AGM s calculation of AUM may differ from the calculations employed by other investment managers and, as a result, this measure may not be directly comparable to similar measures presented by other investment managers. 2

3 Agenda Apollo Investment Corporation (AINV) Overview Investment Strategy & Portfolio Repositioning Portfolio Review Conclusion Appendices 3

4 Overview 4

5 Overview of Apollo Investment Corporation ( AINV ) Specialty Finance Company Focused on Lending to US Middle Market Companies Publicly traded (NASDAQ: AINV) business development company ( BDC ) treated as a regulated investment company ( RIC ) for tax purposes Primarily provides debt solutions to U.S. middle market companies with a focus on direct origination Since IPO in April 2004 and through March 31, 2018, invested $18.1 billion in 437 portfolio companies $2.25 billion investment portfolio across 90 companies and 24 different industries, spanning a broad range of asset types 1,2 Externally Managed by Apollo Global Management Externally managed by an affiliate 3 of Apollo Global Management, LLC, a leading alternative asset manager with approximately $247 billion of AUM 2,4 with expertise in private equity, credit and real estate Apollo Global Management, LLC was founded in 1990 AINV operates as part of AGM s Direct Origination Business Apollo Affiliation Increase in Regulatory Leverage Exemptive Relief to Co-Invest 7 Competitive Advantages Apollo affiliation provides significant benefits Experienced management team Broad product offering Large and diverse direct origination team with joint front engine across AINV and MidCap Financial ( MidCap ) 5 Uniquely positioned to benefit from increase in regulatory leverage 6 Expected to improve AINV s competitive positioning Expected to increase deal flow Current Market Information 8 Market capitalization $1.20 billion Dividend yield at market price % Dividend yield at NAV % 1 On a fair value basis. 2 As of March 31, Apollo Investment Management, L.P. 4 See definition of AUM at beginning of presentation. 5 MidCap Financial refers to MidCap FinCo Designated Activity Company, a private limited company domiciled in Ireland, and its subsidiaries, including MidCap Financial Services, LLC. MidCap Financial is managed by Apollo Capital Management, L.P., a subsidiary of Apollo Global Management, LLC, pursuant to an investment management agreement between Apollo Capital Management, L.P. and MidCap FinCo Designated Activity Company. 6 The Company announced that on April 4, 2018, its Board of Directors approved the application of the modified asset coverage requirements set forth in new Section 61(a)(2) of the Investment Company Act of 1940, as amended by The Small Business Credit Availability Act ( SBCAA ). As a result, the asset coverage ratio test applicable to the Company will be decreased from 200% to 150%, effective April 4, On March 29, 2016, the Company received an exemptive order from the SEC permitting greater flexibility to participate in co-investment transactions with certain of its affiliates where terms other than price and quantity are negotiated, subject to the conditions included therein. 8 As of May 21, Most recent quarterly dividend annualized divided by share price. There can be no assurances that AINV s dividend will remain at the current level. 10 Most recent quarterly dividend annualized divided by net asset value per share. There can be no assurances that AINV s dividend will remain at the current level. 5

6 AINV Benefits from a Strong External Manager Firm Profile 1 Business Segments Founded: 1990 AUM: $247 billion Employees: 1,030 Inv. Professionals: 372 Global Offices: 15 Credit $165bn AUM Drawdown Liquid / Performing Permanent Capital Vehicles: -Athene -MidCap -BDCs -Closed-End Funds Advisory Private Equity $69bn AUM Opportunistic buyouts Distressed buyouts and debt investments Corporate carve-outs Real Assets $13bn AUM Commercial real estate Global private equity and debt investments Performing fixed income (CMBS, CRE Loans) Investment Approach Global Footprint Value-Oriented Contrarian Integrated Investment Platform Opportunistic Across Market Cycles and Capital Structures Los Angeles Toronto Chicago Chicago Houston Toronto New York Bethesda Bethesda London Madrid Frankfurt Luxembourg Mumbai Delhi Singapore Shanghai Hong Kong Focus on 9 Core Industries 1 As of March 31, See definition of AUM at beginning of presentation Note: AUM components may not sum due to rounding. 6

7 Apollo Has a Range of Solutions Across the Credit Spectrum Apollo manages more than 100 discrete funds or accounts across a broad set of investment strategies Target Return Illustrative Composition of Apollo s Credit Business $165 billion of AUM 15%+ Drawdown Funds ($28bn) Hedge Funds ($7bn) 10-15% Managed Accounts 5-10% MidCap ($8bn) Total Return ($4bn) EM Debt CLOs ($12bn) <5% Athene & Athora ($87bn) ($85bn) Yield-Oriented Strategies Opportunistic Strategies $137 billion of AUM including $100 billion in Credit Permanent Capital Vehicles $28 billion of AUM Note: As of March 31, Diagram is illustrative in nature with bubbles banded by approximate return targets and size of bubbles representing magnitude of AUM. Identified pockets of AUM may not sum due to double counting. 7

8 Apollo s Dedicated Direct Origination Vehicles Apollo Investment Corporation MidCap CION Investment Corporation 2 Business development company (BDC) under the Investment Company Act of 1940 and regulated investment company (RIC) for tax purposes Focused on providing senior debt solutions to US middle market companies Publicly-listed on NASDAQ Global Select Market $2.25 billion investment portfolio across 90 companies 1 Full-service finance company focused on directly sourced middle market senior debt Business lines in asset-back loans, leveraged loans, real estate and venture lending Privately-held including by investors affiliated with Apollo Global $8.0 billion in funded assets across 495 distinct positions 1 BDC under the Investment Company Act of 1940 that has elected to be treated as a RIC for tax purposes Focused on providing senior debt solutions to US middle market companies Non-traded $1.6 billion assets across 148 companies 1 Established 2012 Established 2004 Established 2008 Additional capacity in select opportunistic credit accounts 1 As of March 31, Apollo Investment Management, L.P. (AIM), the investment adviser to Apollo Investment Corporation, is a non-controlling member of CION Investment Management, LLC (CIM), the investment adviser to CION Investment Corporation (CION). AIM performs sourcing services for CIM, which include, among other services, (i) identifying and providing information about potential investment opportunities for approval by CIM s investment committee; (ii) providing (a) trade and settlement support; (b) portfolio and cash reconciliation; (c) market pipeline information regarding syndicated deals, in each case, as reasonably requested by CIM; and (d) monthly valuation reports and support for all broker-quoted investments. AIM has a limited role as a member of CIM and does not provide advice, evaluation, or recommendation with respect to the CION s investments. All of CION s investment decisions are the sole responsibility of, and are made at the sole discretion of, CIM. 8

