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TEXT-Fitch expects to rate Apollo Investment notes 'BBB-'

(The following statement was released by the rating agency)

Oct 1 - Fitch Ratings expects to rate Apollo Investment Corporation's (Apollo) unsecured retail notes 'BBB-'. The notes are expected to mature in 2042.

Fitch does not believe there will be a material impact on the company's leverage levels as a result of the issuance, as proceeds will largely be used to repay borrowings on the secured bank revolver. Leverage, as measured by debt-to-equity, was 0.61x at June 30, 2012.

RATING DRIVERS AND SENSITIVITIES

Apollo currently has a Negative Rating Outlook, which reflects recent management changes and the expansion of the investment mandate beyond a focus on subordinated/mezzanine financing. Fitch will assess the impact of these announcements in coming quarters. Still, negative rating action could occur more quickly should there be an inability to deploy investment capital into accretive middle market investments, an extended increase in leverage above the targeted range resulting from increased borrowings or material unrealized depreciation, deterioration in portfolio asset quality, and/or a decline in cash income coverage of the current dividend.

Apollo is an externally managed business development company (BDC) organized on Feb. 2, 2004. As of June 30, 2012, the company had investments in 64 portfolio companies and $2.9 billion in assets. Apollo's investment objective is to generate both current income and capital appreciation through debt and equity investments.

Fitch expects to assign the following rating:

Apollo Investment Corporation:

-- Unsecured Retail Notes at 'BBB-'.

Existing ratings for Apollo are as follows:

--Long-term Issuer Default Rating (IDR) 'BBB';

--Secured Debt 'BBB'; --Unsecured Debt 'BBB-'.

The Rating Outlook is Negative.

Additional information is available at '

'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

-- 'Global Financial Institutions Criteria' (Aug. 15, 2012);

-- 'Investment Manager and Alternative Funds Criteria' (Dec. 23, 2011).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

Investment Manager and Alternative Funds Criteria

(New York Ratings Team)

((e-mail: pam.niimi@thomsonreuters.com; Reuters Messaging: pam.niimi.reuters.com@reuters.net; Tel:1-646-223-6330;))

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