Apollo Origination II Sees Massive Asset Growth, Debt Surge

TL;DR

**Apollo Origination II just went from zero to hero with over $1.2B in assets and $616M in debt, signaling aggressive, high-leverage growth.**

AI Summary

Apollo Origination II (Levered) Capital Trust reported a net increase in net assets from operations of $15,121 thousand for the three months ended June 30, 2025, and $25,169 thousand for the six months ended June 30, 2025. Total investment income for the three months was $28,471 thousand, primarily from $27,091 thousand in interest income, and $49,459 thousand for the six months. Expenses totaled $14,385 thousand for the quarter and $25,396 thousand for the six-month period, with interest and other debt expenses being the largest component at $10,872 thousand and $19,470 thousand, respectively. The company's total assets significantly increased to $1,218,151 thousand as of June 30, 2025, from $2 thousand at December 31, 2024, driven by $1,161,257 thousand in investments at fair value. Total liabilities also rose substantially to $629,733 thousand from $88 thousand, mainly due to $616,705 thousand in debt. Net assets increased from $(86) thousand to $588,418 thousand, largely due to $563,335 thousand in net proceeds from the issuance of common shares during the six-month period.

Why It Matters

This filing reveals a dramatic expansion for Apollo Origination II, with assets soaring to over $1.2 billion from virtually zero in six months. For investors, this signals aggressive capital deployment and a significant increase in leverage, with debt reaching $616.7 million. The rapid growth in investment income, alongside rising management and performance fees, suggests a potentially lucrative, albeit higher-risk, strategy. Competitively, this expansion positions Apollo Origination II as a more substantial player in the direct lending space, potentially impacting other private credit funds. Employees and customers of the underlying portfolio companies may see increased stability or access to capital, depending on the nature of the debt.

Risk Assessment

Risk Level: high — The company's risk level is high due to its rapid and substantial increase in leverage. Total liabilities surged from $88 thousand to $629,733 thousand, primarily driven by $616,705 thousand in debt, representing a significant portion of its $1,218,151 thousand in total assets. This high debt-to-asset ratio, coupled with a substantial increase in interest and other debt expenses to $19,470 thousand for the six months ended June 30, 2025, exposes the company to considerable interest rate and credit risk.

Analyst Insight

Investors should exercise caution and conduct thorough due diligence on the underlying investments and the terms of the debt. Given the high leverage, consider if the potential returns from the investment portfolio adequately compensate for the increased risk. Monitor future filings for trends in net investment income, debt servicing capacity, and changes in the fair value of investments.

Financial Highlights

debt To Equity

1.05

revenue

$49,459,000

operating Margin

48.66%

total Assets

$1,218,151,000

total Debt

$616,705,000

net Income

$25,169,000

cash Position

$33,041,000

Revenue Breakdown

Key Numbers

• $1.218B — Total Assets (Increased from $2 thousand at Dec 31, 2024, indicating massive growth.)
• $616.7M — Total Debt (A significant increase from $0 at Dec 31, 2024, showing high leverage.)
• $588.4M — Total Net Assets (Increased from $(86) thousand, primarily due to capital share issuance.)
• $25.17M — Net Increase in Net Assets from Operations (For the six months ended June 30, 2025, demonstrating operational profitability.)
• $49.46M — Total Investment Income (For the six months ended June 30, 2025, driven by interest income.)
• $25.40M — Total Expenses (For the six months ended June 30, 2025, with interest expenses being a major component.)
• 22,533,408 — Common Shares Outstanding (As of August 11, 2025, reflecting significant capital raising.)
• $26.11 — Net Asset Value Per Share (As of June 30, 2025, providing a per-share valuation.)
• $19.47M — Interest and other debt expenses (For the six months ended June 30, 2025, highlighting the cost of leverage.)
• $563.34M — Net proceeds from common shares (For the six months ended June 30, 2025, a key driver of asset growth.)