9 Apollo s Direct and Specialty Origination Platform Encompasses an array of origination verticals and a comprehensive suite of products Origination Channels Business Segments Product Capabilities Direct Origination Financial Sponsors - Unified calling effort across Apollo - Ability to offer full suite of products increase relevancy Niche markets - Specialized industry expertise in areas with high barriers to entry - AINV has access to all MidCap specialized teams Wall Street - Leverage Apollo s deep relationship with Wall Street intermediaries - Apollo buying power provides good access - Potential source of liquidity that may be used to fund core investments Leveraged Lending Asset Based Lending Life Sciences Lending Lender Finance Aircraft Leasing Revolving Loans Senior First Lien Term Loans Senior Stretch Loans Second Lien Term Loans Delayed Draw Term Loans Unitranche Loans Asset Based Debt DIP Financing 9

10 Competitive Advantages Extensive origination team on par with any peer in the market Access to MidCap s extensive sourcing Access to the broader Apollo Global integrated platform Significant expertise in niche verticals with flexible product set Full-service product suite term loans, revolver and agent capabilities Uniquely positioned to benefit from increase in regulatory leverage 1 2 Significant scale with permanent capital AUM Well-positioned to take on large commitments to win business Speed and certainty of execution 1 The Company announced that on April 4, 2018, its Board of Directors approved the application of the modified asset coverage requirements set forth in new Section 61(a)(2) of the Investment Company Act of 1940, as amended by The Small Business Credit Availability Act ( SBCAA ). As a result, the asset coverage ratio test applicable to the Company will be decreased from 200% to 150%, effective April 4, Reflects the views of Apollo. 10

11 Investment Strategy & Portfolio Repositioning 11

12 Investment Strategy Designed to provide consistent and stable returns for shareholders Continue to de-risk investment portfolio - Increase exposure to core strategies 1 First lien floating rate corporate loans sourced by the Apollo Direct Origination platform First lien loans in life sciences, asset based lending, and lender finance sourced by MidCap s specialized teams Emphasis on investments made pursuant to co-investment order 3 which enhances Apollo s ability to win deals based on size / certainty of execution - Reduce borrower concentration Continue to transition away from non-core strategies 3 Execute plan to prudently increase leverage 4 - Revised target leverage range 1.25x 1.40x - Incremental investment capacity will be used to invest in lower risk assets First lien leverage loans Leverage of 4.0x 5.0x LIBOR basis points - Accelerates de-risking of portfolio by improving quality of assets - Provides a unique opportunity for AINV given robust volume of senior floating rate assets currently originated by the Apollo platform 1 Core strategies include corporate lending, aviation, life sciences, asset based and lender finance On March 29, 2016, the Company received an exemptive order from the SEC permitting greater flexibility to participate in coinvestment transactions with certain of its affiliates where terms other than price and quantity are negotiated, subject to the conditions included therein. 3 Non-core strategies include oil & gas, structured credit, renewables, shipping and commodities 4 The Company announced that on April 4, 2018, its Board of Directors approved the application of the modified asset coverage requirements set forth in new Section 61(a)(2) of the Investment Company Act of 1940, as amended by The Small Business Credit Availability Act ( SBCAA ). As a result, the asset coverage ratio test applicable to the Company will be decreased from 200% to 150%, effective April 4,

13 Fee Structure Closely aligns the incentives of the manager with the interests of shareholders The base management fee has been permanently reduced 1 from an annual rate of 2.0% of the Company s gross assets to - 1.5% of gross assets up to 1.0x debt-to-equity - 1.0% of gross assets in excess of 1.0x debt-to-equity 2 The incentive fee on income has been revised to include a total return requirement - Rolling twelve quarter look-back beginning from April 1, The combination of AINV s new fee structure and active stock repurchase program demonstrate our commitment to creating value for our shareholders 1 Effective April 1, The Company announced that on April 4, 2018, its Board of Directors approved the application of the modified asset coverage requirements set forth in new Section 61(a)(2) of the Investment Company Act of 1940, as amended by The Small Business Credit Availability Act ( SBCAA ). As a result, the asset coverage ratio test applicable to the Company will be decreased from 200% to 150%, effective April 4, The calculation of the incentive fee with the total return requirement will begin on January 1, The incentive fee rate and performance threshold remain 20% and 7% respectively. There is no change to the catch-up provision. For the period between April 1, 2018 through December 31, 2018, the incentive fee rate will be waived to15%, subject to the 7% annualized performance threshold. 13

14 Significant Progress Repositioning Portfolio Deployed significant capital into core strategies 1 and meaningfully reduced exposure to non-core strategies 2 Portfolio Exposure to Core vs. Non-Core and Legacy Strategies 3 As of June 30, 2016 As of March 31, % 41% 59% 77% Core Strategies Non-Core and Legacy Strategies Over the past 7 quarters, invested $1.2 billion in core strategies 4 1 Core strategies include corporate lending, aviation, life sciences, asset based and lender finance. 2 Non-core strategies include oil & gas, structured credit, renewables, shipping and commodities 3. On a fair value basis. 4. From July 1, 2016 through March 31,

