OREANDA-NEWS. Fitch Ratings expects to assign an unsecured debt rating of 'A-' to the 10- year senior unsecured notes issued by Apollo Management Holdings, L.P., a subsidiary of Apollo Global Management, LLC (Apollo, rated
'A-'/Stable Outlook). Proceeds are expected to be used for general corporate purposes.

Concurrently, Fitch has assigned a Long-Term Issuer Default Rating (IDR) of 'A-' to Apollo Principal Holdings XI, LLC. This entity is a subsidiary of Apollo and is a joint and several guarantor on the firm's bank credit facilities and public notes along with Apollo Principal Holdings I, L.P., Apollo Principal Holdings II, L.P., Apollo Principal Holdings III, L.P., Apollo Principal Holdings IV, L.P., Apollo Principal Holdings V, L.P., Apollo Principal Holdings VI, L.P., Apollo Principal Holdings VII, L.P., Apollo Principal Holdings VIII, L.P., Apollo Principal Holdings IX, L.P., Apollo Principal Holdings X, L.P., and AMH Holdings (Cayman), L.P. The Rating Outlook is Stable.

KEY RATING DRIVERS

IDRs AND SENIOR DEBT

The expected rating on the new unsecured notes reflects joint and several guarantees on indebtedness by the various subsidiaries which collect all of the fee, carry, and investment income earned by Apollo. Therefore the rating of the unsecured notes is expected to be equalized with the IDR of Apollo.

At March 31, 2016, Apollo's leverage (debt/FEBITDA) was 2.60x on a trailing 12 month (TTM) basis, which was below the 'A' category peer average of approximately 3.4x. Leverage will increase to the peer average with this issuance; however, Fitch expects the firm's leverage to decline over the medium-term as incremental fees are earned from growth in fee-earning assets under management (FAUM) and incremental transaction and advisory fees generated from an increase in investment activity in Apollo Investment Fund VIII, L.P., which has announced several large transactions in recent months. Longer-term, Fitch believes Apollo's leverage will be at-or-below the agency's general 'A' category tolerance of 2.5x.

The 'A-' IDR assigned to Apollo Principal Holdings XI, LLC is equalized with IDRs of the co-borrowers on Apollo's corporate revolver and joint and several guarantors on the firm's unsecured public debt, term loan, and revolver. These entities include Apollo Management Holdings, L.P., Apollo Principal Holdings I, L.P., Apollo Principal Holdings II, L.P., Apollo Principal Holdings III, L.P., Apollo Principal Holdings IV, L.P., Apollo Principal Holdings V, L.P., Apollo Principal Holdings VI, L.P., Apollo Principal Holdings VII, L.P., Apollo Principal Holdings VIII, L.P., Apollo Principal Holdings IX, L.P., Apollo Principal Holdings X, L.P., Apollo Management L.P., Apollo Capital Management, L.P., Apollo International Management, L.P., AAA Holdings, L.P., ST Management Holdings, LLC and ST Holdings GP, LLC.

All of the above-referenced co-borrowers and guarantors are rated 'A-' on the basis of Apollo's strong competitive position as a global alternative investment manager; its experienced management team; solid investment track record; large investor base; predictable management fee stream, given significant fee-earning assets under management (FAUM) and limited exposure to assets that earn fees based on net asset value; incentive income-generating capability; relatively low leverage; solid liquidity; and the subordination of general partner interests to outstanding indebtedness.

The Stable Outlook reflects Fitch's expectations that management will continue to generate stable management and advisory fees, grow/retain FAUM through the raising of new and expansion of existing funds, albeit at a much more moderate pace near-term, sustain recent operating margins, reduce leverage back towards historical levels, and retain a solid liquidity profile in order to meet near-term debt maturities and co-investment commitments to funds.

RATING SENSITIVITIES
IDRs AND SENIOR DEBT
Positive rating momentum could develop from a demonstrated ability to operate at the current size, scale and margin level over an extended period of time. An increase in fee diversity, lower leverage, and/or stronger liquidity driven by reduced demands from co-investment commitments, would also be viewed favorably.

Declines in investment performance, a key man event, and/or legislative risk which negatively impact the company's ability to raise FAUM and generate fees, an inability to reduce leverage, and/or impairment of the liquidity profile could result in negative rating action. Furthermore, ratings could be adversely affected if the relationship between Apollo and Athene Holding Ltd. were to materially change as a result of regulatory scrutiny, outsized fines/penalties or loss of management or sub-advisory fees.

Apollo is a global alternative investment manager specializing in private equity, credit and real estate. FAUM amounted to $141.1 billion at March 31, 2016 and total AUM was $172.5 billion. The company's Class A shares are listed on the NYSE under the ticker 'APO'.

Fitch has assigned the following ratings:

Apollo Management Holdings, L.P.
--Unsecured debt 'A-(EXP)'.

Apollo Principal Holdings XI, LLC
--Long-Term IDR 'A-';
--Unsecured debt rating 'A-'.

The Rating Outlook is Stable.

Existing ratings for Apollo are as follows:

Apollo Management Holdings, L.P.
Apollo Management, L.P.
Apollo Capital Management, L.P.
Apollo International Management, L.P.
AAA Holdings L.P.
Apollo Principal Holdings I-X, L.P.
ST Holdings GP, LLC
ST Management Holdings, LLC
--Long-Term IDR 'A-';
--Unsecured debt rating 'A-'.

AMH Holdings (Cayman), L.P.
--Long-Term IDR 'A-'.

The Rating Outlook is Stable.