Key Players & Entities

• Apollo Origination II (Levered) Capital Trust (company) — Registrant
• Securities and Exchange Commission (regulator) — Filing oversight
• $1,218,151 thousand (dollar_amount) — Total Assets as of June 30, 2025
• $2 thousand (dollar_amount) — Total Assets as of December 31, 2024
• $616,705 thousand (dollar_amount) — Debt as of June 30, 2025
• $588,418 thousand (dollar_amount) — Total Net Assets as of June 30, 2025
• $25,169 thousand (dollar_amount) — Net Increase in Net Assets Resulting from Operations for six months ended June 30, 2025
• $49,459 thousand (dollar_amount) — Total Investment Income for six months ended June 30, 2025
• $25,396 thousand (dollar_amount) — Total Expenses for six months ended June 30, 2025
• $563,335 thousand (dollar_amount) — Net proceeds from the issuance of common shares for six months ended June 30, 2025

FAQ

Risk Factors

• High Leverage [high — financial]: The Trust has a significant amount of debt, totaling $616,705 thousand as of June 30, 2025, compared to minimal debt at December 31, 2024. This high leverage increases financial risk and sensitivity to interest rate changes.
• Investment Value Fluctuations [medium — market]: Investments are held at fair value, and the Trust experienced a net change in unrealized losses of $255 thousand on non-controlled/non-affiliated investments for the six months ended June 30, 2025. This indicates potential volatility in asset values.
• Interest Expense Burden [high — financial]: Interest and other debt expenses were $19,470 thousand for the six months ended June 30, 2025, representing a substantial portion of total expenses. This highlights the cost of the Trust's leveraged capital structure.
• Rapid Growth and Integration [medium — operational]: The Trust's assets and liabilities have grown exponentially from December 31, 2024, to June 30, 2025. Managing this rapid expansion and integrating new investments and debt could pose operational challenges.
• Compliance with Financial Regulations [low — regulatory]: As a capital trust, the entity is subject to various financial regulations. Failure to comply with these regulations could result in penalties or operational disruptions.

Industry Context

Apollo Origination II (Levered) Capital Trust operates within the credit and structured finance sector, likely focusing on originating and investing in debt instruments. This sector is characterized by its reliance on leverage to enhance returns and its sensitivity to interest rate movements and credit market conditions. The competitive landscape includes other credit funds, BDCs, and specialty finance companies.

Regulatory Implications

As a financial entity, the Trust is subject to regulations governing investment funds and capital markets. Compliance with disclosure requirements, capital adequacy rules, and anti-money laundering regulations is crucial. Any changes in regulatory frameworks, particularly those affecting debt financing or investment structures, could impact the Trust's operations and profitability.

What Investors Should Do

1. Monitor leverage levels and interest coverage ratios.
2. Assess the quality and diversification of the investment portfolio.
3. Evaluate the impact of interest rate changes on net investment income.
4. Analyze the sustainability of capital raising efforts.

Key Dates

• 2025-06-30: Quarter and Six-Month Period End — Reporting period for the consolidated financial statements, showing significant growth in assets, liabilities, and net assets.
• 2025-12-31: Prior Fiscal Year End — Baseline for comparison, showing minimal assets and liabilities prior to the substantial growth in 2025.

Glossary

PIK interest income

Payment-in-kind interest income, where interest is paid in the form of additional debt or equity rather than cash. (A component of the Trust's investment income, indicating a non-cash interest accrual method.)

Net Asset Value Per Share

The total value of a company's assets minus its liabilities, divided by the number of outstanding shares. (Indicates the per-share market value of the Trust's holdings as of June 30, 2025, which was $26.11.)

Levered Capital Trust

A type of trust that uses debt financing to increase its potential returns, but also its risk. (Describes the structure of Apollo Origination II, highlighting its use of debt to finance investments.)

Deferred financing costs

Costs incurred when issuing debt, such as underwriting fees and legal expenses, which are amortized over the life of the debt. (Reduces the reported value of debt on the balance sheet; $5,293 thousand was deducted from debt as of June 30, 2025.)