15 Significant Progress Reducing Non-Core Assets $907 or 35% of portfolio $238 (9%) $133 (5%) $232 (9%) $304 (12%) Chart Title Non-Core Assets ($ in millions) -52% $435 or 19% of portfolio $25 (1%) $156 (7%) $70 (3%) $185 (8%) 6/30/2016 3/31/2018 Oil & Gas Renewables Shipping Structured Credit Over the past 7 quarters, reduced exposure to non-core strategies by $472 million 4 1 Non-core strategies include oil & gas, structured credit, renewables, shipping and commodities. On a fair value basis. 15

16 Emphasis on First Lien Debt Portfolio Exposure to First Lien Debt 1 As of June 30, 2016 As of March 31, % 50% 50% 60% First Lien Secured Debt Second Lien Secured Debt, Unsecured Debt, Structured Products and Other, Preferred Equity, Common Equity / Interests and Warrants Over the past 7 quarters, 51% of total deployment was in first lien debt 2 1. On a fair value basis. 2. From July 1, 2016 through March 31,

17 Emphasis on Floating Rate Debt Over the past 7 quarters, 51% of total deployment was in first lien debt Portfolio Exposure to Floating Rate Debt 1 2 As of June 30, 2016 As of March 31, % 8% 77% 92% Floating Rate Debt Fixed Rate Debt Over the past 7 quarters, 100% of total deployment was in floating rate debt 2 1. On a fair value basis. 2 The interest type information is calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on nonaccrual status. 3. From July 1, 2016 through March 31,

18 Investments Made Pursuant to Co-Investment Order 1 We believe our ability to co-invest with other Apollo managed capital makes us one of the largest market participants that is well positioned to make large commitments Co-Investment Deployment Over Past 7 Quarters 2 41% of total deployment has been in investments made pursuant to coinvestment order Co-Investments Outstanding 3 22% of the portfolio is in investments made pursuant to co-investment order 25% 22% 59% 1% 5% 10% 78% Leveraged Loans Asset Based Non Co-investment Life Sciences Lender Finance Order Co-Investments Non-Order Co-Investments 1. On March 29, 2016, the Company received an exemptive order from the SEC permitting greater flexibility to participate in co-investment transactions with certain of its affiliates where terms other than price and quantity are negotiated, subject to the conditions included therein. 2. From July 1, 2016 through March 31, As of March 31, On a fair value basis. 18

19 Revised Target Portfolio Based on Increased Leverage 1 Chart Title Evolution of Portfolio 120% 31% first lien* (ex Merx) 55% first lien* (ex Merx) 80% first lien* (ex Merx) 100% 80% 60% 23% 4% 6% 6% * 15% 10% 10% 20% * * 10% 15% 10% * * 40% 20% 0% 39% 30% * 21% 25% * Currrent Portfolio 2 Original Target Portfolio Revised Target Portfolio (based on increased leverage) 55% * First Lien Leveraged Loans Second Lien Leveraged Loans Unsecured Debt Asset Based Life Sciences Merx We intend to use incremental investment capacity to substantially increase our exposure to first lien assets 1 The Company announced that on April 4, 2018, its Board of Directors approved the application of the modified asset coverage requirements set forth in new Section 61(a)(2) of the Investment Company Act of 1940, as amended by The Small Business Credit Availability Act ( SBCAA ). As a result, the asset coverage ratio test applicable to the Company will be decreased from 200% to 150%, effective April 4, On a fair value basis. As of March 31, Excludes non-core and legacy assets which represent 23% of the portfolio. 19

20 Portfolio Review 20

21 Portfolio Snapshot Portfolio Key Statistics 1 Portfolio by Security Type 1,2 Investment Portfolio 2 $2.25 bn # of Portfolio Companies 90 Weighted Average Yield % % Floating Rate 2,4 92% % Sponsored 2,,5 81% Average Company Exposure 2 $25.0 mn 1% 9% 5% 3% 31% 50% Median Company Exposure 2 $16.0 mn Median EBITDA 6 Net Leverage Through AINV Position 6 $81 mn 5.51 x First Lien Debt Unsecured Debt Second Lien Debt Structured Products and Other Interest Coverage x Preferred Equity Common Equity and Warrants Portfolio by Industry 1,2 Portfolio by Strategy1,2, 10 Business Services Aviation and Consumer Transport 4% 8% Healthcare & Pharmaceuticals Energy Oil & Gas Transportation Cargo, Distribution High Tech Industries Energy Electricity Aerospace & Defense 2.8% 3.0% 3.0% 3.8% 6.8% 16.8% 18.4% 17.9% 19% 18% 51% Telecommunications Chemicals, Plastics & Rubber 8.0% 8.2% 11.3% Corporate Lending Aircraft Leasing Non-Core Life Sciences, Asset Based and Lender Finance Legacy Other 3 1 As of March 31, On a fair basis. 3 On total debt portfolio. At amortized cost, exclusive of investment on non-accrual status. 4 The interest type information is calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status. 5 The sponsored/non-sponsored percentages are calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping and commodities. 6 Current. 11 Existing specialty verticals includes oil & gas, renewables, shipping and structured credit. 10 Non-core strategies include oil & gas, structured 1 credit, renewables, shipping and commodities 21

