Apollo Tactical Income Fund Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number            811-22591                             

                                 Apollo Tactical Income Fund Inc.                                

(Exact name of registrant as specified in charter)

9 West 57th Street

                                             New York, New York 10019                                             

(Address of principal executive offices) (Zip code)

Joseph Moroney, President

9 West 57th Street

                                             New York, New York 10019                                             

(Name and address of agent for service)

Registrant’s telephone number, including area code: (212) 515-3200

Date of fiscal year end: December 31

Date of reporting period: September 30, 2018


Item 1. Schedule of Investments.

The Schedule of Investments is attached herewith.


Apollo Tactical Income Fund Inc.

Schedule of Investments

September 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Senior Loans - 119.7%(a)

   

AEROSPACE & DEFENSE - 3.5%

   

MRO Holdings, Inc.
Initial Term Loan, (LIBOR + 5.25%, 1.00% Floor), 7.64%, 10/25/23(b)

  595,500       600,711    

PAE Holding Corp.
First Lien Initial Term Loan, (LIBOR + 5.50%, 1.00% Floor), 7.89%, 10/20/22(b)

  1,886,938       1,897,552    

Second Lien Initial Term Loan, (LIBOR + 9.50%, 1.00% Floor), 11.89%, 10/20/23(b)

  1,404,834       1,411,858    

Photonis Technologies SAS (France)

     

First Lien Initial Dollar Term Loan, (LIBOR + 7.50%, 1.00% Floor), 9.89%, 09/18/19(b)(c)(d)

  3,152,510       2,935,775    

StandardAero Aviation Holdings, Inc.

     

Initial Term Loan, (LIBOR + 3.75%, 1.00% Floor), 5.99%, 07/07/22(b)

  1,994,859       2,008,104    
            8,854,000    

AUTOMOTIVE - 3.1%

     

AP Exhaust Acquisition, LLC
First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.32%,
05/10/24(b)(d)

  6,158,162       5,588,532    

Innovative XCessories & Services, LLC
Term Loan, (LIBOR + 4.75%, 1.00% Floor), 6.97%, 11/29/22(b)

  2,226,026       2,228,808    
   

 

 

   
      7,817,340    
   

 

 

   

BANKING, FINANCE, INSURANCE & REAL ESTATE - 8.0%

 

 

AIS Holdco, LLC
First Lien Term Loan, (LIBOR + 5.00%, 0.00% Floor), 7.31%, 08/15/25(b)(e)

  2,222,222       2,219,444    

Alera Group Intermediate Holdings, Inc.
Term Loan B, (LIBOR + 4.50%, 0.00% Floor), 6.74%, 08/01/25(b)

  1,242,170       1,260,802    

Aretec Group, Inc.
First Lien Term Loan, (LIBOR + 4.25%, 0.00% Floor), 4.25%, 08/15/25(b)(d)

  1,447,254       1,461,727    

Asurion, LLC
New Term Loan B-7, (LIBOR + 3.00%, 0.00% Floor), 5.24%, 11/03/24(b)

  2,992,500       3,017,053    

Replacement Term Loan B-6, (LIBOR + 3.00%, 0.00% Floor), 5.24%,
11/03/23(b)(d)

  1,595,859       1,609,575    

Second Lien Replacement Term Loan B-2, (LIBOR + 6.50%, 0.00% Floor), 8.74%, 08/04/25(b)

  1,594,072       1,641,400    
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

BANKING, FINANCE, INSURANCE & REAL ESTATE (continued)

 

 

Mayfield Agency Borrower, Inc.
First Lien Term Loan B, (LIBOR + 4.50%, 0.00% Floor), 6.74%, 02/28/25(b)

  1,791,988       1,805,428    

Medical Card System, Inc.
Term Loan, (LIBOR + 4.50%, 1.00% Floor), 5.50%, 09/02/19(b)(e)

  4,651,939       4,163,131    

Mitchell International, Inc.
Second Lien Initial Term Loan, (LIBOR + 7.25%, 0.00% Floor), 9.49%, 12/01/25(b)

  1,000,000       1,002,000    

SG Acquisition, Inc.
Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.39%, 03/29/24(b)

  1,894,982       1,902,088    

SquareTwo Financial Corp.
Closing Date Term Loan, (LIBOR + 10.00%, 1.00% Floor), 11.00%,
05/24/19(b)(e)(f)(g)

  1,003,755       36,326    
   

 

 

   
            20,118,974    
   

 

 

   

BEVERAGE, FOOD & TOBACCO - 2.3%

 

 

8th Avenue Food & Provisions, Inc.
First Lien Term Loan, (LIBOR + 3.75%, 0.00% Floor), 3.75%, 10/01/25(b)(d)

  975,000       985,057    

Winebow Holdings, Inc.
First Lien Term Loan, (LIBOR + 3.75%, 1.00% Floor), 5.99%, 07/01/21(b)(d)

  3,093,207       2,899,881    

Second Lien Term Loan, (LIBOR + 7.50%, 1.00% Floor), 9.74%, 01/02/22(b)

  2,505,795       1,866,817    
   

 

 

   
      5,751,755    
   

 

 

   

CAPITAL EQUIPMENT - 1.5%

 

 

Altra Industrial Motion Corp.
Term Loan, (LIBOR + 2.00%, 0.00% Floor), 2.00%, 09/26/25(b)(d)

  1,462,857       1,468,569    

Safe Fleet Holdings, LLC
First Lien Initial Term Loan, (LIBOR + 3.00%, 1.00% Floor), 5.11%, 02/03/25(b)

  997,494       989,394    

Second Lien Initial Term Loan, (LIBOR +
6.75%, 1.00% Floor), 8.86%, 02/02/26(b)

  1,403,846       1,393,317    
   

 

 

   
      3,851,280    
   

 

 

   

CHEMICALS, PLASTICS, & RUBBER - 6.0%

 

 

Archroma Finance S.A.R.L (Luxembourg)
Facility B-2, (LIBOR + 4.25%, 0.00% Floor), 6.58%, 08/12/24(b)(c)

  2,105,952       2,111,216    

Diamond (BC) B.V.
Initial Term Loan, (LIBOR + 3.00%, 0.00% Floor), 5.24%, 09/06/24(b)

  4,973,600       4,893,823    
 

 

See accompanying Notes to Schedule of Investments.  |  1


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

September 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Senior Loans(a)  (continued)

   

CHEMICALS, PLASTICS, & RUBBER (continued)

   

Polar US Borrower, LLC
First Lien Term Loan, (LIBOR + 4.75%, 0.00% Floor), 4.75%, 08/17/25(b)(d)

  3,000,000       3,018,750    

Starfruit US Holdco, LLC
Term Loan, (LIBOR + 3.25%, 0.00% Floor), 3.25%, 09/19/25(b)(d)

  5,011,718       5,038,856    
   

 

 

   
      15,062,645    
   

 

 

   

CONSTRUCTION & BUILDING - 3.3%

   

