Apollo Global Management LLC

The negative outlook on Apollo incorporates our expectation that the company's debt to adjusted EBITDA could approach or exceed 1.5x. If the company operates with leverage above 1.5x on a sustained basis, we would lower the ratings. We could revise the outlook to stable if Apollo maintains debt to adjusted EBITDA less than 1.5x and closer to pre-issuance levels (approximately 1.0-1.2x) on a sustained basis and interest coverage above 10x. Our current base-case forecast incorporates our expectation for U.S. GDP to increase by 2.2% in 2019 and 1.7% in 2020. S&P Global economists expect unemployment to remain below 4% and the Federal Reserve not to increase rates in 2019. We believe asset managers' credit metrics will hold up given their

...Apollo's credit platform is unique. Compared with other asset managers, Apollo has a larger proportion of assets in permanent capital vehicles, including Athene and Athora, that comprise a meaningful portion of Apollo's fee-generating assets under management (FGAUM). Apollo has a good historical track record. The company has generated strong investment performance from opportunistic investments, and, we believe the company is well-positioned to grow credit investments amid future market dislocations. Apollo has generated robust assets under management (AUM) growth over the latest 12 months. The majority of its capital inflows was in credit, particularly Athene, resulting from the Voya Financial Inc. ($18 billion) and Lincoln Financial Group ($7.7 billion) reinsurance transactions. We expect this platform to continue to be a key area for growth for the company in 2019 and 2020. Apollo's leverage has little cushion at the current rating. We expect that the company could draw on its contingent...

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