Fitch: Apollo to negative

Fitch Ratings said it revised the outlook for Apollo Investment Corp. to negative from stable.

The outlook revision follows news that Apollo replaced its chief investment officer and chief financial officer, the expansion of the investment mandate beyond a focus on subordinated/mezzanine financing, a dividend cut and a potential equity raise of $200 million in the public markets or via a rights offering, Fitch said.

The agency said the company has historically viewed Apollo's niche focus on larger names in the subordinated/mezzanine space as a differentiator among its peers and as an area of firm expertise.

While Fitch said it recognized that the exposure to larger names would yield more valuation volatility over time, it also has provided more portfolio liquidity as compared to peer business development companies, which has allowed the company to better manage its leverage ratio during times of market stress.

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