Item 2.01 Completion of Acquisition or Disposition of Assets
Closing of AMTG Acquisition
On August 31, 2016,
pursuant to the terms and conditions of the Agreement and Plan of Merger, dated February 26, 2016 (as amended, the Merger Agreement) by and among Apollo Commercial Real Estate Finance, Inc. (the Company), Apollo Residential
Mortgage, Inc., a Maryland corporation (AMTG), and Arrow Merger Sub, Inc., a Maryland corporation and wholly owned subsidiary of the Company (Merger Sub), (a) Merger Sub was merged with and into AMTG (the first
merger), with AMTG continuing as the surviving entity and as a subsidiary of the Company, and (b) AMTG merged with and into the Company (the second merger) with the Company continuing as the surviving entity in the second
merger.
At the effective time of the first merger (the First Merger Effective Time), each share of common stock, $0.01 par value, of AMTG (the
AMTG Common Stock) issued and outstanding immediately prior to the First Merger Effective Time was converted into the right to receive (a) US$6.86 in cash, without interest and (b) 0.417571 shares of the Companys common stock,
$0.01 par value (collectively, the Per Common Share Merger Consideration), except for the AMTG Common Stock and other securities representing stock in AMTG owned, directly or indirectly, by AMTG or any if its subsidiaries, the Company,
Merger Sub or by any of their respective subsidiaries immediately prior to the First Merger Effective Time, which were cancelled without consideration.
Immediately prior to the First Merger Effective Time, each outstanding share of restricted stock and each outstanding restricted stock unit that settled in
shares of AMTG Common Stock and was not then vested (the AMTG Restricted Shares) automatically vested and, upon the First Merger Effective Time, was converted into the right to receive, with respect to the share of AMTG Common Stock
underlying such AMTG Restricted Share, the Per Common Share Merger Consideration, net of any applicable withholding taxes.
At the effective time of the
second merger, each outstanding share of AMTGs 8.00% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value, automatically converted into the right to receive one newly issued share of 8.00% Series C Cumulative
Redeemable Perpetual Preferred Stock, $0.01 par value, of the Company.
Closing of Loan Agreement
On August 31, 2016, the Company entered into a Loan Agreement (the Loan Agreement) with Athene USA Corporation, a subsidiary of Athene Holding
Ltd., as lender (Athene USA) and Merger Sub, pursuant to which the Company borrowed $175,000,000 in order to fund a portion of the Companys obligations under the Merger Agreement. The Loan Agreement was repaid in full and
terminated on September 1, 2016, and the Company has no outstanding loan payable to Athene USA.
Closing of Athene Asset Purchase
On August 31, 2016, pursuant to the Asset Purchase and Sale Agreement, dated February 26, 2016 (as amended, the Asset Purchase Agreement) by and
among Athene Annuity & Life Assurance Company and Athene Annuity and Life Company (collectively, Athene Annuity) and the Company, and promptly following the first merger described above, the Company sold primarily non-agency
residential mortgage backed securities previously held by AMTG to Athene Annuity for cash consideration of approximately $1.1 billion. Proceeds from the sale were used to repay approximately $804.0 million in associated financing, $175.0 million to
satisfy the Loan Agreement and for general corporate purposes.
The Company is externally managed by ACREFI Management, LLC, which is an indirect
subsidiary of Apollo Global Management, LLC (Apollo). A subsidiary of Apollo is a significant shareholder of Athene Holding Ltd.
Athene Asset Management, L.P., a subsidiary of Apollo, manages the invested assets of Athene Holding Ltd. and its
subsidiaries. Athene Holding Ltd. is the indirect parent company of Athene Annuity.