22 Merx Aviation is Well-Diversified Represents 17.9% of AINV s investment portfolio 1, 2 Merx Portfolio 1 Aircraft by Type 1,3 Aircraft by Region 1,3 88 aircraft 11 aircraft types 46 lessees in 26 countries Weighted average age of aircraft ~9.2 years Weighted average lease maturity ~4.6 years 3% 3% 3% 3% 5% 6% 2%2% 1% 29% 43% B A B F A A A E-195 B E-190 B ER E % 20.7% 3.5% 3.8% 2.9% 25.2% 31.9% Asia Europe North America LATAM Africa Australia Middle East Staggered Lease Maturity 1 Aircraft Value by Lessee 1,2 Revenue by Lessee 1, Lessees Each < 2% 2% 2% 31% 8% 6% 2% 3% 3% 2% 3% 2% 2% 3% 3% 3% 6% 4% 4% 3% 3% 4% 0.25% 0.66% 0.64%0.56% 0.88% 0.88% 1.02% 0.90% 0.0% 1.11% 0.93% 8.60% 1.02% 1.26% 1.07% 0.82% 5.87% 1.31% 1.00% 1.36% 1.37% 1.43% 5.30% 1.55% 1.58% 1.61% 4.33% 1.70% 1.72% 4.04% 1.80% 1.82% 4.00% 1.86% 1.87% 1.98% 3.88% 2.00% 2.03% 2.12% 2.34% 2.47% 3.58% 3.50% 3.14% 3.33% 3.48% # of leases maturing by year 46 Lessees 46 Lessees 1 As of March 31, On a fair value basis. 3 Based on base value. 4 Revenue for next four quarters. For more information about Merx, please visit 22

23 Portfolio Concentration Top Ten Portfolio Companies 1 ($ in millions) Rank Portfolio Company Fair Value % of Portfolio 1 Merx Aviation Finance, LLC $ % 2 Spotted Hawk % 3 Dynamic Product Tankers (Prime), LLC % 4 U.S. Security Associates Holdings, Inc % 5 MSEA Tankers LLC % Glacier Oil & Gas Corp. (f/k/a Miller Energy 6 66 Resources, Inc.) 2.9% 7 Skyline Data, News and Analytics LLC (Dodge) % 8 Genesis Healthcare, Inc % Carbonfree Chemicals SPE I LLC (f/k/a Maxus 9 47 Capital Carbon SPE I LLC) 2.1% 10 UniTek Global Services Inc. $45 2.0% Top Ten Total $1, % Other $1, % Total Portfolio $2, % Top Ten Industries 1 ($ in millions) Rank Industry Fair Value % of Portfolio 1 Business Services $ % 2 Aviation and Consumer Transport % 3 Healthcare & Pharmaceuticals % 4 Energy Oil & Gas % 5 Transportation Cargo, Distribution % 6 High Tech Industries % 7 Energy Electricity % 8 Aerospace & Defense % 9 Telecommunications % 10 Chemicals, Plastics & Rubber $64 2.8% Top Ten Total $1, % Other $ % Total Portfolio $2, % Average Position Size, at fair value ($ in millions) $26.9 $28.8 $27.1 $27.4 $ Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 1 Top ten portfolio companies and top ten industries based on market value as of March $ in thousands. 23

24 Portfolio Company Credit Quality Median LTM EBITDA Net Leverage through AINV Position (weighted average by cost) Total Cash Interest Coverage (weighted average by cost) $ x 4.00x $90 $ x 3.50x 3.00x $70 $ x 2.50x $ x 2.00x $40 $ x 1.50x 1.00x $20 $ x 0.50x $0 Mar-17 Jun-17 Sep-17 Dec-17 Mar x Mar-17 Jun-17 Sep-17 Dec-17 Mar x Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 At Close Current At Close Current At Close Current Source: Company data. Includes all portfolio company investments except structured products, common equities, warrants and investments on non-accrual status. Also excludes select investments where debt-to-ebitda is not a relevant or appropriate metric, or data is not available. 24

25 Conclusion 25

26 Reasons to Own AINV 1 Apollo affiliation provides significant benefits 2 Origination platform is highly differentiated versus other market participants 3 Uniquely positioned to benefit from increase in regulatory leverage Receipt of exemptive relief to co-invest enhances competitive positioning 5 Strategy designed to deliver consistent shareholder returns and a stable NAV 6 Well-positioned to benefit from rising interest rates 7 Strong balance sheet and diverse funding sources 8 Revised fee structure 3 9 Active share repurchase program For detailed information on risks relating to AINV, see the latest 10-K and subsequent quarterly reports on Form 10-Q, filed with the SEC. 1 The Company announced that on April 4, 2018, its Board of Directors approved the application of the modified asset coverage requirements set forth in new Section 61(a)(2) of the Investment Company Act of 1940, as amended by The Small Business Credit Availability Act ( SBCAA ). As a result, the asset coverage ratio test applicable to the Company will be decreased from 200% to 150%, effective April 4, Reflects the views of Apollo. 3 See page

27 Appendices 27

28 Specialty Niches Asset Based Life Sciences Lender Finance Secured loans to manufacturing, distribution, retail and services companies Core product consists of revolvers advancing against accounts receivable and inventory; will selectively include term loans against fixed assets or as supported by cash flow High-touch asset class requiring liquidity for daily revolver fundings, collateral evaluation and diligence expertise, borrowing base monitoring capabilities and complex cash dominion structures Leverages MidCap s in-place portfolio and collateral monitoring infrastructure Low loan-to-value loans, covered by material asset values and cash on hand, made to borrowers in product development (e.g., biotech companies) or early commercialization Enterprise value loans Niche market with what we believe to be disproportionate risk reward almost no historical losses across market Typically have multiple sources of exit including strong equity support, well funded balance sheets, and liquidation value No underwriting of science only of cash support and development timeline Senior secured facilities made to lenders in various industries (consumer and commercial) secured by their underlying collateral Typically benefit from multiple levels of credit support and protection in addition to support of underlying borrowers Defined eligibility criteria or loan-by-loan approval, borrowing base structure with ability to remove specific assets, and corporate and/or personal recourse with various restrictive covenants Highly structured transactions skewing towards larger commitments ($25+ million) to provide diversification of underlying collateral Significant opportunities exist to fill the capital void left by large banks exiting and descaling in this asset class 28

