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S&P might lower Apollo Investment
S&P said it placed its BBB- issuer credit and senior unsecured debt ratings on Apollo Investment Corp. on CreditWatch with negative implications.
The agency said the placement follows the company’s announcement that its board of directors approved the application of the modified asset coverage requirements permit by the Small Business Credit Availability Act.
As a result, the asset coverage ratio applicable to the company will decrease to 150% from 200%, effective April 4, 2019.
The change effectively increases the company's maximum allowable debt-to-equity ratio to about 2 to 1 from 1 to 1.
The company also stated that it intends to use the incremental investment capacity to invest in lower-risk assets, which could partially offset increased credit risk associated with greater leverage, S&P explained.
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