NEW YORK - In a significant move within the financial sector, Apollo (NYSE: APO) and its majority-owned warehouse finance and securitized products business, ATLAS SP Partners, together with BNP Paribas (OTC:BNPQY), the leading global bank of the European Union, have unveiled a strategic financing and capital markets collaboration. BNP Paribas has committed an initial $5 billion in financing, a figure expected to grow over time, to support investment-grade, asset-backed credit originated by Apollo and ATLAS.
This collaboration is also set to bolster securitizations sourced by Apollo and ATLAS issuer clients. Jim Zelter, Co-President of Apollo, regards the agreement as "one of the largest-ever bilateral financings for directly-originated credit assets," highlighting ATLAS's origination capabilities and business model. The partnership is anticipated to further integrate Apollo and ATLAS with global financial institutions, building on Apollo's existing collaboration with BNP Paribas, which includes inventory finance solutions through the Eliant platform.
Olivier Osty, Executive Head of Global Markets at BNP Paribas, expressed the bank's commitment to enhancing its relationship with Apollo and ATLAS through this strategic transaction, which aligns with BNP Paribas's objective of expanding its client services and financial solutions globally.
Carey Lathrop, interim CEO of ATLAS SP, emphasized the firm's position as a partner of choice for institutional borrowers seeking warehousing and investment grade asset-backed solutions. The new collaboration is expected to accelerate ATLAS's growth and expand its client capabilities.
The partnership leverages BNP Paribas's expertise in securitization structuring and distribution, as explained by John Gallo, Head of Global Markets Americas & Global Head of Institutional Client Group at the bank. He noted that the collaboration supports ATLAS's role in financing the real economy and complements the growth objectives of both firms.
The legal counsel for Apollo and affiliated entities was provided by Paul, Weiss, Rifkind, Wharton & Garrison LLP, with Redding Ridge Asset Management acting as the structuring agent. BNP Paribas was advised by Cadwalader, Wickersham & Taft LLP.
The announcement follows a 2022 strategic relationship between Apollo, its subsidiary Athene, and BNP Paribas, which saw the launch of Eliant Inventory Solutions LP, aimed at offering flexible financing solutions for working capital and supply chain needs.
This news is based on a press release statement.
In other recent news, Apollo Global Management (NYSE:APO) Inc. has acquired a majority stake in Freedom CNG, a Texas-based operator of compressed natural gas and renewable natural gas fueling stations. This strategic acquisition underscores Apollo's commitment to supporting the energy transition. Apollo's investment in Freedom aligns with its broader strategy of deploying capital in energy transition and sustainability-related investments.
Concurrently, Apollo has been making strategic moves to strengthen its non-U.S. origination platform, including a partial sell-down of its stake in the Australian company, Challenger, and the acquisition of Beequip, a firm located in the Netherlands. Apollo was also involved in a $900 million refinancing deal with Gannett Co., Inc., aimed at extending debt maturities and reducing the dilutive effect of convertible notes.
In terms of analyst ratings, Citi has reaffirmed its Buy rating on Apollo Global Management, with a steadfast price target of $135.00. TD Cowen has also maintained its Buy rating and price target for Apollo. Redburn-Atlantic initiated coverage on Apollo's shares with a Buy rating and set a price target of $153, while BofA Securities upgraded Apollo's stock from Neutral to Buy. These are recent developments for Apollo Global Management.
InvestingPro Insights
Amid the unveiling of Apollo's (NYSE: APO) strategic financing collaboration with BNP Paribas, investors may be curious about the company's financial health and market position. Apollo, a prominent player in the Financial Services industry, is not only known for its innovative financial solutions but also has a history of maintaining dividend payments for 14 consecutive years. This dedication to shareholder returns is underscored by a recent dividend yield of 1.57% as of the last dividend ex-date on August 16, 2024.
Looking at recent performance, Apollo's stock price has demonstrated resilience, with a year-to-date total return of 27.66% and a one-year price total return of 29.93%, indicating robust investor confidence. This is also reflected in the stock trading at 96.18% of its 52-week high, which may appeal to investors looking for companies with strong market momentum.
Financially, Apollo has a market capitalization of $69.27 billion and is trading with a price-to-earnings (P/E) ratio of 13.05. While the company experienced a slight revenue decline of 2.78% in the last twelve months as of Q2 2024, it still reported a substantial gross profit margin of 37.18% during the same period, showcasing its ability to maintain profitability in a challenging environment.
For those interested in deeper analysis, there are additional InvestingPro Tips available on Apollo, including insights into the company's liquidity, profitability, and stock price volatility. In fact, there are 9 more InvestingPro Tips listed on https://www.investing.com/pro/APO, which can provide investors with a comprehensive understanding of Apollo's financial position and market outlook.
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