Apollo and Athene complete funding of $500M capital raise for MFA Financial

By Reece Wallace · June 29, 2020

New York private equity firm Apollo Global Management and insurer Athene Holding have provided $500 million in capital to real estate investment trust MFA Financial, marking the latest in a streak of deals by the private equity giant amid the pandemic.

The private equity firm and the life insurer provided a secured term loan through funds and affiliates that was closed on Monday, according to MFA.

The financing agreement, along with $2 billion of non-mark-to-market facilities from lenders like Apollo, Athene, Barclays and Credit Suisse, represents the latest major moves from strategic partners Apollo and Athene. 

Apollo has taken full advantage of the credit crunch hitting debt-laden companies during the coronavirus pandemic. Even after a blockbuster $1.2 billion investment with Silver Lake Partners in online booking business Expedia Group, the firm retains nearly $40 billion in unspent capital as disclosed in its Q1 2020 earnings release.

Athene retained a sound financial footing through Q1 and the COVID-19 outbreak, reporting $2.3 billion of untapped debt capacity and total available liquidity of $6.3 billion as of April 30, 2020, in its quarterly results

The insurer also credited its “strategic transaction with Apollo at the end of February” for “eliminating any impediments for inclusion in a major stock index such as the S&P 500 and MidCap 400, and broadening Athene’s investor appeal.” The transaction, in which Apollo purchased a 17 percent stake in Athene at a premium and almost doubled its ownership to approximately 34 percent, received shareholder and regulatory approvals in early March, Athene said.

“By nearly doubling our ownership in Athene to approximately 34%, we are reinforcing the durability of our relationship, and enhancing the strong alignment between the two companies,” Apollo CEO Leon Black said.

The firms’ coordinated deal with MFA comes close on the heels of last month’s $27 billion fixed annuity block reinsurance transaction with Jackson National Life Insurance Company. That deal included a $500 million equity investment by Athene and effectively expanded Apollo’s insurance asset management business, Apollo said.

MFA, which also closed on the funding of a term borrowing facility with Barclays, Athene and Apollo for $1.6 billion and term financing facilities with Athene, Apollo and Credit Suisse providing $475 million in extra support, has exited its third forbearance agreement, the company said.

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