Associated Asphalt Partners, LLC
Tranche B Term Loan, (LIBOR + 5.25%, 1.00% Floor), 7.49%, 04/05/24(b)

  1,991,062       1,997,294    

KBR, Inc.
Term Loan B, (LIBOR + 3.75%, 0.00% Floor), 5.99%, 04/25/25(b)(e)

  4,428,579       4,481,168    

Terra Millennium Corp.
First Out Term Loan, (LIBOR + 6.25%, 1.00% Floor), 8.50%, 10/31/22(b)(e)

  1,912,500       1,926,844    
   

 

 

   
      8,405,306    
   

 

 

   

CONSUMER GOODS: DURABLE - 0.9%

   

PT Holdings, LLC
First Lien Term Loan B, (LIBOR + 4.00%, 1.00% Floor), 6.39%, 12/09/24(b)

  1,615,117       1,618,154    

Second Lien Initial Loan, (LIBOR + 8.00%, 1.00% Floor), 10.39%,
12/08/25(b)(e)

  625,000       634,375    
   

 

 

   
      2,252,529    
   

 

 

   

CONSUMER GOODS: NON-DURABLE - 1.4%

   

American Greetings Corp.
Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 6.74%, 04/06/24(b)

  3,403,691       3,421,781    
   

 

 

   

CONTAINERS, PACKAGING & GLASS - 3.3%

   

Anchor Glass Container Corp.
July 2017 Additional Term Loan, (LIBOR + 2.75%, 1.00% Floor), 4.99%,
12/07/23(b)(d)

  5,255,965       4,746,425    

Hoover Group, Inc.
First Lien Initial Term Loan, (LIBOR + 7.25%, 1.00% Floor), 9.56%, 01/28/21(b)

  750,105       742,604    

SMI Acquisition, Inc.
First Lien Initial Term Loan, (LIBOR + 3.75%, 1.00% Floor), 6.09%, 11/01/24(b)

  2,885,613       2,765,384    
   

 

 

   
            8,254,413    
   

 

 

   
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

ENERGY: OIL & GAS - 0.3%

   

Ascent Resources - Marcellus, LLC
Exit Term Loan, (LIBOR + 6.50%, 1.00% Floor), 8.62%, 03/30/23(b)

  230,586       231,642    

Sheridan Investment Partners I, LLC
Deferred Principal Facility I, 10/01/19(e)(g)

  4,749       3,325    

Tranche B-2 Term Loan, (LIBOR + 3.50%, 0.75% Floor), 5.83%, 10/01/19(b)

  391,542       361,524    

Sheridan Production Partners I-A, L.P.
Deferred Principal Facility I-A,
10/01/19(e)(g)

  629       441    

Tranche B-2 Term Loan, (LIBOR + 3.50%, 0.75% Floor), 5.83%, 10/01/19(b)

  51,883       47,905    

Sheridan Production Partners I-M, L.P.
Deferred Principal Facility I-M,
10/01/19(e)(g)

  384       269    

Tranche B-2 Term Loan, (LIBOR + 3.50%, 0.75% Floor), 5.83%, 10/01/19(b)

  31,689       29,260    

Southcross Holdings Borrower, L.P.
Tranche B Term Loan (5.50% PIK), 9.00%, 04/13/23(h)(i)

  130,376       123,368    
   

 

 

   
              797,734    
   

 

 

   

HEALTHCARE & PHARMACEUTICALS - 19.5%

   

Akorn, Inc.
Term Loan, (LIBOR + 4.75%, 1.00% Floor), 7.00%, 04/16/21(b)

  3,769,533       3,661,159    

Auris Luxembourg III S.A.R.L (Luxembourg)
Term Loan, (LIBOR + 3.75%, 0.00% Floor), 3.75%, 07/24/25(b)(c)(d)

  1,887,324       1,913,284    

Bausch Health Companies, Inc. (Canada)
Initial Term Loan, (LIBOR + 3.00%, 0.00% Floor), 5.10%, 06/02/25(b)(c)

  975,000       981,050    

BioClinica Holding I, LP
First Lien Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.63%, 10/20/23(b)

  2,201,022       2,097,860    

BW NHHC HoldCo, Inc.
First Lien Initial Term Loan, (LIBOR + 5.00%, 0.00% Floor), 7.16%, 05/15/25(b)

  2,038,295       2,009,005    

Community Health Systems, Inc.
Incremental 2021 Term Loan H, (LIBOR + 3.25%, 1.00% Floor), 5.56%, 01/27/21(b)

  3,766,060       3,725,330    
 

 

2  |  See accompanying Notes to Schedule of Investments.


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

September 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Senior Loans(a)  (continued)

   

HEALTHCARE & PHARMACEUTICALS (continued)

   

CT Technologies Intermediate Hldgs, Inc.
Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.49%, 12/01/21(b)

  3,957,561             3,734,948    

Endo Luxembourg Finance I Co. S.A.R.L
Initial Term Loan, (LIBOR + 4.25%, 0.75% Floor), 6.50%, 04/29/24(b)

  2,984,887       3,009,452    

Hanger, Inc.
Term Loan B, (LIBOR + 3.50%, 0.00% Floor), 5.74%, 03/06/25(b)(d)(e)

  2,361,955       2,359,003    

Inovalon Holdings, Inc.
Term Loan, (LIBOR + 3.50%, 0.00% Floor), 5.63%, 04/02/25(b)

  2,781,866       2,790,559    

Lanai Holdings II, Inc.
First Lien Initial Term Loan, (LIBOR + 4.75%, 1.00% Floor), 7.09%, 08/29/22(b)

  2,718,561       2,623,412    

Lanai Holdings III, Inc.
Second Lien Initial Term Loan, (LIBOR + 8.50%, 1.00% Floor), 10.84%, 08/28/23(b)

  869,565       830,435    

Lantheus Medical Imaging, Inc.
New Term Loan B 2017, (LIBOR + 3.75%, 1.00% Floor), 5.99%, 06/30/22(b)

  1,035,590       1,035,590    

Medical Solutions Holdings, Inc.
First Lien Closing Date Term Loan, (LIBOR + 3.75%, 1.00% Floor), 5.99%, 06/14/24(b)

  2,243,362       2,251,775    

Second Lien Closing Date Loan, (LIBOR + 8.25%, 1.00% Floor), 10.49%, 06/16/25(b)

  2,000,000       2,007,500    

MModal, Inc.
Term Loan B, (LIBOR + 4.75%, 1.00% Floor), 7.27%, 02/13/23(b)

  2,025,535       2,026,812    

One Call Corp.
First Lien Extended Term Loan, (LIBOR + 5.25%, 1.00% Floor), 7.38%,
11/27/22(b)

  3,024,156       2,877,106    

Onex Schumacher Finance, LP
First Lien Initial Term Loan, (LIBOR + 4.00%, 1.00% Floor), 6.24%, 07/29/22(b)

  2,000,000       2,020,000    

Radiology Partners, Inc.
First Lien Term Loan B, (LIBOR + 4.25%, 0.00% Floor), 6.59%, 07/09/25(b)

