On August 6, 2026 (the “Closing Date”), Apollo Debt Solutions BDC (the “Company”) completed a $514,900,000 term debt securitization (the “2026 Debt Securitization”). Term debt securitizations are also known as collateralized loan obligations and are a form of secured financing incurred by a subsidiary of the Company, which is consolidated by the Company and subject to the Company’s overall asset coverage requirements.
On the Closing Date and in connection with the 2026 Debt Securitization, ADL CLO 3 LLC (the “CLO Issuer”), an indirect, wholly-owned, consolidated subsidiary of the Company, entered into (i) a purchase agreement (the “CLO Purchase Agreement”) with Citigroup Global Markets Inc., as initial purchaser (the “Initial Purchaser”) and (ii) a placement agreement (the “CLO Placement Agreement”) with Citigroup Global Markets Inc., as a placement agent and Apollo Global Securities, LLC, as a placement agent (collectively, the “Placement Agents”), pursuant to which the Initial Purchaser and the Placement Agents agreed to purchase or place, as applicable, certain of the notes issued by the CLO Issuer as part of the 2026 Debt Securitization pursuant to an indenture by and between the CLO Issuer and Western Alliance Trust Company, N.A., as collateral trustee (the “CLO Indenture”).
The notes issued as part of the 2026 Debt Securitization consist of $248,700,000 of AAA(sf)
Class A-1a
Senior Secured Floating Rate Notes due 2038, which bear interest at the three-month secured overnight financing rate published by the Federal Reserve Bank of New York (“SOFR”) plus 1.50% (the
“Class A-1a
Notes”); $20,600,000 of AAA(sf)
Class A-1b
Senior Secured Floating Rate Notes due 2038, which bear interest at the three-month SOFR plus 1.70% (the
“Class A-1b
Notes”); $30,900,000 of AA(sf)
Class A-2
Senior Secured Floating Rate Notes due 2038, which bear interest at the three-month SOFR plus 1.85% (the
“Class A-2
Notes”); $41,200,000 of A(sf) Class B Secured Deferrable Floating Rate Notes due 2038, which bear interest at the three-month SOFR plus 2.25% (the “Class B Notes”); $30,900,000 of
BBB-(sf)
Class C Secured Deferrable Floating Rate Notes due 2038, which bear interest at the three-month SOFR plus 3.60% (the “Class C Notes” and together with the
Class A-1a
Notes, the
Class A-1b
Notes, the
Class A-2
Notes and the Class B Notes, the “Secured Notes”). Additionally, on the Closing Date, the CLO Issuer issued $92,600,000 of Subordinated Notes due 2126 (the “Subordinated Notes”), which do not bear interest. The Secured Notes together with the Subordinated Notes are collectively referred to herein as the “Notes”.
Additionally, the CLO Issuer incurred certain loans as part of the 2026 Debt Securitization, consisting of $50,000,000 of AAA(sf)
Class A-1a
Loans maturing 2038, which bear interest at the three-month SOFR plus 1.50% (the
“Class A-1a
Loans” and the
Class A-1a
Loans together with the Secured Notes, the “Secured Debt” and the Secured Debt together with the Subordinated Notes, the “Debt”) incurred by the CLO Issuer on the Closing Date. The
Class A-1a
Loans were incurred pursuant to a
Class A-1a
Credit Agreement among the CLO Issuer, as borrower, Western Alliance Trust Company, N.A., as loan agent and collateral trustee and the lenders party thereto (the
“Class A-1a
Credit Agreement”).
The 2026 Debt Securitization is backed by a diversified portfolio consisting primarily of first-lien commercial loans. The Secured Debt is scheduled to mature on July 15, 2038 and the Subordinated Notes are scheduled to mature on July 15, 2126; however, the Debt may be redeemed by the CLO Issuer, at the direction of ADL CLO 3 Depositor LLC (the “CLO Retention Holder”), a wholly-owned, consolidated subsidiary of the Company, as owner of a majority of the Subordinated Notes, on any business day on or after July 15, 2028. The CLO Retention Holder acts as retention holder in connection with the 2026 Debt Securitization for the purposes of satisfying certain U.S. regulations requiring sponsors of securitization transactions to retain exposure to the performance of the securitized assets and as such is required to retain a portion of the Subordinated Notes. The Company, through the CLO Retention Holder, has retained a portion of the
Class A-2
Notes and 100% of the Class B Notes, the Class C Notes and the Subordinated Notes issued in the 2026 Debt Securitization.
The CLO Issuer intends to use the proceeds from the 2026 Debt Securitization to, among other things, purchase certain loans (“Collateral Obligations”) from time to time on and after the Closing Date from the Company pursuant to a master loan sale agreement entered into on the Closing Date (the “CLO Loan Sale Agreement”) among the Company, the CLO Retention Holder and the CLO Issuer. Under the terms of the CLO Loan Sale Agreement that provide for the sale of Collateral Obligations to the CLO Issuer, the Company will transfer to the CLO Retention Holder, and the CLO Retention Holder will transfer to the CLO Issuer, a portion of its ownership interest in the Collateral Obligations securing the 2026 Debt Securitization for the purchase price and other consideration set forth in the CLO Loan Sale Agreement from time to time on and after the Closing Date. Following these transfers, the CLO Issuer, and not the CLO Retention Holder or the Company, will hold all of the ownership interest in such loans and participations. The Company made customary representations, warranties and covenants in the CLO Loan Sale Agreement.