SOURCE: Apollo Commercial Real Estate Finance, Inc.

Apollo Commercial Real Estate Finance, Inc.

October 15, 2013 09:00 ET

Apollo Commercial Real Estate Finance, Inc. Completes $47 Million Mezzanine Transaction

NEW YORK, NY--(Marketwired - Oct 15, 2013) - Apollo Commercial Real Estate Finance, Inc. (the "Company" or "ARI") (NYSE: ARI) today announced the purchase of $47 million of mezzanine participations secured by a pledge of the equity interests in a borrower that owns a healthcare portfolio consisting of 193 skilled nursing facilities, long-term acute care hospitals and senior housing facilities. The transaction represents ARI's first investment in the healthcare sector.

The mezzanine participations, which ARI purchased at par, have a remaining nine-month term and are part of a $92 million floating-rate senior mezzanine loan. ARI's loan basis, inclusive of cash held for collateral, represents an underwritten loan-to-value ratio of 58%. The mezzanine participations were underwritten to generate an internal rate of return ("IRR") of approximately 12%(1)(2).

Following the closing of this transaction, ARI's 2013 loan investment activity year-to-date totaled $324.9 million with an underwritten weighted average IRR of approximately 13%(2).

(1) The IRR for the mezzanine participations assumes the entire loan on the portfolio is repaid in six months, based on the par purchase price.

(2) The underwritten IRRs for the investments referred to in this press release reflect the returns underwritten by ACREFI Management, LLC, the Company's external manager. IRR is the annualized effective compounded return rate that accounts for the time-value of money and represents the rate of return on an investment over a holding period expressed as a percentage of the investment. It is the discount rate that makes the net present value of all cash outflows (the costs of investment) equal to the net present value of cash inflows (returns on investment). It is derived from the negative and positive cash flows resulting from or produced by each transaction (or for a transaction involving more than one investment, cash flows resulting from or produced by each of the investments), whether positive, such as investment returns, or negative, such as transaction expenses or other costs of investment, taking into account the dates on which such cash flows occurred or are expected to occur, and compounding interest accordingly. For a description of the details regarding the underwritten IRR calculations for investments made by ARI in 2013, including certain of the assumptions made by ACREFI Management, LLC in connection therewith, see "Management's Discussion and Analysis of Financial Condition and Results of Operations � Investments" in the Company's Form 10-Q for the quarter ended June 30, 2013. There can be no assurance the actual IRRs will equal the underwritten IRRs shown in this press release or the Form 10-Q referred to above. See "Risk Factors" in the Company's Form 10-K for the year ended December 31, 2012 for a discussion of some of the factors that could adversely impact the returns received by the Company from its investments shown over time. 

About Apollo Commercial Real Estate Finance, Inc.
Apollo Commercial Real Estate Finance, Inc. (NYSE: ARI) is a real estate investment trust that primarily originates, invests in, acquires and manages performing commercial real estate mortgage loans, subordinate financings, CMBS and other commercial real estate-related debt investments throughout the U.S. The Company is externally managed and advised by ACREFI Management, LLC, a Delaware limited liability company and an indirect subsidiary of Apollo Global Management, LLC, a leading global alternative investment manager with approximately $113 billion of assets under management at June 30, 2013. 

Additional information can be found on the Company's website at www.apolloreit.com.

Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company's control. These forward-looking statements include information about possible or assumed future results of the Company's business, financial condition, liquidity, results of operations, plans and objectives. When used in this release, the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions, are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: the anticipated timing of the repayment of investments; the return on equity; the yield on investments; the ability to borrow to finance assets; the Company's ability to deploy the proceeds of its capital raises or acquire its target assets; and risks associated with investing in real estate assets, including changes in business conditions and the general economy. For a further list and description of such risks and uncertainties, see the reports filed by the Company with the Securities and Exchange Commission. The forward-looking statements, and other risks, uncertainties and factors are based on the Company's beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company. Forward-looking statements are not predictions of future events. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contact Information

  • CONTACT:
    Hilary Ginsberg
    Investor Relations
    (212) 822-0767