29 AINV Investment Process Deal Sourcing Underwriting & Due Diligence Structuring, Pricing & Approval Portfolio Monitoring Multi-Channel Sourcing Engine Focus on Risk- Adjusted Returns Protect Downside Risk Comprehensive and Regular Review and Dialogue Experienced investment team Ability to execute direct/nonsponsor transactions with a focus on specialty verticals Financial sponsors - Long-term relationships - Transactions with > 100 sponsors - 81% of corporate portfolio is sponsor-backed 1,2,3 Limited origination restrictions Apollo affiliation - Coverage and experience - Market insights - Proprietary research - Apollo s credit segment AUM ~$165 billion 2,4 Risk-adjusted investment philosophy - Preservation of capital - Strong asset coverage Extensive due diligence Knowledge sharing across Apollo platform - Access to management teams of private equity portfolio companies Draft term sheet Investment Committee review - Iterative process Negotiate transaction - Structuring and terms - Typical forms include: strong covenants, collateral package, prepayment protection, Board seat or observation rights Seek Investment Committee approval - Weekly meetings to discuss and vote on new deals - Comprised of senior personnel from across Apollo Extensive quarterly portfolio reviews Internal risk rating system Covenant compliance Board observation rights Independent third party valuation for non-quoted investments Offer to provide managerial assistance Increased monitoring of problem investments - Dedicated professionals for managing problem investments Watch list committee - Weekly review of watch list Investment process is subject to change. 1 On a fair value basis. 2 As of March 31, The sponsored/non-sponsored percentages are calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping and commodities. 4 See definition of AUM at beginning of presentation. 29

30 Financial Supplement 30

31 APOLLO INVESTMENT CORPORATION Fourth Quarter Fiscal Year 2018 Earnings Three Months Ended March 31, 2018 May 18, 2018

32 Disclaimers, Definitions, and Important Notes Forward-Looking Statements We make forward-looking statements in this presentation and other filings we make with the Securities and Exchange Commission ( SEC ) within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives, including information about our ability to generate attractive returns while attempting to mitigate risk. Words such as believe, expect, anticipate, estimate, plan, continue, intend, should, may or similar expressions, are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: the return on equity; the yield on investments; the ability to borrow to finance assets; and other risks associated with investing including changes in business conditions and the general economy. The forward-looking statements are based on our beliefs, assumptions and expectations of our future performance, taking into account all information currently available to us. Forwardlooking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. Some of these factors are described in the company s filings with the SEC. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation may contain statistics and other data that in some cases has been obtained from or compiled from information made available by third-party service providers. Past Performance Past performance is not indicative nor a guarantee of future returns, the realization of which is dependent on many factors, many of which are beyond the control of Apollo Global Management, LLC; Apollo Investment Management, L.P.; and Apollo Investment Corporation (collectively Apollo ). There can be no assurances that future dividends will match or exceed historic ones, or that they will be made at all. Net returns give effect to all fees and expenses. Unless otherwise noted, information included herein is presented as of the date indicated on the cover page and may change at any time without notice. Apollo Investment Corporation (the Corporation ) is subject to certain significant risks relating to our business and investment objective. For more detailed information on risks relating to the Corporation, see the latest Form 10-K and subsequent quarterly reports filed on Form 10-Q. Financial Data Financial data used in this presentation for the periods shown is from the Corporation s Form 10-K and Form 10-Q filings with the SEC during such periods. Unless otherwise indicated, the numbers shown herein are rounded and unaudited. Quarterly and annual financial information for the Corporation refers to fiscal periods. 32

33 Summary of Quarterly Results Fourth quarter of fiscal year 2018 (Three months ended March 31, 2018) and other recent highlights Executive Officer Appointments Apollo Investment Corporation (the Company ) announced today that it has made two executive officer appointments. Mr. Howard Widra, who has served as President of the Company since June 2016 has been appointed Chief Executive Officer, succeeding Mr. James Zelter, who has served as Chief Executive Officer since Mr. Zelter will continue to serve as a Director and Mr. Widra has been named as a Director. Mr. Tanner Powell has been appointed President of Company filling the vacancy created by Mr. Widra s appointment. Mr. Powell will also continue to serve as Chief Investment Officer for the Company s Investment Adviser. These appointments reflect Messrs. Widra and Powell s ongoing contributions to the successful execution of the Company s portfolio repositioning plan over the past two years. Fee Structure Changes Effective April 1, 2018, the base management fee has been permanently reduced from an annual rate of 2.0% of the Company s gross assets to 1.5% of gross assets up to 1.0x debt-toequity and to 1.0% of gross assets in excess of 1.0x debt-to-equity. The tiered management fee structure has been established as a result of the reduction in the Company's applicable asset coverage test. 1 For purposes of calculating the base management fee, the definition of gross assets has been revised to exclude cash and cash equivalents. The incentive fee on income has been revised to include a total return requirement with a rolling twelve quarter look-back beginning from April 1, The calculation of the incentive fee with the total return requirement will begin on January 1, The incentive fee rate and performance threshold remain 20% and 7% respectively. There is no change to the catch-up provision. For the period between April 1, 2018 through December 31, 2018, the incentive fee rate will be waived to15%, subject to the 7% annualized performance threshold. Fiscal Fourth Quarter Results Net investment income for the quarter ended March 31, 2018 was $31.9 million, or $0.15 per share, compared to $34.0 million, or $0.16 per share for the quarter ended December 31, 2017 Net realized and change in unrealized losses for the quarter ended March 31, 2018 were ($11.3) million, or ($0.05) per share, compared to ($28.1) million, or ($0.13) per share for the quarter ended December 31, 2017 Net asset value per share as of March 31, 2018 was $6.56 compared to $6.60 as of December 31, 2017, a 0.6% decline Net leverage 2 as of the end of the quarter was 0.57 x compared to 0.62x as of December 31, 2017 Invested $243 million across 8 new and 19 existing portfolio companies of which 47% was in investments made pursuant made pursuant to co-investment order 3 Investments sold totaled $119 million and investments repaid totaled $238 million Net investment activity before repaid investments was $124 million, and net investment activity after repayments was ($114) million for the quarter Repurchased 1,943,858 shares of common stock at a weighted average price per share of $5.73, inclusive of commissions, for an aggregate cost of $11.1 million during the quarter which increased NAV per share by $0.01 Continued to successfully execute the portfolio repositioning strategy, including increasing exposure to core 4 assets to 77% of the portfolio and significantly reducing non-core assets On May 17, 2018, the Board of Directors declared a distribution of $0.15 per share payable on July 6, 2018 to shareholders of record as of June 21, The Company announced that on April 4, 2018, its Board of Directors approved the application of the modified asset coverage requirements set forth in new Section 61(a)(2) of the Investment Company Act of 1940, as amended by The Small Business Credit Availability Act ( SBCAA ). As a result, the asset coverage ratio test applicable to the Company will be decreased from 200% to 150%, effective April 4, The Company s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets. 3 On March 29, 2016, the Company received an exemptive order from the SEC permitting greater flexibility to participate in co-investment transactions with certain of its affiliates where terms other than price and quantity are negotiated, subject to the conditions included therein. 4 Core strategies include corporate lending, aviation, life sciences, asset based and lender finance. 33