  2,497,569       2,516,301    

Team Health Holdings, Inc.
Initial Term Loan, (LIBOR + 2.75%, 1.00% Floor), 4.99%, 02/06/24(b)

  2,900,952       2,826,615    
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

HEALTHCARE & PHARMACEUTICALS (continued)

 

 

U.S. Renal Care, Inc.
First Lien Initial Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.64%, 12/30/22(b)

  1,885,787       1,842,178    
   

 

 

   
            49,139,374    
   

 

 

   

HIGH TECH INDUSTRIES - 17.6%

 

 

DigiCert, Inc.
First Lien Term Loan, (LIBOR + 4.00%, 1.00% Floor), 6.24%, 10/31/24(b)(d)

  4,265,745       4,283,085    

Second Lien Term Loan, (LIBOR + 8.00%, 1.00% Floor), 10.24%,
10/31/25(b)

  3,014,727       3,012,843    

Flexera Software, LLC
First Lien Initial Term Loan, (LIBOR + 3.25%, 1.00% Floor), 5.50%,
02/26/25(b)(d)

  1,250,435       1,255,905    

Help/Systems Holdings, Inc.
First Lien Term Loan, (LIBOR + 3.75%, 0.00% Floor), 5.99%, 03/28/25(b)

  2,592,098       2,611,539    

ION Trading Finance, Ltd. (Ireland)
Initial Dollar Term Loan, (LIBOR + 4.00%, 1.00% Floor), 6.39%,
11/21/24(b)(c)(d)

  6,483,668       6,466,454    

Ivanti Software, Inc.
First Lien Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.33%, 01/20/24(b)

  3,969,058       4,007,081    

MA FinanceCo., LLC
Tranche B-3 Term Loan, (LIBOR + 2.50%, 0.00% Floor), 4.74%, 06/21/24(b)

  256,667       256,293    

Ocean Bidco, Inc.
Initial Dollar Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.39%,
03/21/25(b)(d)

  1,332,902       1,339,014    

Riverbed Technology, Inc.
First Amendment Term Loan, (LIBOR + 3.25%, 1.00% Floor), 5.50%, 04/24/22(b)

  3,987,813       3,987,574    

Seattle SpinCo, Inc.
Initial Term Loan, (LIBOR + 2.50%, 0.00% Floor), 4.74%, 06/21/24(b)

  1,733,333       1,730,811    

SS&C European Holdings, S.A.R.L (Luxembourg)
Term Loan B-4, (LIBOR + 2.25%, 0.00% Floor), 4.49%, 04/16/25(b)(c)(d)

  545,495       546,689    

SS&C Technologies, Inc.
Term Loan B-3, (LIBOR + 2.25%, 0.00% Floor), 4.49%, 04/16/25(b)(d)

  1,405,311       1,408,389    
 

 

See accompanying Notes to Schedule of Investments.  |  3


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

September 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Senior Loans(a)  (continued)

   

HIGH TECH INDUSTRIES (continued)

   

Syncsort, Inc.
First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.26%,
08/16/24(b)(d)

  3,480,221       3,492,402    

Second Lien Initial Term Loan, (LIBOR + 9.00%, 1.00% Floor), 11.24%, 08/18/25(b)

  2,500,000       2,508,337    

Triple Point Group Holdings, Inc.
First Lien Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.64%, 07/10/20(b)

  3,929,782       3,523,305    

Vertafore, Inc.
First Lien Initial Term Loan, (LIBOR + 3.25%, 0.00% Floor), 5.49%,
07/02/25(b)(d)

  3,000,000       3,016,335    

Second Lien Initial Term Loan, (LIBOR + 7.25%, 0.00% Floor), 9.49%,
07/02/26(b)

  1,000,000       1,010,630    
   

 

 

   
      44,456,686    
   

 

 

   

HOTEL, GAMING & LEISURE - 0.2%

 

 

Mohegan Tribal Gaming Authority
Term Loan A, (LIBOR + 3.75%, 0.00% Floor), 5.99%, 10/13/21(b)

  478,421       471,604    
   

 

 

   

MEDIA: ADVERTISING, PRINTING & PUBLISHING - 3.7%

 

 

Acosta, Inc.
Tranche B-1 Loan, (LIBOR + 3.25%, 1.00% Floor), 5.49%, 09/26/21(b)

  997,423       747,444    

Advantage Sales & Marketing, Inc.
First Lien Initial Term Loan, (LIBOR + 3.25%, 1.00% Floor), 5.49%, 07/23/21(b)

  1,808,697       1,679,375    

Incremental Term Loan B-2, (LIBOR + 3.25%, 1.00% Floor), 5.49%,
07/23/21(b)(d)

  2,186,434       2,019,719    

Second Lien Term Loan, (LIBOR + 6.50%, 1.00% Floor), 8.74%, 07/25/22(b)

  2,002,715       1,694,798    

F & W Media,Inc.
Term Loan B-1 (8.75% PIK), (LIBOR + 6.50%, 1.50% Floor), 8.75%,
05/24/22(b)(e)(i)

  332,809       332,809    

Term Loan B-2 (12.25% PIK), (LIBOR + 10.00%, 1.50% Floor), 12.25%, 05/24/22(b)(e)(i)

  911,862       7,389    

Getty Images, Inc.
Initial Term Loan, (LIBOR + 3.50%, 1.25% Floor), 5.74%, 10/18/19(b)

  2,822,840       2,807,131    
   

 

 

   
            9,288,665    
   

 

 

   
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

MEDIA: BROADCASTING & SUBSCRIPTION - 5.4%

 

 

Altice France S.A. (France)
USD Term Loan B-12, (LIBOR + 3.69%, 0.00% Floor), 5.85%, 01/31/26(b)(c)

  1,000,000       990,270    

USD Incremental Term Loan
B-13, (LIBOR + 4.00%, 0.00% Floor), 6.16%, 08/14/26(b)(c)

  4,114,432       4,090,918    

Emmis Operating Co.
Term Loan, (LIBOR + 7.00%, 1.00% Floor), 9.25%, 04/18/19(b)(e)

  227,950       226,526    

Global Eagle Entertainment, Inc.
Initial Term Loan, (LIBOR + 7.50%, 1.00% Floor), 10.02%, 01/06/23(b)

  4,887,208       5,046,042    

Univision Communications, Inc.
2017 Replacement Term Loan, (LIBOR + 2.75%, 1.00% Floor), 4.99%, 03/15/24(b)

  1,987,554       1,936,623    

Urban One, Inc.
Initial Term Loan, (LIBOR + 4.00%, 1.00% Floor), 6.25%, 04/18/23(b)

  1,431,812       1,405,259    
   

 

 

   
      13,695,638    
   

 

 

   

MEDIA: DIVERSIFIED & PRODUCTION - 0.9%

 

 

A-L Parent, LLC
Second Lien Initial Term Loan, (LIBOR + 7.25%, 1.00% Floor), 9.50%, 12/02/24(b)

