Apollo Origination II Assets Skyrocket to $590M on New Investments

TL;DR

**Apollo Origination II is a cash-burning machine, but it's deploying capital aggressively into secured debt, so buy the dip if you believe in their credit strategy.**

AI Summary

Apollo Origination II (UL) Capital Trust reported a significant increase in total assets to $590,707 thousand as of September 30, 2025, up from just $2 thousand at December 31, 2024, primarily driven by new investments at fair value totaling $544,304 thousand. The company generated $34,442 thousand in total investment income for the nine months ended September 30, 2025, with interest income (excluding PIK) accounting for $32,638 thousand. Net investment income reached $29,868 thousand for the nine-month period. Net realized and unrealized gains contributed an additional $2,806 thousand, leading to a net increase in net assets from operations of $32,674 thousand. Capital share transactions provided $555,755 thousand in net proceeds from the issuance of common shares, resulting in total net assets of $588,338 thousand by September 30, 2025, a substantial increase from a negative $91 thousand at the end of 2024. The company's investment portfolio is heavily concentrated in First Lien Secured Debt across various industries, with significant holdings in Commercial Services & Supplies ($45,184 thousand fair value) and Health Care Providers & Services ($58,250 thousand fair value).

Why It Matters

This filing reveals Apollo Origination II's rapid scaling, transforming from a nascent entity to a significant player with over half a billion dollars in assets in less than a year. For investors, this indicates aggressive capital deployment and a focus on generating income through secured debt, potentially offering stable returns in a volatile market. Employees and customers of the underlying portfolio companies benefit from the capital infusion, supporting growth and operational stability. In the broader market, this expansion highlights Apollo's continued dominance in private credit, intensifying competition for deal flow and potentially influencing lending terms for middle-market companies.

Risk Assessment

Risk Level: medium — The company's rapid growth from $2 thousand to $590,707 thousand in total assets within nine months, primarily through new investments, indicates significant deployment risk. While the portfolio is concentrated in First Lien Secured Debt, which offers some protection, the sheer volume of new investments in a short period could expose the trust to unforeseen credit quality issues or market shifts, as evidenced by the $584,188 thousand in investment purchases for the nine months ended September 30, 2025.

Analyst Insight

Investors should closely monitor the credit quality and performance of Apollo Origination II's underlying First Lien Secured Debt portfolio. Given the rapid asset accumulation, a deeper dive into the specific terms and covenants of these loans, and the financial health of the borrowers, is warranted to assess the sustainability of its investment income and net asset value.

Financial Highlights

revenue

$34,442,000

total Assets

$590,707,000

total Debt

$2,369,000

net Income

$32,674,000

eps

$26.64

cash Position

$39,388,000

Revenue Breakdown

Key Numbers

• $590.7M — Total Assets (Increased from $2K at Dec 31, 2024, indicating massive growth.)
• $544.3M — Investments at Fair Value (Represents the bulk of the asset growth, primarily in secured debt.)
• $34.4M — Total Investment Income (Generated over nine months, showing strong revenue generation from new assets.)
• $29.9M — Net Investment Income (Profitability from investments after expenses for the nine-month period.)
• $555.8M — Net Proceeds from Share Issuance (Key driver of capital for new investments and asset growth.)
• $588.3M — Total Net Assets (Significant increase from a negative value, reflecting successful capital raising and investment.)
• 22,083,958 — Common Shares Outstanding (Reflects the substantial increase in shares issued to fund growth.)
• $26.64 — Net Asset Value Per Share (Indicates the per-share value of the trust's assets.)
• $584.2M — Purchase of Investments (Cash outflow for new investments, demonstrating aggressive deployment.)
• $45.2M — Commercial Services & Supplies Investments (Largest industry exposure in the investment portfolio.)

