Apollo Investment (AINV) has been invested in Golden Bear 2016-R since IVQ 2016, and the investment has been underperforming – by our standards – since IQ 2018. However, we’ve refrained from writing about Golden Bear before because we were – and remain – somewhat unclear what the investment consists of. We know Golden Bear is some sort of securitization – presumably the equity portion – and that AINV is a 100% owner. We also know that the BDC booked $1.2mn of dividend income from that source in the IQ 2021, which is consistent with the payout in the last three years. What we don’t know is what assets Golden Bear is securitizing, and why AINV has reduced by a third the value of the $16.8mn invested at cost in the vehicle.
We have rated Golden Bear CCR 4 because it seems unlikely the BDC will recoup its capital invested. The latest valuation is slightly better than the prior quarter, and improved on the worst discount of 45% reached in the IIIQ 2020.
We’ll continue to provide occasional updates, but neither the amount of FMV nor the income involved is of great importance to AINV.