  375,000       378,750    

DHX Media, Ltd. (Canada)
Initial Term Loan, (LIBOR + 3.75%, 1.00% Floor), 5.99%, 12/29/23(b)(c)

  2,010,687       1,971,730    
   

 

 

   
            2,350,480    
   

 

 

   

METALS & MINING - 0.0%

 

 

Magnetation, LLC / Mag Finance Corp.
DIP Term Loan, 12.00%, 10/14/16(e)(g)(h)

  1,127,504          
   

 

 

   

RETAIL - 7.6%

 

 

Academy, Ltd.
Initial Term Loan, (LIBOR + 4.00%, 1.00% Floor), 6.10%, 07/01/22(b)(d)

  4,158,428       3,245,050    

Charming Charlie, LLC

Term Loan A (5.00% PIK), (LIBOR + 10.00%, 1.00% Floor), 12.34%,
04/24/23(b)(e)(i)

  236,447       69,631    

Term Loan B (9.00% PIK), (LIBOR + 10.00%, 1.00% Floor), 12.34%,
04/24/23(b)(e)(i)

  286,570       84,391    

Vendor Payment Financing Facility, 20.00%, 05/15/19(e)(h)

  14,010       14,010    

EG America, LLC
Additional Facility Loan, (LIBOR + 4.00%, 0.00% Floor), 6.39%, 02/07/25(b)

  2,502,395       2,510,616    
 

 

4  |  See accompanying Notes to Schedule of Investments.


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

September 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Senior Loans(a)  (continued)

   

RETAIL (continued)

 

 

General Nutrition Centers, Inc.
Extended Term Loan B, (LIBOR + 9.25%, 0.75% Floor), 11.50%, 03/04/21(b)(d)

  984,332       972,028    

First In Last Out Term Loan,
(LIBOR + 7.00%, 0.00% Floor), 9.25%, 12/31/22(b)

  3,072,350       3,158,115    

J.C. Penney Corp.
Term Loan B, (LIBOR + 4.25%, 1.00% Floor), 6.57%, 06/23/23(b)

  993,421       915,437    

Neiman Marcus Group, Inc.
Other Term Loan, (LIBOR + 3.25%, 1.00% Floor), 5.37%, 10/25/20(b)(d)

  3,000,000       2,793,420    

Petco Animal Supplies, Inc.
Term Loan, (LIBOR + 3.25%, 1.00% Floor), 5.59%, 01/26/23(b)(d)

  3,791,674       3,085,020    

PetSmart, Inc.
Tranche B-2 Loan, (LIBOR + 3.00%, 1.00% Floor), 5.12%, 03/11/22(b)

  2,636,974       2,308,249    
   

 

 

   
            19,155,967    
   

 

 

   

SERVICES: BUSINESS - 14.2%

 

 

Air Medical Group Holdings, Inc.
2017-2 New Term Loan, (LIBOR + 4.25%, 1.00% Floor), 6.42%,
03/14/25(b)

  2,992,462       2,984,682    

Electro Rent Corp.
First Lien Initial Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.19%,
01/31/24(b)

  2,250,247       2,276,508    

Enterprise Merger Sub, Inc.
Term Loan, (LIBOR + 3.75%, 0.00% Floor), 3.75%, 09/26/25(b)(d)

  4,922,121       4,898,273    

Evergreen Skills Lux S.A.R.L (Luxembourg)
First Lien Initial Term Loan, (LIBOR + 4.75%, 1.00% Floor), 6.99%,
04/28/21(b)(c)

  4,164,818       3,972,195    

Second Lien Initial Term Loan, (LIBOR + 8.25%, 1.00% Floor), 10.49%, 04/28/22(b)(c)

  1,000,000       853,125    

GI Revelation Acquisition, LLC
First Lien Term Loan, (LIBOR + 5.00%, 0.00% Floor), 7.24%, 04/16/25(b)

  1,995,000       2,002,481    

Michael Baker International, LLC
Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 6.74%, 11/21/22(b)

  918,955       923,550    

National Intergovernmental Purchasing Alliance Co.
First Lien Initial Term Loan, (LIBOR + 3.75%, 0.00% Floor), 6.14%,
05/23/25(b)

  1,557,764       1,565,553    
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

SERVICES: BUSINESS (continued)

 

 

Onex Carestream Finance, L.P.
Second Lien Term Loan, (LIBOR + 8.50%, 1.00% Floor), 10.74%,
12/07/19(b)

  1,000,000       998,250    

Parker Private Merger Sub, Inc.
First Lien Term Loan B, (LIBOR + 3.75%, 0.00% Floor), 3.75%,
09/17/25(b)(d)

  1,116,164       1,124,535    

R1 RCM, Inc.
Initial Term Loan, (LIBOR + 5.25%, 0.00% Floor), 7.43%, 05/08/25(b)(e)

  1,428,571       1,432,142    

Refinitiv US Holdings, Inc.
Term Loan B, (LIBOR + 3.75%, 0.00% Floor), 3.75%, 10/01/25(b)(d)

  4,137,385       4,133,082    

SGS Cayman, L.P.
Initial Cayman Term Loan, (LIBOR + 5.38%, 1.00% Floor), 7.76%, 04/23/21(b)

  778,268       746,815    

STG-Fairway Acquisitions, Inc.
First Lien Term Loan, (LIBOR + 5.25%, 1.00% Floor), 7.59%, 06/30/22(b)

  2,577,911       2,581,134    

Sutherland Global Services, Inc.
Initial U.S. Term Loan, (LIBOR + 5.38%, 1.00% Floor), 7.76%, 04/23/21(b)

  3,343,403       3,208,279    

Verscend Holding Corp.
Term Loan B, (LIBOR + 4.50%, 0.00% Floor), 6.74%, 08/27/25(b)

  2,000,000       2,020,420    
   

 

 

   
            35,721,024    
   

 

 

   

SERVICES: CONSUMER - 1.9%

     

Laureate Education, Inc.
Series 2024 Term Loan, (LIBOR + 3.50%, 1.00% Floor), 5.74%, 04/26/24(b)

  2,219,334       2,232,417    

USS Ultimate Holdings, Inc.
Second Lien Initial Term Loan, (LIBOR + 7.75%, 1.00% Floor), 9.99%,
08/25/25(b)(d)

  2,500,000       2,512,500    
   

 

 

   
            4,744,917    
   

 

 

   

TELECOMMUNICATIONS - 12.4%

     

CenturyLink, Inc.
Initial Term Loan B, (LIBOR + 2.75%, 0.00% Floor), 4.99%, 01/31/25(b)(d)

  3,982,462       3,959,563    

Flight Bidco, Inc.
First Lien Initial Term Loan, (LIBOR + 3.50%, 0.00% Floor), 5.84%,
07/23/25(b)(d)

  3,092,364       3,096,229    

Frontier Communications Corp.
Initial Term Loan, (LIBOR + 2.75%, 0.00% Floor), 5.00%, 03/31/21(b)(d)