Key Players & Entities

• Apollo Origination II (UL) Capital Trust (company) — Registrant
• Securities and Exchange Commission (regulator) — Filing oversight
• $590,707 thousand (dollar_amount) — Total Assets as of September 30, 2025
• $2 thousand (dollar_amount) — Total Assets as of December 31, 2024
• $544,304 thousand (dollar_amount) — Investments at fair value as of September 30, 2025
• $34,442 thousand (dollar_amount) — Total Investment Income for nine months ended September 30, 2025
• $29,868 thousand (dollar_amount) — Net Investment Income for nine months ended September 30, 2025
• $555,755 thousand (dollar_amount) — Net proceeds from issuance of common shares for nine months ended September 30, 2025
• $588,338 thousand (dollar_amount) — Total Net Assets as of September 30, 2025
• First Lien Secured Debt (other) — Primary investment type

FAQ

Risk Factors

• Concentration Risk in Investments [high — financial]: The company's investment portfolio is heavily concentrated in First Lien Secured Debt, with significant exposure to Commercial Services & Supplies ($45.2M) and Health Care Providers & Services ($58.3M). This concentration increases the risk of significant losses if these specific industries or types of debt experience downturns.
• Interest Rate Sensitivity [medium — market]: As a debt-focused investment vehicle, the fair value of the company's investments is sensitive to changes in interest rates. Rising interest rates could negatively impact the fair value of existing debt investments, while falling rates could reduce future income generation.
• Reliance on Investment Manager [medium — operational]: The company's success is heavily dependent on the expertise and performance of its investment manager, Apollo. Any adverse changes in the manager's strategy, personnel, or reputation could negatively impact the trust's operations and investment returns.
• Valuation of Investments [medium — financial]: A significant portion of assets are investments at fair value ($544.3M). The fair value of these investments, particularly those that are not actively traded, may be subject to estimation and uncertainty, leading to potential volatility in reported net asset value.
• Regulatory Compliance [low — regulatory]: As a capital trust, the company is subject to various financial regulations. Non-compliance or changes in regulatory requirements could lead to penalties, increased operational costs, or restrictions on business activities.

Industry Context

Apollo Origination II (UL) Capital Trust operates within the credit investment sector, focusing on originating and investing in debt instruments, particularly secured debt. The market for such investments is influenced by interest rate environments, credit availability, and the overall economic health of various industries. The trust's strategy appears to leverage Apollo's expertise in sourcing and managing these assets, aiming to generate stable income and capital appreciation.

Regulatory Implications

As a capital trust, the entity is subject to financial regulations that govern investment vehicles. Compliance with these regulations is crucial to maintain operational integrity and investor confidence. Changes in accounting standards or regulatory frameworks could impact reporting requirements and operational costs.

What Investors Should Do

1. Monitor industry concentration
2. Evaluate investment manager performance
3. Assess interest rate sensitivity
4. Review capital deployment strategy

Key Dates

• 2025-09-30: Reporting Period End — Marks the end of the nine-month period for which financial results are reported, showing substantial asset and net asset growth.
• 2025-09-30: Investments at Fair Value — $544.3M in investments, primarily First Lien Secured Debt, indicating aggressive deployment of capital.
• 2025-09-30: Total Net Assets — $588.3M, a significant increase from a negative $91K at year-end 2024, driven by share issuances and investment income.
• 2024-12-31: Prior Period End — Baseline for comparison, showing minimal assets ($2K) and negative net assets (-$91K).

Glossary

Payment-in-kind (PIK) interest income

Interest income that is not paid in cash but is instead added to the principal balance of a loan, increasing the amount owed. (This is a component of the trust's investment income, indicating a portion of interest is reinvested rather than distributed.)

Net Investment Income

The income generated from a company's investments after deducting all operating expenses. (Represents the core profitability of the trust's investment activities before considering capital gains or losses.)

Net Realized and Change in Unrealized Gains (Losses)

The sum of profits or losses from selling investments (realized) and the changes in the market value of investments still held (unrealized). (Reflects the impact of market fluctuations and investment performance on the trust's overall net assets.)