34 Financial Highlights ($ in thousands, except per share data) 4Q'18 3Q'18 2Q'18 1Q'18 4Q'17 Mar-18 Dec-17 Sep-17 Jun-17 Mar-17 Operating Results 1 Net investment income $31,943 $33,966 $34,157 $33,320 $37,290 Net realized and change in unrealized gains (losses) from investments and foreign currencies (11,316) (22,342) (2,370) (4,539) (29,238) Net realized loss on extinguishment of debt (5,790) Net increase in net assets resulting from operations $20,627 $5,834 $31,787 $28,781 $8,052 Net investment income per share $0.15 $0.16 $0.16 $0.15 $0.17 Net realized and change in unrealized gains (losses) from investments and foreign currencies p/s ($0.05) ($0.10) ($0.01) ($0.02) ($0.13) Net realized loss on extinguishment of debt per share ($0.03) Earnings per share $0.10 $0.03 $0.14 $0.13 $0.04 Distribution recorded per common share $0.15 $0.15 $0.15 $0.15 $0.15 Select Balance Sheet and Other Data Investment portfolio (at fair value) $2,248,047 $2,352,562 $2,360,290 $2,416,579 $2,316,708 Debt outstanding $789,846 $875,165 $864,906 $920,674 $848,449 Net assets $1,418,086 $1,441,050 $1,472,600 $1,477,624 $1,481,797 Net asset value per share $6.56 $6.60 $6.72 $6.73 $6.74 Debt-to-equity ratio 0.56 x 0.61 x 0.59 x 0.62 x 0.57 x Net leverage ratio x 0.62 x 0.59 x 0.62 x 0.55 x Weighted average shares outstanding 216,700, ,550, ,519, ,694, ,694,654 Shares outstanding 216,312, ,255, ,034, ,694, ,694,654 Number of portfolio companies, at period end Weighted Average Yields, at period end Secured debt % 10.5% 10.3% 10.2% 10.2% Unsecured debt % 11.2% 11.2% 11.1% 11.1% Total debt portfolio % 10.5% 10.3% 10.3% 10.3% Total portfolio 4 9.6% 9.6% 9.7% 9.7% 8.7% 1 Numbers may not sum due to rounding. 2 The Company s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets. 3 On a cost basis. Exclusive of investments on non-accrual status. 4 On a cost basis. Inclusive of all income generating investments, non-income generating investments and investments on non-accrual status. 34

35 Summary Investment Activity ($ in thousands) 4Q'18 3Q'18 2Q'18 1Q'18 4Q'17 Mar-18 Dec-17 Sep-17 Jun-17 Mar-17 Portfolio Activity 1 Investments made $243,329 $198,355 $265,439 $342,036 $149,408 Investments sold (119,302) (48,084) (11,703) (9,949) (38,393) Net investment activity before repayments $124,027 $150,271 $253,737 $332,087 $111,015 Investments repaid (238,131) (156,716) (328,096) (241,998) (306,449) Net investment activity ($114,104) ($6,445) ($74,359) $90,089 ($195,434) Number of portfolio companies, at beginning of period Number of new portfolio companies Number of exited portfolio companies (4) (9) (9) (13) (12) Number of portfolio companies, at period end Number of investments in existing portfolio companies Yield on Activity 2 Yield on investments made 9.7% 9.9% 10.0% 10.3% 9.8% Yield on debt sales and repayments 9.6% 10.2% 10.3% 11.3% 9.9% 1 Numbers may not sum due to rounding. 2 Yield on activity is for debt investments and excludes select short-term trades and investments on non-accrual status. 35

36 Quarterly Investment Activity Investment Activity ($ in millions) Total Debt Portfolio Yield 1,2 $149 $342 $265 $198 $ % 10.3% 10.3% 10.5% 10.7% ($38) ($10) ($12) ($48) ($242) ($157) ($306) ($328) ($119) ($238) Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 New Investments Sales Repayments Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Net Investment Activity ($ in millions) Yield on Investment Activity 2,3 11.4% $90 ($74) ($6) ($114) 10.2% 9.9% 9.8% 10.3% 9.4% 10.3% 10.2% 10.2% 10.0% 9.9% 9.3% 10.8% 9.7% 7.6% ($195) Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 New Investments Sales Repayments 1 Weighted average yield on total debt portfolio on a cost basis at period end, exclusive of investments on non-accrual status. 2 Change in terms on investments may impact the weighted average yield of the total debt portfolio but are not reflected in new, sold or repaid investments. 3 Yield on activity is for debt investments and excludes select short-term trades and investments on non-accrual status. 36