  2,730,282       2,685,069    

Term Loan, (LIBOR + 4.38%, 0.00% Floor), 6.63%, 10/12/21(b)

  4,403,714       4,333,034    
 

 

See accompanying Notes to Schedule of Investments.  |  5


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

September 30, 2018 (unaudited)

 

   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

Senior Loans(a)  (continued)

   

TELECOMMUNICATIONS (continued)

 

 

Intelsat Jackson Holdings S.A. (Luxembourg)
Tranche B-4 Term Loan, (LIBOR + 4.50%, 1.00% Floor), 6.73%,
01/02/24(b)(c)

  3,406,019       3,589,109    

Tranche B-5 Term Loan, 6.63%, 01/02/24(c)(h)

  3,820,586       3,991,557    

Securus Technologies Holdings, Inc.
First Lien Initial Term Loan, (LIBOR + 4.50%, 1.00% Floor), 6.74%,
11/01/24(b)

  1,703,263       1,710,076    

TDC A/S (Denmark)
Facility B2, (LIBOR + 3.50%, 0.00% Floor), 5.84%, 06/04/25(b)(c)

  3,076,358       3,111,736    

U.S. TelePacific Corp.
Advance Term Loan, (LIBOR + 5.00%, 1.00% Floor), 7.39%, 05/02/23(b)

  2,560,538       2,525,331    

Zacapa, LLC
Initial Term Loan, (LIBOR + 5.00%, 0.75% Floor), 7.39%, 07/02/25(b)

  2,333,333       2,350,833    
   

 

 

   
      31,352,537    
   

 

 

   

TRANSPORTATION: CARGO - 0.8%

 

 

Savage Enterprises, LLC
Initial Term Loan, (LIBOR + 4.50%, 0.00% Floor), 6.60%, 08/01/25(b)

  1,983,570       2,013,730    
   

 

 

   

TRANSPORTATION: CONSUMER - 0.9%

 

 

Travel Leaders Group, LLC
2018 Refinancing Term Loan, (LIBOR + 4.00%, 0.00% Floor), 6.16%, 01/25/24(b)

  2,217,893       2,247,003    
   

 

 

   

UTILITIES: ELECTRIC - 1.0%

 

 

Brookfield WEC Holdings, Inc.
First Lien Initial Term Loan, (LIBOR + 3.75%, 0.75% Floor), 5.99%,
08/01/25(b)

  2,534,984       2,569,371    
   

 

 

   

Total Senior Loans
(Cost $303,393,618)

          301,794,753    
   

 

 

   

Corporate Notes and Bonds - 19.7%(h)

   

AEROSPACE & DEFENSE - 0.5%

   

BBA U.S. Holdings, Inc.
5.38%, 05/01/26(j)

  1,240,000       1,244,650    
   

 

 

   

BANKING, FINANCE, INSURANCE & REAL ESTATE - 1.0%

 

 

Greystar Real Estate Partners, LLC
5.75%, 12/01/25(j)

  1,500,000       1,466,250    

NFP Corp.
6.88%, 07/15/25(j)

  1,000,000       1,005,000    
   

 

 

   
    2,471,250    
   

 

 

   
   

Principal

 Amount ($) 

 

 

 Value ($) 

 

     

BEVERAGE, FOOD & TOBACCO - 1.5%

 

 

JBS, S.A.
6.75%, 02/15/28(j)

  2,000,000       1,990,000    

Sigma Holdco B.V. (Netherlands)
7.88%, 05/15/26(c)(j)

  2,000,000       1,885,000    
   

 

 

   
            3,875,000    
   

 

 

   

CAPITAL EQUIPMENT - 0.8%

 

 

Stevens Holding Co., Inc.
6.13%, 10/01/26(j)

  2,000,000       2,037,500    
   

 

 

   

CHEMICALS, PLASTICS & RUBBER - 0.4%

 

 

Starfruit US Holdco, LLC (Netherlands)
8.00%, 10/01/26(c)(j)

  1,000,000       1,016,250    
   

 

 

   

CONTAINERS, PACKAGING & GLASS - 0.4%

 

 

Reynolds Group Holdings, Inc.
6.88%, 02/15/21

  1,069,414       1,082,782    
   

 

 

   

ENERGY: OIL & GAS - 1.9%

 

 

Moss Creek Resources Holdings, Inc.
7.50%, 01/15/26(j)

  4,762,000       4,779,857    
   

 

 

   

HEALTHCARE & PHARMACEUTICALS - 3.5%

 

 

Bausch Health Companies, Inc. (Canada)

     

5.63%, 12/01/21(c)(j)

  2,389,000       2,389,000    

5.88%, 05/15/23(c)(j)

  1,111,000       1,087,391    

6.50%, 03/15/22(c)(j)

  500,000       521,250    

Centene Escrow I Corp.
5.38%, 06/01/26(j)

  2,000,000       2,052,700    

Community Health Systems, Inc.
8.63%, 01/15/24(j)

  1,005,000       1,043,944    

Team Health Holdings, Inc.
6.38%, 02/01/25(j)

  2,000,000       1,765,000    
   

 

 

   
      8,859,285    
   

 

 

   

HIGH TECH INDUSTRIES - 1.2%

 

 

Infor Software Parent, LLC
7.13%, 05/01/21(j)

  1,000,000       1,013,740    

Riverbed Technology, Inc.
8.88%, 03/01/23(j)

  2,000,000       1,892,500    
   

 

 

   
      2,906,240    
   

 

 

   

HOTEL, GAMING & LEISURE - 2.7%

 

 

Churchill Downs, Inc.
4.75%, 01/15/28(j)

  3,000,000       2,820,000    

Hilton Grand Vacations Borrower, LLC
6.13%, 12/01/24

  1,100,000       1,126,125    

Scientific Games Corp.
5.00%, 10/15/25(j)

  3,000,000       2,857,500    
   

 

 

   
      6,803,625    
   

 

 

   

MEDIA: BROADCASTING & SUBSCRIPTION - 2.8%

 

 

CSC Holdings, LLC
5.38%, 02/01/28(j)

  1,000,000       955,000    

10.88%, 10/15/25(j)

  477,000       555,705    

Univision Communications, Inc.

     

5.13%, 05/15/23(j)

  2,500,000       2,393,750    

5.13%, 02/15/25(j)

  2,500,000       2,343,750    
 

 

6  |  See accompanying Notes to Schedule of Investments.


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

September 30, 2018 (unaudited)

 

   

Share

 Quantity 

 

 

 Value ($) 

 

     

Corporate Notes and Bonds(h)  (continued)

 

 

MEDIA: BROADCASTING & SUBSCRIPTION (continued)

 

 

Urban One, Inc.
7.38%, 04/15/22(j)

  787,000       783,065    
   

 

 

   
      7,031,270    
   

 

 

   

METALS & MINING - 0.0%

   

ERP Iron Ore, LLC
LIBOR + 8.00%, 12/31/19(e)(g)(k)

  121,662       14,095    

Magnetation, LLC / Mag Finance Corp.
11.00%, 05/15/18(e)(g)(j)(l)

  2,937,000          
   

 

 

   
      14,095    
   

 

 

   

RETAIL - 0.3%

   

PetSmart, Inc.

