Press Release
May 26, 2016

Apollo Commercial Real Estate Finance, Inc. Completes $95.5 Million of New Transactions and Upsizes Credit Facility

Apollo Commercial Real Estate Finance, Inc. Completes $95.5 Million of New Transactions and Upsizes Credit Facility

NEW YORK--(BUSINESS WIRE)--May 26, 2016-- Apollo Commercial Real Estate Finance, Inc. (the “Company” or “ARI”) (NYSE:ARI), today announced the Company closed two commercial real estate loan transactions totaling $95.5 million, bringing year to date transaction volume to $423.5 million of committed capital. In addition, ARI amended the Company’s master repurchase agreement with JPMorgan Chase Bank, N.A., (“JPMorgan Facility”) increasing the borrowing capacity to $800 million from $600 million.

Commenting on the transaction, Scott Weiner, Chief Investment Officer of the Company’s manager, said: “ARI continues to expand the Company’s footprint in the floating-rate first mortgage loan market for transitional properties. Both of these transactions are with well-capitalized sponsors who intend to improve the current use of the underlying properties, one of which is a repeat borrower. In addition, we were pleased to announce the expansion of the JPMorgan Facility, which will provide ARI with additional capacity to fund our investment pipeline and which we believe demonstrates the strength of ARI’s relationship with the Company’s lead lender.”

Investment Activity

ARI closed a $50.0 million first mortgage loan ($44.8 million of which was funded at closing) secured by two office buildings with ground floor retail in midtown Manhattan. The floating rate loan has a two-year initial term with one six-month extension option and an appraised loan-to-value (“LTV”) of approximately 52%. The loan has been underwritten to generate a levered internal rate of return (“IRR”)(1) of approximately 14%.

ARI closed a $45.5 million first mortgage loan ($40.6 million of which was funded at closing) secured by five residential and commercial properties with ground floor retail in the Williamsburg section of Brooklyn, NY. The floating rate loan has a two-year initial term and an appraised LTV of approximately 53%. The loan has been underwritten to generate a levered IRR(1) of approximately 17%.

JPMorgan Facility

During the second quarter, ARI, through wholly owned subsidiaries, entered into an amendment to the JPMorgan Facility to increase the borrowing capacity to $800 million from $600 million. In connection with the JPMorgan Facility, the Company has received approximately $115 million of borrowings for the first mortgage loan secured by an assemblage of properties in the Design District of Miami that does not count toward the $800 million maximum capacity under the JPMorgan Facility. The other terms of the JPMorgan Facility will remain the same.

About Apollo Commercial Real Estate Finance, Inc.

Apollo Commercial Real Estate Finance, Inc. (NYSE:ARI) is a real estate investment trust that primarily originates, invests in, acquires and manages performing commercial real estate first mortgage loans, subordinate financings, commercial mortgage-backed securities and other commercial real estate-related debt investments. The Company is externally managed and advised by ACREFI Management, LLC, a Delaware limited liability company and an indirect subsidiary of Apollo Global Management, LLC, a leading global alternative investment manager with approximately $172.5 billion of assets under management at March 31, 2016.

Additional information can be found on the Company's website at www.apolloreit.com.

(1) The underwritten IRR for the investments shown above reflect the returns underwritten by ACREFI Management, LLC, the Company’s external manager, taking into account leverage and calculated on a weighted average basis assuming no dispositions, early prepayments or defaults but assuming that extension options are exercised and that the cost of borrowings remains constant over the remaining term. With respect to certain loans, the underwritten IRR calculation assumes certain estimates with respect to the timing and magnitude of future fundings for the remaining commitments and associated loan repayments, and assumes no defaults. IRR is the annualized effective compounded return rate that accounts for the time-value of money and represents the rate of return on an investment over a holding period expressed as a percentage of the investment. It is the discount rate that makes the net present value of all cash outflows (the costs of investment) equal to the net present value of cash inflows (returns on investment). It is derived from the negative and positive cash flows resulting from or produced by each transaction (or for a transaction involving more than one investment, cash flows resulting from or produced by each of the investments), whether positive, such as investment returns, or negative, such as transaction expenses or other costs of investment, taking into account the dates on which such cash flows occurred or are expected to occur, and compounding interest accordingly. There can be no assurance that the actual IRRs will equal the underwritten IRRs shown in the table. See “Item 1A—Risk Factors—The Company may not achieve its underwritten internal rate of return on its investments which may lead to future returns that may be significantly lower than anticipated” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 for a discussion of some of the factors that could adversely impact the returns received by the Company from the investments shown over time.

Forward-Looking Statements

Certain statements contained in this press release constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond the Company's control. These forward-looking statements include information about possible or assumed future results of the Company's business, financial condition, liquidity, results of operations, plans and objectives. When used in this release, the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions are intended to identify forward-looking statements. Statements regarding the following subjects, among others, may be forward-looking: the return on equity; the yield on investments; the ability to borrow to finance assets; and risks associated with investing in real estate assets, including changes in business conditions and the general economy. For a further list and description of such risks and uncertainties, see the reports filed by the Company with the Securities and Exchange Commission. The forward-looking statements, and other risks, uncertainties and factors are based on the Company's beliefs, assumptions and expectations of its future performance, taking into account all information currently available to the Company. Forward-looking statements are not predictions of future events. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Source: Apollo Commercial Real Estate Finance, Inc.

Apollo Commercial Real Estate Finance, Inc.
Hilary Ginsberg, 212-822-0767