Year-Over-Year Comparison

The current filing shows a dramatic transformation from December 31, 2024, to June 30, 2025. Total assets surged from $2 thousand to $1.218 billion, primarily driven by investments and funded by $563.34 million in net proceeds from common share issuances. This rapid growth also led to a significant increase in total liabilities, particularly debt, which rose to $616.7 million from virtually zero. Consequently, net assets swung from a negative $(86) thousand to a positive $588.4 million, reflecting the successful capital raise and operational income generation.

Key Financial Figures

• $0.001 — 8 common shares of beneficial interest, $0.001 par value per share, outstanding. Tab

Filing Documents

• none-20250630.htm (10-Q) — 4928KB
• none-ex31_1.htm (EX-31.1) — 18KB
• none-ex31_2.htm (EX-31.2) — 17KB
• none-ex32_1.htm (EX-32.1) — 10KB
• none-ex32_2.htm (EX-32.2) — 10KB
• 0000950170-25-107411.txt ( ) — 15074KB
• none-20250630.xsd (EX-101.SCH) — 1322KB
• none-20250630_htm.xml (XML) — 3091KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements (Unaudited) 1 Consolidated Statements of Assets and Liabilities as of June 30, 2025 (Unaudited) and December 31, 2024 1 Consolidated Statements of Operations for the three and six months ended June 30, 2025 (Unaudited) 2 Consolidated Statements of Changes In Net Assets for the three and six months ended June 30, 2025 (Unaudited) 3 Consolidated Statement of Cash Flows for the six months ended June 30, 2025 (Unaudited) 4 Consolidated Schedule of Investments as of June 30, 2025 (Unaudited) 5

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 19 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 35 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 44 Item 4.

Controls and Procedures

Controls and Procedures 45

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 46 Item 1A.

Risk Factors

Risk Factors 46 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 46 Item 3. Defaults Upon Senior Securities 46 Item 4. Mine Safety Disclosures 46 Item 5. Other Information 46 Item 6. Exhibits 47

Signatures

Signatures 48 Table of Contents

FINA NCIAL INFORMATION

PART I. FINA NCIAL INFORMATION In this report, the terms the "Company," "we," "us" and "our" refer to Apollo Origination II (Levered) Capital Trust unless the context specifically states otherwise.

Consol idated Financial Statements

Item 1. Consol idated Financial Statements APOLLO ORIGINATION II (LEVERED) CAPITAL TRUST CONSOLIDATED STA TEMENTS OF ASSETS AND LIABILITIES (In thousands, except share and per share data) June 30, 2025 December 31, 2024 (Unaudited) Assets Investments at fair value: Non-controlled/non-affiliated investments (cost - $ 1,161,562 and $ 0 at June 30, 2025 and December 31, 2024, respectively) $ 1,161,257 $ — Cash and cash equivalents 33,041 2 Receivable for investments sold 7,217 — Due from counterparties 9,814 — Interest receivable 6,561 — Other assets 261 — Total Assets $ 1,218,151 $ 2 Liabilities Debt (net of deferred financing costs of $ 5,293 and $ 0 , at June 30, 2025 and December 31, 2024, respectively) $ 616,705 $ — Payable for investments purchased 1,604 — Interest payable 8,022 — Management fees payable 1,127 — Performance-based incentive fees payable 1,688 — Administration fees payable 264 8 Professional fees payable — 65 Accrued organizational costs 12 15 Other liabilities and accrued expenses 311 — Total Liabilities $ 629,733 $ 88 Commitments and contingencies ( Note 7 ) Total Net Assets $ 588,418 $ ( 86 ) Net Assets Common stock, $ 0.001 par value ( Unlimited shares authorized; 22,533,408 and 60 shares issued and outstanding, respectively) $ 23 $ 0 * Capital in excess of par value 563,312 1 Accumulated distributed earnings (losses) 25,083 ( 87 ) Total Net Assets $ 588,418 $ ( 86 ) Net Asset Value Per Share $ 26.11 $ N/A * Rounded value See notes to the consolidated financial statements. 1 Table of Contents APOLLO ORIGINATI ON II (LEVERED) CAPITAL TRUST CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2025 2025 Investment Income Non-controlled/non-

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