     

5.88%, 06/01/25(j)

  145,000       119,580    

8.88%, 06/01/25(j)

  717,000       519,682    
   

 

 

   
      639,262    
   

 

 

   

SERVICES: BUSINESS - 1.0%

   

Refinitiv US Holdings, Inc.

     

6.25%, 05/15/26(j)

  2,000,000       2,009,880    

8.25%, 11/15/26(j)

  500,000       498,220    
   

 

 

   
              2,508,100    
   

 

 

   

SERVICES: CONSUMER - 0.4%

   

NVA Holdings, Inc.
6.88%, 04/01/26(j)

  1,000,000       1,002,500    
   

 

 

   

TELECOMMUNICATIONS - 1.3%

   

Orbcomm, Inc.
8.00%, 04/01/24(j)

  3,194,000       3,401,610    
   

 

 

   

Total Corporate Notes and Bonds
(Cost $49,629,256)

    49,673,276    
   

 

 

   

Structured Products - 10.8%(m)

     

Anchorage Capital CLO, Ltd.
(Cayman Islands)

     

Series 2015-6A, Class ER, 8.69%,
07/15/30(c)(j)(n)

  4,400,000       4,413,134    

Babson CLO Ltd. (Cayman Islands)

     

Series 2014-IA, Class E, 8.00%, 07/20/25(c)(j)(n)

  1,110,000       1,067,715    

Fortress Credit Opportunities CLO, Ltd. (Cayman Islands)

     

Series 2018-11A, Class E, 9.50%, 04/15/31(c)(j)(n)

  4,000,000       3,859,440    

Guggenheim 1828 CLO, LLC
(Cayman Island)

     

Series 2016-1A, Class D, 9.34%, 04/15/28(c)(j)(n)

  4,000,000       4,002,592    

JFIN CLO, Ltd. (Cayman Islands)

     

Series 2015-1A, Class E, 7.33%, 03/15/26(c)(j)(n)

  4,500,000       4,322,857    
   

Share

 Quantity 

 

 

 Value ($) 

 

     

TIAA Churchill Middle Market CLO (Cayman Islands)

     

Series 2016-1A, Class E2, 10.35%, 10/20/28(c)(j)(n)

  2,000,000               2,000,716    

Series 2017-1A, Class E, 9.64%, 01/24/30(c)(j)(n)

  4,000,000       3,858,260    

Voya CLO, Ltd. (Cayman Islands)

     

Series 2015-3A, Series E, 8.85%, 10/20/27(c)(j)(n)

  1,000,000       969,582    

Zais CLO, Ltd. (Cayman Islands)

     

Series 2016-2A, Series D, 9.34%, 10/15/28(c)(j)(n)

  1,000,000       1,000,263    

Series 2017-2A, Series E, 9.49%, 04/15/30(c)(j)(n)

  1,750,000       1,753,061    
   

 

 

   

Total Structured Products
(Cost $26,446,185)

      27,247,620    
   

 

 

   

Common Stocks - 0.3%

   

BANKING, FINANCE, INSURANCE & REAL ESTATE - 0.0%

 

 

Medical Card System, Inc.(e)(g)

  914,981       44,944    
   

 

 

   

ENERGY: OIL & GAS - 0.3%

 

 

Ascent Resources Marcellus Holdings, Inc.(g)

  165,654       530,093    

HGIM Corp.(e)(g)

  1,463       79,002    

Southcross Holdings Borrower, GP
LLC(e)(g)

  129          

Southcross Holdings Borrower, LP, Class A-II(e)(g)

  129       33,056    
   

 

 

   
      642,151    
   

 

 

   

MEDIA: ADVERTISING, PRINTING & PUBLISHING - 0.0%

 

 

F & W Media, Inc.(e)(g)

  9,510          
   

 

 

   

RETAIL - 0.0%

 

 

Charming Charlie, LLC(e)(g)

  2,679,190          
   

 

 

   

Total Common Stock
(Cost $729,082)

      687,095    
   

 

 

   

Preferred Stock - 1.6%

   

BANKING, FINANCE, INSURANCE & REAL ESTATE - 1.6%

 

 

Watford Holdings, Ltd. (Bermuda)
8.50%,(c)(e)(j)

  160,000       3,897,596    
   

 

 

   

Total Preferred Stock
(Cost $3,920,000)

      3,897,596    
   

 

 

   

Warrants - 0.0%

   

ENERGY: OIL & GAS - 0.0%

   

Ascent Resources Marcellus Holdings,
Inc.(e)(g)

  42,889       1,287    
   

 

 

   

Total Warrants
(Cost $4,289)

      1,287    
   

 

 

   

Total Investments-152.1%
(Cost of $384,122,430)

      383,301,627    

Other Assets & Liabilities, Net-(2.0)%

      (5,040,091  

Loan Outstanding-(50.1)%(o)(p)

      (126,227,384  
   

 

 

   

Net Assets -100.0%

      252,034,152    
   

 

 

   
 

 

See accompanying Notes to Schedule of Investments.  |  7


Apollo Tactical Income Fund Inc.

Schedule of Investments  (continued)

September 30, 2018 (unaudited)

 

 

(a) 

“Senior Loans” are senior, secured loans made to companies whose debt is below investment grade as well as investments with similar economic characteristics. Senior Loans typically hold a first lien priority and, unless otherwise indicated, are required to pay interest at floating rates that are periodically reset by reference to a base lending rate plus a spread. In some instances, the rates shown represent the weighted average rate as of September 30, 2018. Senior Loans are generally not registered under the Securities Act of 1933 (the “1933 Act”) and often incorporate certain restrictions on resale and cannot be sold publicly. Senior Loans often require prepayments from excess cash flow or permit the borrower to repay at its election. The degree to which borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with accuracy. As a result, the actual maturity may be substantially less than the stated maturity.

(b) 

The interest rate on this Senior Loan is subject to a base lending rate plus a spread. These base lending rates are primarily the London Interbank Offered Rate (“LIBOR”) and secondarily the prime rate offered by one or more major U.S. banks (“Prime”). The interest rate is subject to a minimum floor, which may be less than or greater than the prevailing period end LIBOR/Prime rate. As of September 30, 2018, the 1, 2, 3 and 6 month LIBOR rates were 2.26%, 2.31%, 2.40% and 2.60%, respectively, and the Prime lending rate was 5.25%. Senior Loans may contain multiple contracts of the same issuer which may be subject to base lending rates of both LIBOR and Prime (“Variable”) in addition to the stated spread.

(c) 

Foreign issuer traded in U.S. dollars.

(d) 

All or a portion of this Senior Loan position has not settled. Full contract rates do not take effect until settlement date and therefore are subject to change.