37 Detailed Quarterly Investment Activity ($ in thousands) 4Q'18 3Q'18 2Q'18 1Q'18 4Q'17 Mar-18 Dec-17 Sep-17 Jun-17 Mar-17 Purchases 1 First lien 2 $186,265 $108,008 $111,229 $236,735 $52,018 Second lien 49,426 89, , ,819 92,742 Total secured debt 235, , , , ,760 Unsecured debt 0 2,499 Structured products and other Preferred equity Common equity/interests and warrants 7, ,238 1,481 2,043 Total Purchases $243,329 $198,355 $265,439 $342,036 $149,408 Yield at Cost on Debt Purchases 3 First lien 9.5% 9.3% 9.3% 10.3% 9.2% Second lien 10.3% 10.7% 10.4% 10.3% 10.2% Total secured debt 9.7% 9.9% 10.0% 10.3% 9.8% Unsecured debt N/A N/A N/A N/A 8.0% Preferred equity N/A N/A N/A N/A N/A Yield at Cost on Debt Purchases 9.7% 9.9% 10.0% 10.3% 9.8% Sales and Repayments 1 First lien 2 $228,989 $79,659 $128,848 $136,063 $52,662 Second lien 91,255 90, ,034 53,838 96,892 Total secured debt 320, , , , ,554 Unsecured debt 2, , ,836 Structured products and other 27,349 27,292 8,961 33,166 55,102 Preferred equity Common equity/interests and warrants 7,780 6,814 6,956 28,879 47,350 Total Sales and Repayments $357,433 $204,800 $339,799 $251,947 $344,842 Yield at Cost on Debt Sales and Repayments 3 First lien 9.0% 10.0% 10.4% 12.0% 9.3% Second lien 11.2% 10.5% 9.9% 9.7% 10.1% Total secured debt 9.6% 10.2% 10.1% 11.3% 9.8% Unsecured debt 10.2% 13.0% 11.0% N/A 10.0% Preferred equity N/A N/A N/A N/A N/A Yield at Cost on Debt Sales and Repayments 9.6% 10.2% 10.3% 11.3% 9.9% Yield at Cost on Sales 7.6% 10.2% 9.3% 9.4% 10.2% Yield at Cost on Debt Repayments 10.8% 10.2% 10.3% 11.4% 9.9% 1 Numbers may not sum due to rounding. 2 First lien purchases include revolver drawdowns; first lien sales and repayments includes revolver repayments. 3 Yield on activity is for debt investments and excludes select short-term trades and investments on non-accrual status. 37

38 Net Asset Value ($ in thousands, except per share data) 4Q'18 3Q'18 2Q'18 1Q'18 4Q'17 Mar-18 Dec-17 Sep-17 Jun-17 Mar-17 Per Share NAV, beginning of period $6.60 $6.72 $6.73 $6.74 $6.86 Net investment income Net realized and change in unrealized gain (loss) (0.05) (0.10) (0.01) (0.02) (0.13) Net realized loss on extinguishment of debt (0.03) Net increase (decrease) in net assets resulting from operations Repurchase of common stock Distribution recorded (0.15) (0.15) (0.15) (0.15) (0.15) NAV, end of period $6.56 $6.60 $6.72 $6.73 $6.74 Total NAV, beginning of period $1,441,050 $1,472,600 $1,477,624 $1,481,797 $1,506,699 Net investment income 31,943 33,966 34,157 33,320 37,290 Net realized and change in unrealized gains (losses) (11,316) (22,342) (2,370) (4,539) (29,238) Net realized loss on extinguishment of debt (5,790) Net increase (decrease) in net assets resulting from operations 20,627 5,834 31,787 28,781 8,052 Repurchase of common stock (11,145) (4,645) (3,956) 0 0 Distributions recorded (32,447) (32,738) (32,855) (32,954) (32,954) NAV, end of period $1,418,086 $1,441,050 $1,472,600 $1,477,624 $1,481,797 Net Asset Value Per Share $6.74 $6.73 $6.72 $6.60 $6.56 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Numbers may not sum due to rounding. 38

39 Portfolio as of March 31, 2018 By Asset Class 1 Fixed Rate vs. Floating Rate 1,2 3% 5% 10% Secured debt Unsecured debt 8% Structured products and other 82% Preferrred equity, common equity/interests and warrants 92% Fixed Rate Assets Floating Rate Assets By Industry 1,3 Sponsored vs. Non-sponsored 1,4 16.8% 18.4% 2.8% 19% 3.0% 3.0% 3.8% 17.9% 6.8% 8.0% 8.2% 11.3% 81% Business Services Aviation and Consumer Transport Healthcare & Pharmaceuticals Energy Oil & Gas Transportation Cargo, Distribution High Tech Industries Energy Electricity Aerospace & Defense Telecommunications Chemicals, Plastics & Rubber Other Sponsored Non-sponsored 1 On a fair value basis. 2 The interest type information is calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status. 3 Other consists of: Diversified Investment Vehicles, Banking, Finance, Real Estate; Food & Grocery; Automotive; Manufacturing, Capital Equipment; Consumer Goods Durable; Advertising, Printing & Publishing; Utilities Electric; Consumer Goods Non-durable; Consumer Services; Insurance; Containers, Packaging & Glass; Media Diversified & Production; Hotel, Gaming, Leisure, Restaurants and Metals & Mining.. 4 The sponsored/nonsponsored percentages are calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping and commodities. 39

