Private investment firm Apollo Global Management is planning to sell as much as $1.15bn of convertible stock to help its Athene annuities unit to “capitalise on attractive opportunities” generated by market turbulence, according to a report by Bloomberg.
The US alternative investment firm said on Monday that proceeds from the stock sale would be used to help the company “play offense” with recent interest rate rises having caused a slump in deal volumes and some regional banks to sell assets at a loss.
Following the announcement, the company’s shares dropped 3.2% to $83.55 at 4:53pm in late New York trading, having earlier hit an all-time high following the announcement of record profits. Athene contributed almost 80% of adjusted Q2 net income in the second quarter, a mark of how much Apollo has tilted towards credit and insurance.
The mandatory convertible preferred stock, which will convert into common shares in about three years, unless earlier converted, will be junior to other additional debt in terms of dividend rights, as well as distribution rights in the event of liquidation, winding-up and dissolution, Apollo said in a regulatory filing.