(e) 

Fair Value Level 3 security.

(f) 

The issuer is in default of its payment obligations as of March 19, 2017, as such, income is no longer being accrued.

(g)

Non-income producing asset.

(h) 

Fixed rate asset.

(i) 

Represents a payment-in-kind (“PIK”) security, which may pay interest in additional principal amount.

(j) 

Securities exempt from registration pursuant to Rule 144A under the 1933 Act. These securities may only be resold in transactions exempt from registration to qualified institutional buyers. At September 30, 2018, these securities amounted to $78,595,490, or 31.18% of net assets.

(k) 

The issuer is in default of its payment obligations as of July 5, 2018, as such, income is no longer being accrued.

(l) 

The issuer is in default of its payment obligations as of May 5, 2015, as such, income is no longer being accrued.

(m) 

Structured Products include collateralized loan obligations (“CLOs”). A CLO typically takes the form of a financing company (generally called a special purpose vehicle or “SPV”), created to reapportion the risk and return characteristics of a pool of assets. While the assets underlying CLOs are often Senior Loans or corporate notes and bonds, the assets may also include (i) subordinated loans; (ii) debt tranches of other CLOs; and (iii) equity securities incidental to investments in Senior Loans. The Fund may invest in lower tranches of CLOs, which typically experience a lower recovery, greater risk of loss or deferral or non-payment of interest than more senior tranches of the CLO. A key feature of the CLO structure is the prioritization of the cash flows from a pool of debt securities among the several classes of the CLO. The SPV is a company founded for the purpose of securitizing payment claims arising out of this asset pool. On this basis, marketable securities are issued by the SPV and the redemption of these securities typically takes place at maturity out of the cash flow generated by the collected claims.

(n) 

Floating rate asset. The interest rate shown reflects the rate in effect at September 30, 2018.

(o) 

The Fund has granted a security interest in substantially all of its assets in the event of default under the credit facility.

(p) 

Principal $126,500,000 less unamortized deferred financing costs of $272,616.

 

8  |  See accompanying Notes to Schedule of Investments.


Apollo Tactical Income Fund Inc.

Notes to Schedule of Investments

September 30, 2018 (unaudited)

Security Valuation

Apollo Tactical Income Fund Inc. (the “Fund”) values its investments primarily using the mean of the bid and ask prices provided by a nationally recognized security pricing service or broker. Senior Loans, corporate notes and bonds, structured products, common stock, preferred stock and warrants are priced based on valuations provided by an approved independent pricing service or broker, if available. If market or broker quotations are not available, or a price is not available from an independent pricing service or broker, or if the price provided by the independent pricing service or broker is believed to be unreliable, the security will be fair valued pursuant to procedures adopted by the Fund’s board of directors (the “Board”). In general, the fair value of a security is the amount that the Fund might reasonably expect to receive upon the sale of an asset or pay to transfer a liability in an orderly transaction between willing market participants at the reporting date. Fair value procedures generally take into account any factors deemed relevant, which may include, among others, (i) the nature and pricing history of the security, (ii) the liquidity or illiquidity of the market for the particular security, (iii) recent purchases or sales transactions for the particular security or similar securities and (iv) press releases and other information published about the issuer. In these cases, the Fund’s net asset value (“NAV”) will reflect the affected portfolio securities’ fair value as determined in the judgment of the Board or its designee instead of being determined by the market. Using a fair value pricing methodology to value securities may result in a value that is different from a security’s most recent sale price and from the prices used by other investment companies to calculate their NAV. Determination of fair value is uncertain because it involves subjective judgments and estimates. There can be no assurance that the Fund’s valuation of a security will not differ from the amount that it realizes upon the sale of such security.

Fair Value Measurements

The Fund has performed an analysis of all existing investments to determine the significance and character of all inputs to their fair value determination. The levels of fair value inputs used to measure the Fund’s investments are characterized into a fair value hierarchy. The three levels of the fair value hierarchy are described below:

Level 1 — Quoted unadjusted prices for identical assets and liabilities in active markets to which the Fund has access at the date of measurement;

Level 2 — Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, but are valued based on executed trades, broker quotations that constitute an executable price, and alternative pricing sources supported by observable inputs which, in each case, are either directly or indirectly observable for the asset in connection with market data at the measurement date; and

Level 3 — Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. In certain cases, investments classified within Level 3 may include securities for which the Fund has obtained indicative quotes from broker-dealers that do not necessarily represent prices the broker may be willing to trade on, as such quotes can be subject to material management judgment. Unobservable inputs are those inputs that reflect the Fund’s own assumptions that market participants would use to price the asset or liability based on the best available information.

At the end of each reporting period, management evaluates the Level 2 and Level 3 assets, if any, for changes in liquidity, including but not limited to: whether a broker is willing to execute at the quoted price, the depth and consistency of prices from independent pricing services, and the existence of contemporaneous, observable trades in the market.

 

  |  9


Apollo Tactical Income Fund Inc.

Notes to Schedule of Investments  (continued)

September 30, 2018 (unaudited)

 

The valuation techniques used by the Fund to measure fair value at September 30, 2018 maximized the use of observable inputs and minimized the use of unobservable inputs. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Transfers into and out of the levels are recognized at the value at the end of the period. A summary of the Fund’s investments categorized in the fair value hierarchy as of September 30, 2018 is as follows:

 

 

  Apollo Tactical Income Fund Inc.

 

                 
                 
     Total Fair Value at
      September 30, 2018      
  

Level 1

Quoted Price

  Level 2
Significant
Observable
Inputs
  Level 3  
Significant  
Unobservable  
Inputs  
                 

 

Assets:

                 

Cash and Cash Equivalents

     $ 14,092,983      $ 14,092,983     $     $

Senior Loans

       301,794,753              283,803,529       17,991,224

Corporate Notes and Bonds

       49,673,276              49,659,181       14,095

Structured Products

       27,247,620              27,247,620      

Common Stock

       687,095              530,093       157,002

Preferred Stock

       3,897,596                    3,897,596

Warrants

       1,287                    1,287

Unrealized appreciation on Unfunded Loan Commitments

       1,279              1,279      
    

 

 

      

 

 

     

 

 

     

 

 

 

Total Assets

     $ 397,395,889        $ 14,092,983     $ 361,241,702     $ 22,061,204
    

 

 

      

 

 

     

 

 

     

 

 

 

The following is a reconciliation of Level 3 holdings for which significant unobservable inputs were used in determining fair value for the period January 1, 2018 through September 30, 2018:

 

 

  Apollo Tactical Income Fund Inc.