Net Asset Value Per Share

The value of each share of the trust's net assets, calculated by dividing total net assets by the number of outstanding shares. (A key metric for investors to understand the per-share value of their investment in the trust.)

First Lien Secured Debt

Debt that is secured by a company's assets and has the highest priority in repayment in case of bankruptcy or liquidation. (This is the primary type of investment held by the trust, indicating a focus on lower-risk, senior debt instruments.)

Year-Over-Year Comparison

The current filing shows a dramatic transformation from the prior period. Total assets have surged from $2,000 to $590.7 million, and net assets have swung from a negative $91,000 to a positive $588.3 million. This growth is primarily attributed to substantial capital raised through share issuances ($555.8 million) and the subsequent investment of these funds into a large portfolio of debt instruments. While the prior period had minimal operational activity, the current period demonstrates significant investment income generation, indicating a successful launch and scaling of the trust's investment strategy.

Key Financial Figures

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

Filing Documents

• ck0002052153-20250930.htm (10-Q) — 5128KB
• ck0002052153-ex31_1.htm (EX-31.1) — 18KB
• ck0002052153-ex31_2.htm (EX-31.2) — 18KB
• ck0002052153-ex32_1.htm (EX-32.1) — 10KB
• ck0002052153-ex32_2.htm (EX-32.2) — 10KB
• 0001193125-25-278012.txt ( ) — 15362KB
• ck0002052153-20250930.xsd (EX-101.SCH) — 1086KB
• ck0002052153-20250930_htm.xml (XML) — 3166KB

FINANCIAL INFORMATION

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

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 20 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 33 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 41 Item 4.

Controls and Procedures

Controls and Procedures 42

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 43 Item 1A.

Risk Factors

Risk Factors 43 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 43 Item 3. Defaults Upon Senior Securities 43 Item 4. Mine Safety Disclosures 43 Item 5. Other Information 43 Item 6. Exhibits 44

Signatures

Signatures 45 Table of Contents 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 (UL) Capital Trust unless the context specifically states otherwise.

Consol idated Financial Statements

Item 1. Consol idated Financial Statements APOLLO ORIGINATION II (UL) CAPITAL TRUST CONSOLIDATED STA TEMENTS OF ASSETS AND LIABILITIES (In thousands, except share and per share data) September 30, 2025 December 31, 2024 (Unaudited) Assets Investments at fair value: Non-controlled/non-affiliated investments (cost - $ 542,025 and $ 0 at September 30, 2025 and December 31, 2024, respectively) $ 544,304 $ - Cash and cash equivalents 39,388 2 Receivable for investments sold 3,267 - Due from counterparties 483 - Interest receivable 3,232 - Other assets 33 - Total Assets $ 590,707 $ 2 Liabilities Payable for investments purchased $ 753 $ - Management fees payable 1,009 - Administration fees payable 314 8 Professional fees payable - 65 Accrued organizational costs 13 20 Other liabilities and accrued expenses 280 - Total Liabilities $ 2,369 $ 93 Commitments and contingencies ( Note 6 ) Total Net Assets $ 588,338 $ ( 91 ) Net Assets Common stock, $ 0.001 par value (Unlimited shares authorized; 22,083,958 and 60 shares issued and outstanding, respectively) $ 22 $ 0 * Capital in excess of par value 555,734 2 Accumulated distributed earnings (losses) 32,582 ( 93 ) Total Net Assets $ 588,338 $ ( 91 ) Net Asset Value Per Share $ 26.64 $ N/A * Rounded value See notes to the consolidated financial statements. 1 Table of Contents Table of Contents APOLLO ORIGINATI ON II (UL) CAPITAL TRUST CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) Three Months Ended September 30, Nine Months Ended September 30, 2025 2025 Investment Income Non-controlled/non-affiliated investments: Interest income (excluding Payment-in-kind ("PIK") interest income) $ 12,074 $ 32,638 PIK interest income 393 741 Dividend income 122 560 Other income

View Full Filing

View this 10-Q filing on SEC EDGAR