Joint venture with Prime Marine to establish an operated platform of LR1 Product Tankers.
BDC Credit Reporter View
5/30/2019: Besides a slight devaluation in the value of the equity stake, there was no new discussion by AINV or any news that we could find. No change in our view or outlook. This remains one of AINV’s largest investments in dollar size and requires above average monitoring as a result, but there’s little public info available even though AINV owns the controlling interest and could let its shareholders know more.
4/9/2019: From the outset, we’ve been concerned about the Company given that shipping is a cyclical and specialized business and BDCs have no business being involved. In this case Apollo has been involved since 2015 and the BDC owns 85% of the equity ! The decision to buy out the senior secured lender to the tune of $42mn in early 2018 may prove to be a stroke of genius. However, for the moment, all that has followed is lower valuations of the equity tranche of this substantial investment. Public information is very minimal. We found no website or LinkedIn page, so we have to rely heavily on the quarterly valuations from AINV.
IQ 2019: Equity valued at 26% discount, debt at par. [AINV FY 2019 10-K]
IVQ 2018: Equity valued at 23% discount, debt at par.
IQ 2018: Added 2023 $42mn Term Loan . At the time $48mn equity invested valued at 13% discount.
From CC transcript: “We deployed $42 million in Dynamic Product Tankers during the period to redeem debt from the existing lender, a move which we believe greatly enhances our flexibility. The new loan represents the senior part of the capital structure and, therefore, do not add to the risk position of the assets”.
2015: AINV initiated with $38mn in equity. Owns 85% of equity, according to 10-K. Expect dividend distributions on occasional basis.
As of September 30, 2015, Dynamic Product Tankers (Prime), LLC has various classes of limited liability interests outstanding of which Company holds Class A-1 and Class A-3 units which are identical except that Class A-1 unit is voting and Class A-3 unit is non-voting. The units entitle the Company to appoint three out of five managers to the board of managers.