 

           
           
     Total   Senior
Loans
  Corporate
Notes
and Bonds
  Common
Stock
  Preferred
Stock
  Warrants    
                        

 

Total Fair Value, beginning of the period

     $ 23,768,803     $ 19,745,730     $ 40,335     $ 67,513     $ 3,915,225     $

Purchases, including capitalized PIK

       10,910,632       10,767,475             138,868             4,289

Sales/Paydowns

       (10,122,020 )       (10,089,225 )       (32,795 )                  

Accretion/(amortization) of discounts/(premiums)

       332,532       322,191       10,341                  

Net realized gain/(loss)

       261,591       243,430       18,161                  

Change in net unrealized appreciation/(depreciation)

       (963,064 )       (871,107 )       (21,947 )       (49,379 )       (17,629 )       (3,002 )

Transfer into Level 3

       860,901       860,901                        

Transfers out of Level 3

       (2,988,171 )       (2,988,171 )                        
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Total Fair Value, end of period

     $ 22,061,204     $ 17,991,224     $ 14,095     $       157,002     $ 3,897,596     $ 1,287
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Assets were transferred from Level 2 to Level 3 or from Level 3 to Level 2 as a result of changes in levels of liquid market observability when subject to various criteria as discussed previously. There were no transfers between Level 1 and Level 2 fair value measurement during the period shown. The net change in unrealized appreciation/(depreciation) attributable to Level 3 investments still held at September 30, 2018 was $(336,431).

 

10  |


Apollo Tactical Income Fund Inc.

Notes to Schedule of Investments  (continued)

September 30, 2018 (unaudited)

 

The following table provides quantitative measures used to determine the fair values of the Level 3 investments as of September 30, 2018:

 

 

  Apollo Tactical Income Fund Inc.

 

    

  Assets    Fair Value at
September 30, 2018
        Valuation Technique(s)(a)    Unobservable Input(s)   

Range of

      Unobservable      

Input(s) Utilized

                  

Senior Loans

     $ 13,297,547        

Independent pricing service and/or broker quotes

   Vendor and/or broker quotes    N/A
       4,163,131        

Discounted Cash Flow(b)

   Discount Rate(b)    22.6%
       154,022        

Recoverability(c)(d)

  

Liquidation Proceeds(c)

EBITDA / EV Multiple(d)

  

$33.5m - $39.9m

$12m / 3.0x

       340,198        

Recoverability(c)

   Liquidation Proceeds(c)    $15.2m
              

Recoverability(c)

   Liquidation Proceeds(c)    $0
       36,326        

Discounted Cash Flow(b)

   Discount Rate(b)    2.87%
            

Recoverability(e)

       Estimated Transaction Value(e)        N/A

Corporate Notes and Bonds

       14,095        

Recoverability(c)

   Liquidation Proceeds(c)    $10.9m
              

Recoverability(c)

   Liquidation Proceeds(c)    $0

Common Stock

              

Recoverability(c)(d)

   Liquidation Proceeds(c)    $33.5m - $39.9m
                EBITDA / EV Multiple(d)    $12m / 3.0x
              

Recoverability(c)

   Liquidation Proceeds(c)    $15.2m
       44,944        

Option Model(f)

   Volatility(f)    20.7%
       112,058        

Independent pricing service and/or broker quotes

   Vendor and/or broker quotes    N/A

Preferred Stock

       3,897,596        

Discounted Cash Flow(b)

   Discount Rate(b)    8.72%

Warrants

       1,287        

Independent pricing service and/or broker quotes

   Vendor and/or broker quotes    N/A
    

 

 

               

Total Fair Value

     $ 22,061,204              
    

 

 

               
                  

 

(a) 

For the assets which have multiple valuation techniques, the Fund may rely on the techniques individually or in aggregate based on a weight ranging from 0-100%.

(b) 

The Fund utilized a discounted cash flow model to fair value this security. The significant unobservable input used in the valuation model was the discount rate, which was determined based on the market rates an investor would expect for a similar investment with similar risks. The discount rate was applied to present value the projected cash flows in the valuation model. Significant increases in the discount rate may significantly lower the fair value of an investment; conversely, significant decreases in the discount rate may significantly increase the fair value of an investment.

(c) 

The Fund utilized a recoverability approach to fair value this security, specifically a liquidation analysis. There are various, company specific inputs used in the valuation analysis that relate to the liquidation value of a company’s assets. The significant unobservable inputs used in the valuation model were liquidation proceeds. Significant increases or decreases in the input in isolation may result in a significantly higher or lower fair value measurement.

(d) 

The Fund utilized a recoverability approach to fair value these securities. The significant unobservable inputs used in the valuation model were EBITDA and enterprise value multiple. Significant increases or decreases in the input in isolation may result in a significantly higher or lower fair value measurement.

(e) 

The Fund utilized a recoverability approach to fair value this security. The significant unobservable input used in the valuation model was an estimated transaction value. Significant increases or decreases in the input in isolation may result in a significantly higher or lower fair value measurement.

(f) 

The Fund utilized a Black-Scholes options pricing model to fair value this security. The significant unobservable input used in the valuation model was volatility. Significant increases or decreases in the input in isolation may result in a significantly higher or lower fair value measurement.

 

  |  11


Apollo Tactical Income Fund Inc.

Notes to Schedule of Investments  (continued)

September 30, 2018 (unaudited)

 

Federal Tax Information

Cost for U.S federal income tax purposes differs from book basis primarily due to the deferral of losses from wash sales. Unrealized appreciation and depreciation on investments as of September 30, 2018 were as follows:

 

    

Apollo

Tactical

Income
Fund Inc.

 
  

 

Federal tax basis, cost

   $ 384,625,756  
  

 

 

 

Unrealized appreciation

   $ 4,262,844  

Unrealized depreciation

     (5,586,974
  

 

 

 

Net unrealized appreciation/(depreciation)

   $ (1,324,130
  

 

 

 

General Commitments and Contingencies

As of September 30, 2018, the Fund had unfunded loan commitments outstanding, which could be extended at the option of the borrower, as detailed below:

 

Borrower    Unfunded Loan  
Commitments  
    

Charming Charlie, LLC

     $ 172,787   

Securus Technologies Holdings, Inc.

       299,063   
    

 

 

    

Total unfunded loan commitments

     $ 471,850   
    

 

 

    

For more information with regard to significant accounting policies, see the Fund’s most recent semi-annual report filed with the Securities and Exchange Commission.

 

12  |  


Item 2. Controls and Procedures.

 

  (a)

The Fund’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the Fund’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended.

 

  (b)

There were no changes in the Fund’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the Fund’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Fund’s internal control over financial reporting.

Item 3. Exhibits.

 

  (a)

Certifications pursuant to Rule 30a-2(a) under the 1940 Act are attached hereto.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant)     Apollo Tactical Income Fund Inc.                                        

By (Signature and Title)       /s/ Joseph Moroney                                          

                                               Joseph Moroney, President

                                               (principal executive officer)

Date    11/15/18                                                                                               

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)       /s/ Joseph Moroney                                          

                                               Joseph Moroney, President

                                               (principal executive officer)

Date    11/15/18                                                                                               

By (Signature and Title)       /s/ Frank Marra                                                  

                                               Frank Marra, Treasurer and Chief Financial Officer

                                               (principal financial officer)

Date    11/15/18