Apollo Global Management (APO) announced pricing on their new Jr Subordinated Notes.
The fixed-rate resettable issue prices at 7.625%. The issue resets to the 5 year treasury rate plus a spread of 3.226% in about 5 year and then every 5 years thereafter.
The issue is not trading now, but likely will over the course of the next week to 10 days – the ticker will be APOS.
The issue is nicely investment grade.
The pricing term sheet is here.
No retail allocation for Apollo. Institutional only.
I think it’s well priced for Apollo. If all state had to pay 7 1/4, JNL 8 and Lincoln 9 they got a deal
Anyone have any luck buying this by calling into the bond desk?
I wish the “reset rate” was a little higher. My crystal ball is not working so its hard to see what the 5 year treasury will be in 5 years. Maybe buy it for 3 and then sell it???
Do you think they will redeem Aspen and Athene prefs also?
Or is it that it doesnt affect them directly because they are subsidiaries? At least the market has not repriced them
No I don’t think so..BUT..I heard a call discussing the GE GS WFC and other fixed to floats with incentives to refi in current markets. So expect more……There is much in the 1000 market looking at redemptions. As for AHL C who know, ATH E is under 24 and its 775. AAM has 2 twenty five dollar pfds. I’m not able to look now but I think they are 2025 calls??
Tims note says And B getting called. Which would be a big win for shareholders!!
It’s stated in the Use of Proceeds for this new issue
why would they call 6.35, just to finance themselves at 7.35 ?
Because this one is an interest expense against revenue, and the other was not. They are betting that rates are going to fall between now and 2028
I mentioned elsewhere Apollo’s statement, “Following the redemption of the AAM Preferred Stock, AAM intends to terminate its separate filings under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). I suspect, but I don’t know, that this might have something to do with it
About 25 minutes before the market closed Thursday 8/17 I received an email alert from the inheritor of Doug Le Du’s cdx3 newsletter service:
New Preferred Stock Alert: APOAP Becomes APO-A (6.75%)
A new traditional preferred has begun trading on the New York stock exchange under the permanent trading symbol APO-A offering a dividend rate of 6.75%.
Apollo Global Management, Inc, 6.75% Series A Mandatory Convertible Preferred Stock
This is NOT the same as the baby bond. While the coupon is not spectacular, the coupon is better than Ni-B. APO-A showing up in Fidelity Active Trader as:
$49.8 (par for this mandatory preferred is probably $50, Day Range:
49.64 – 50. 2. 52 week range 49.64 – 51. 90 day volume: 2.18 million.
For a reminder of the steps that a new preferred stock typically takes to market, please see Preferred Stock Investing chapter 2, ‘Creating A New Preferred Stock’ or the CDx3 Special Report titled ‘Trading Over-The-Counter’ (free to subscribers).
This security was previously trading Over-The-Counter under the temporary trading symbol APOAP.
This security is now trading under its permanent trading symbol. This is the final message that you will receive regarding this security.
Security Description
Trading Symbol
Stock Exchange
Previous Symbol
CUSIP
Security Type
Maturity
Convertibility *
IPO Date
Call Date *
Liquidation Preference (par) * APO-A
NYSE
APOAP
03769M304
Traditional Preferred
Term-matures on 07/31/2026
Mandatory Convertible
08/08/2023
07/31/2026
$50.00
Dividend Calculation
Dividend Rate (coupon) *
Rate Type
Tax Treatment
Annual Dividend (per share)
Dividend Amount (each period)
Dividend Period (frequency) *
First Calendar Month For Dividend Payments 6.750% (Fixed-Rate)
Fixed-Rate
Qualified Dividend income (QDI)
$3.3750
$0.8438
Quarterly
January
Risk Characteristics (see prospectus)
Cumulative/Non-Cumulative *
CDx3 Compliance Score (1 through 10)
Moody’s Rating *
S&P Rating
Fitch Rating Cumulative Dividends
7
NR
BBB+
BBB
Issuing Company (see profile | summary | news | financials | ratings)
Common Symbol
Sector
Industry
US or Foreign * APO
Financial Services
Asset Management
while the coupon is not spectacular. Quality is sound, as compared to Ni-B, the coupon is significantly higher. Than who knows. SR-A. eventually should be good …. depending on how stubborn the Feds are … APO-A could be okay. I should have sold my HTLFP, apparently many followed Tim’s remark to the tee. I had an open order to sell some in my retirement account, to be replaced with APO-A, Vanguard brokerage cited two outside analysts, who claim HTLE is oversold but maintains BUY recommendations. That is however, what they used to say about LUMN, mis managed 3 times in a row. LOL.
There are better bets than the lackluster yield. MS-I as opined by one of the commenters in this website. SCE-K is another alternative. Then MS-I should be higher quality despite Moody’s ridiculous threat for downgrade. SCE came to my house cut power off twice each day from morning to late afternoon either for making new lines for a condo nearby OR to rewire ancient wire in my backyard for safety. As Gridbird knows, Southern CA public utility will concede all the requests from SCE including the now defunct nuclear plant in Orange County, while Nancy Pelosi never concedes to rate hikes and other “mistakes’ in the San Francisco Bay area, where P E and G filed for bankruptcy now emerged.
PS Franchise Group 7.5% called and money received today to buy MS-I.