40 Portfolio Composition ($ in thousands) 4Q'18 3Q'18 2Q'18 1Q'18 4Q'17 Mar-18 Dec-17 Sep-17 Jun-17 Mar-17 Portfolio Composition, measured at fair value ($) First lien $1,131,942 $1,169,317 $1,142,148 $1,140,215 $1,049,232 Second lien 706, , , , ,268 Total secured debt $1,837,953 $1,912,616 $1,892,857 $1,875,161 $1,734,500 Unsecured debt 103, , , , ,385 Structured products and other 67,968 97, , , ,893 Preferred equity 31,053 25,690 25,780 25,754 25,637 Common equity/interests and warrants 207, , , , ,293 Total investment portfolio $2,248,047 $2,352,562 $2,360,290 $2,416,579 $2,316,708 Portfolio Composition, measured at fair value (%) First lien 50% 50% 48% 47% 45% Second lien 31% 32% 32% 30% 30% Total secured debt 82% 81% 80% 78% 75% Unsecured debt 5% 5% 5% 7% 7% Structured products and other 3% 4% 5% 6% 7% Preferred equity 1% 1% 1% 1% 1% Common equity/interests and warrants 9% 9% 9% 9% 10% Portfolio Composition by Strategy, measured at fair value (%) Core strategies 1 77% 74% 73% 74% 71% Non-core strategies 2 19% 22% 23% 23% 24% Legacy & Other 4% 4% 4% 4% 5% Interest Rate Type, measured at fair value 3 Fixed rate % 8% 8% 9% 14% 16% Floating rate % 92% 92% 91% 86% 84% Sponsored / Non-sponsored, measured at fair value 4 Sponsored % 81% 82% 81% 83% 86% Non-sponsored % 19% 18% 19% 17% 14% 1 Core strategies include corporate lending, aviation, life sciences, asset based and lender finance. 2 Non-core strategies include oil & gas, structured credit, renewables, shipping and commodities. 3 The interest type information is calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status. 4 The sponsored/non-sponsored percentages are calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping and commodities. 40

41 Credit Quality As of March 31, 2018, 3.3% of total investments at amortized cost, or 2.3% of total investments at fair value, were on non-accrual status. ($ in thousands) 4Q'18 3Q'18 2Q'18 1Q'18 4Q'17 Investments on Non-Accrual Status Mar-18 Dec-17 Sep-17 Jun-17 Mar-17 Non-accrual investments at amortized cost $75,671 $57,928 $46,199 $46,430 $183,141 Non-accrual investments/total portfolio, at amortized cost 3.3% 2.4% 1.9% 1.9% 7.0% Non-accrual investments at fair value $51,426 $35,175 $30,204 $27,458 $68,571 Non-accrual investments/total portfolio, at fair value 2.3% 1.5% 1.3% 1.1% 3.0% Portfolio Company Credit Metrics 1 Net Leverage (Close) 5.5 x 5.4 x 5.5 x 5.4 x 5.5 x Net Leverage (Current) 5.5 x 5.5 x 5.5 x 5.5 x 5.5 x Interest Coverage (Close) 2.5 x 2.7 x 2.7 x 2.7 x 2.5 x Interest Coverage (Current) 2.5 x 2.7 x 2.7 x 2.7 x 2.5 x Industry Cost Fair Value Investments on Non-Accrual Status as of March 31, 2018 Elements Behavioral Health, Inc. Healthcare & Pharmaceuticals $11,911 $0 Magnetation, LLC Metals & Mining 1, Spotted Hawk Energy Oil & Gas 44,380 40,816 Sprint Industrial Holdings, LLC. Containers, Packaging & Glass 18,107 10,159 Total $75,671 $51,426 1 Source: Company data. Includes all portfolio company investments except structured products, common equities, warrants and investments on non-accrual status. Also excludes select investments where debt-to- EBITDA is not a relevant or appropriate metric, or data is not available. Weighted average by cost. 41

42 Diversified Funding Sources as of March 31, 2018 Debt Facilities Debt Issued/ Amended Final Maturity Date Interest Rate Principal Amount Outstanding (in thousands) Senior Secured Facility ($1.19 billion) 12/22/ /22/2021 L bps $285,216 Senior Secured Notes (Series B) 9/29/2011 9/29/ % 16, Notes (redeemable on or after 7/15/18) 6/17/2013 7/15/ % 150, Notes 3/3/2015 3/3/ % 350,000 Weighted Average Annualized Interest Cost 1 & Total Debt Obligations 5.225% 801,216 Deferred Financing Cost and Debt Discount (11,370) Total Debt Obligations,Net of Deferred Financing Cost and Debt Discount $789,846 1 Includes the stated interest expense and commitment fees on the unused portion of the Senior Secured Facility. Excludes amortized debt issuance costs. For the three months ended March 31, Based on average debt obligations outstanding. 42

43 Interest Rate Exposure as of March 31, 2018 Investment Portfolio 1,2 Funding Sources 3 8% 23% 64% 13% Fixed Rate Assets 92% Floating Rate Assets Fixed Rate Debt Floating Rate Debt Common Equity Floating Rate Asset Floor Net Investment Income Interest Rate Sensitivity 4 ($ in millions) Par or Cost Interest Rate Floors % of Floating Rate Portfolio No Floor $213 16% < 1.00% 100 7% 1.00% to 1.24% 1,001 74% 1.25% to 1.49% 30 2% 1.50% to 1.74% 13 1% > =1.75% 0 0% Basis Point Change Annual Net Investment Income (in millions) Annual Net Investment Income Per Share Up 400 basis points $33.6 $ Up 300 basis points $25.2 $ Up 200 basis points $16.8 $ Up 100 basis points $8.4 $ Down 100 basis points ($8.4) ($0.0388) Total $1, % 1 On a fair value basis. 2 The interest type information is calculated using the Company s corporate debt portfolio and excludes aviation, oil and gas, structured credit, renewables, shipping, commodities and investments on non-accrual status. 3 Based on total debt obligations before deferred financing cost and debt discount. 4 The table shows the estimated annual impact on net investment income of base rate changes in interest rates (considering interest rate floors for floating rate instruments) to our loan portfolio and outstanding debt as of March 31, 2018, assuming no changes in our investment and borrowing structure. 43