John, speaking of nasties, a dribble of DPL Capital Trust II came available today. Only 15 bonds. I only plucked 7 to get me to 25 bonds. That is it. Bought at $930 for almost 9.4% YTM for the noncallable 2031 trust debt. Dayton Power and Light got some regulatory clean up this month and Moodys closed the negative book out with stable and a tick drop Ba2 for the senior unsecured. Falls in line with Fitch’s B+ rating for the trust debt. Debt laden little nasty ute, but Ohio regs gives them enough to limp along. DPL wont incur any more debt, but the sub will quite a bit in their upcoming big infrastructure upgrade.
Thanks, Grid, are you referring to AESC?
John, the CUSIP is 23330AAC4. But those 8 bonds left got purchased. There is a standing ask high priced ripoff but those are to be ignored. You just have to periodically check if interested in them. Only about $12 million left from a $300 million issuance from 2001, so they only infrequently are available at a reasonable price.
Actually I am happy with this website, after reading posts from my old Doug Le Du’s Discussion group. This guy who recommended the fake electric company VIA and VIASP (preferred) using GuruFocus and technical analyses now claims that he can ascertain EARNINGS more accurately than Moody/SP/Fitch. Someone echoed. They have all agreed that JXN-A or even LNC-D are trash. Then they said “my great mind think alike.” This ridiculous group think is typical of corporate world. I suggested that they should visit Tim’s website, with voluntary donation but not required. They all ignored me. That is fine. I am happy that Hurricane Hilary has been downgrade to 2 from 4. I pulled out all my trash bins out of garage back to the side of the house. I am also happy that I have finally figured out my health problem. All from one For Profit blood pressure monitor paid by MEDICARE called Dr.Kumo. This monitor CONSISTENTLY give both inaccurate and extremely imprecise readings. Mayo Clinic newsletter for long time subscriber summary hints mentioned about all monitors suffer in precision (the hand worn devices are worse, they say). My internist loves the machine because he gets reimbursed by MEDICARE well over $140 monthly for looking at the numbers and “interpreting” the results. At lest he did tell me after I fainted several times and once totally vertigo driving home on a busy freeway trying NOT to fall asleep. Valsartan is the most effective and perhaps least harmful blood pressure reducing med.
Yet Mayo Clinic does make the statement on the side effects.
https://www.mayoclinic.org/drugs-supplements/valsartan-oral-route/side-effects/drg-20067355
Thanks to the DVD authored by Dr. Anthony Goodman, more than 11 years ago, Great Courses also available at eBay : Lifelong Health: Achieving Optimum Well-Being at Any Age. I was alerted that my doctor may not have the best of my health in mind. My doctor does probably realize the inaccurate readings of Dr.Kumo monitor. He told me after several fainting spells : try to follow the lower of blood pressure meds. Do not take so much. My OMRON Platimum (Amazon.com) consistently beats Dr.KUMO and Dr.KUMO can give me a 160 the top number and measure several minutes later, 126. Dr, Goodman book and DVD alerts readers NOT to assume that your doctor has your best interest in mind. His first priority is limit his time with you. He was criticized heavily on his not so polite statement but admitted that he had to do more study to refute the critics. I now takes 1/4 or at times 1/8 as much valsartan with nearly daily swimming slow with snorkeling set plus light wetsuit jacket listening to my old MP3 waterproof ancient iRiver which I managed to have many songs and themes from American, French and Chinese songs and themes loaded. My current cardiologist did some modern Holter cardiac rythme two weeks plus nuclear study when his young technician and young registered nurse refused to perform threadmill Echocardiograms before and after. My next appointment is March 2024. So, I am happy that this dilemma was resolved. My eyesight has improved with my own presumptive trail of an eye drop which I was allergic to but now much more tolerable. No more fainting spell as long as I make sure I eat sufficient carbohydrate before swimming or suffering from the dangerous hypoglycemia.
I am happy that Hurricane Hilary has been downgraded from 4 to 2
I am grateful for the fine DVD from Great Courses by Dr. Anthony A. Goodman Lifelong Health: Achieving Optimum Well-Being at Any Age. He covered very nicely all
Another good one is Mimi Guarneri, MD, cardiologist with Scripps La Jolla, first director of ntegrative holistic medicine. Best Wishes to you and your girlfriend, Tim and his family and ALL those on this great website and their families. Life is still good. Yes, I do Costco Kirkland Broccoli Florets, 3 lbs, with the old Corning Grab It, add soup or even Kirkland chicken broth makes it an easy 3 minute soup. I am lucky with a short distance drive to Costco for their gasoline and all the other goodies. Their common stocks are nearly as safe as Warren Buffet’s Berkshire and Hathaway B shares IMHO.
Stay dry John , you reminded me I need to head to Harbor freight for some new tarps. they are predicting overnight rain here from trailing edge of your tropical storm. After spending over $600 for Alfalfa bales and all that work stacking them I can’t afford to have them ruined. First time in 30 years of keeping a flock, we had a new baby show up the 16th. never had one show up this time of year before.
Charles, You have a flock of sheep?
My wife says we have big piggies in sheep’s wool. The one still looks fat after dropping the lamb. The baby’s ears stick straight out, looks like it has wings on its head.
Remember that this is a Mandatory Convertible and will trade lock-step with the APO common for the next three years. If you love APO common than this should work for you, but if you think APO common will trade lower in 3 years than this cvt will also trade lower.